Which statement is CORRECT?
A)An emissions tax is a more efficient way to reduce pollution than is an environmental standard because an emissions tax equalizes the marginal benefit of pollution from all sources.
B)An environmental standard is a more efficient way to reduce pollution than is an emissions tax because an environmental standard can be structured to equalize the reduction in pollution from all sources.
C)If an emissions tax and environmental standards lead to the same total reduction in pollution,then they will also lead to the same reduction in pollution by individual polluters.
D)It is easy to set emissions taxes at the "correct" level since the relationship between emissions taxes and the reduction in emissions that they induce has been extensively studied and is well known.

Question

Quizplus · Accepted Answer

An emissions tax equalizes the marginal benefit of pollution from all sources, which means it creates a level playing field for all polluters and encourages them to reduce emissions in the most efficient way possible. On the other hand, an environmental standard may not be as efficient because it does not take into account the different marginal benefits of pollution from different sources.

Which Statement Is CORRECT