A market for pollution rights can be expected to:
A) Eliminate all pollution
B) Produce a shortage of pollution
C) Encourage potential polluters to increase emissions
D) Provide potential polluters with a monetary incentive to reduce emissions

Question

Quizplus · Accepted Answer

A market for pollution rights creates a monetary incentive for potential polluters to reduce their emissions. This is because the polluters can sell their unused or reduced pollution rights to other polluters who are unable to reduce their emissions. As a result, the overall emissions in the market are reduced. It doesn't eliminate all pollution as it allows polluters to emit a certain amount of pollutants, and it doesn't encourage potential polluters to increase emissions as there is a limited number of pollution rights available.

A Market for Pollution Rights Can Be Expected To