Marketable pollution rights _____.
A)make producers pay for polluting
B)are inherently wrong
C)give producers incentive to internalize external costs
D)do nothing to reduce pollution in the long run

Question

Quizplus · Accepted Answer

Marketable pollution rights give producers an economic incentive to internalize the external costs of pollution by making them pay for their pollution. This can lead to a reduction in pollution, as producers will try to minimize their costs by reducing their emissions. Therefore, option C is the best choice. Option A is partially correct, but it does not consider the mechanism through which producers are made to pay for polluting. Option B is not correct, as it is a value judgment that is not universally accepted. Option D is incorrect, as marketable pollution rights can lead to a reduction in pollution in the long run.

Marketable Pollution Rights _____