A tradable emissions permit program is efficient because the cap protects the environment while:
A)generating substantial revenues for the government.
B)keeping compliance and administration costs relatively low.
C)while requiring the same response by each polluter.
D)none of above

Question

A tradable emissions permit program is efficient because the cap protects the environment while:
A)​generating substantial revenues for the government.
B)​keeping compliance and administration costs relatively low.
C)​while requiring the same response by each polluter.
D)​none of above

Quizplus · Accepted Answer

Tradable emissions permit program creates an incentive for firms to reduce their emissions by allowing them to trade unused permits to other firms. This flexibility results in lower compliance and administration costs as firms can choose the least costly method for reducing emissions. Additionally, the cap ensures that overall emissions do not exceed a predetermined level, thereby protecting the environment. While generating revenue for the government is often a desired outcome, it is not the primary reason for the efficiency of this program. The response required by each polluter varies depending on their individual circumstances, making option C incorrect.

A Tradable Emissions Permit Program Is Efficient Because the Cap