An emission charge

Question

An emission charge

Quizplus · Accepted Answer

An emission charge takes advantage of firms' natural profit incentive by making it costly to continue emitting pollutants. This creates an economic incentive for firms to find ways to reduce their emissions in the least-cost way possible, such as through investments in cleaner technologies or reducing their use of polluting inputs. The charge itself can also generate revenue for governments that can be used to support environmental programs, making it a potential win-win for both businesses and governments.

An Emission Charge