The Clean Air Act of 1990:
A) established a tradable allowances program for sulfur dioxide.
B) is an application of the Coase theorem.
C) allows firms to profit by selling their unused pollution allowances.
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

All of the options are correct. The Clean Air Act of 1990 created a tradable allowances program for sulfur dioxide, which allowed firms to profit by selling unused pollution allowances. It is an application of the Coase theorem, which states that private bargaining can lead to efficient outcomes in the presence of externalities.