By using _____ to reduce emissions,the government can ensure that the marginal benefit of an additional unit of pollution is the same for all polluters.
A)an environmental standard
B)a subsidy
C)a ban on pollution
D)either an emissions tax or a tradable emissions permit

Question

Quizplus · Accepted Answer

An emissions tax or a tradable emissions permit would create a market-based solution to reduce emissions. With an emissions tax, the government can set a specific price per unit of pollution, and companies would have to pay that amount for every unit of pollution they emit. This would create an incentive for companies to reduce their pollution to avoid paying the tax.

With tradable emissions permits, the government would set a total amount of pollution that is allowed, and then divide that amount into permits. Each permit represents a certain amount of pollution that a company can emit. Companies that can easily reduce their emissions can do so and then sell their unused permits to companies that have a harder time reducing their emissions. This creates a market for emissions permits where the price of the permit represents the cost of reducing emissions.

Both emissions taxes and tradable emissions permits ensure that the marginal benefit of reducing pollution is equal for all companies, and they achieve the goal of reducing emissions at the lowest possible cost.

By Using _____ to Reduce Emissions,the Government Can Ensure That