Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC1 = 10 - 2E1 MAC2 = 4 - E2 If both firms cut their emissions to zero, then total abatement costs (TAC) for both firms is ____.

Which of the following are practical and effective policies to deal with carbon emissions caused by driving a car? A) A quota on individuals to limit their driving B) A tax on petrol C) Ownership of all affected assets D) Coasian bargaining (one side paying the other side to drive or not to drive)

Update the graph below to illustrate the efficient level of emissions if new research demonstrates that emissions are more harmful than previously estimated. Clearly show which curve(s) change and denote the new efficient level of emissions as E4.

Within the remote nation of New Hope, total industrial production is currently creating a constant level of GDP that results in 2,600 million tonnes per year of carbon being released into the atmosphere. The government announced three years ago that a cap on carbon emissions of 2,430 million tonnes would be imposed. This triggered the creation of new firms that began to plant large plantations of trees grown specifically to absorb carbon from the atmosphere and thus earn carbon credits that they would sell to the highest bidder. See table below for the supply of these earned carbon credits available when the program begins. Quantity of Credits Price of Carbon Credits Created $ 1,125 40 1,225 70 1,325 100 1,425 140 1,525 170 1,625 200 1,725 230 a. What will be the initial price for carbon credits? Initial price $ Next, assume that new technology enables the same level of GDP to be achieved with 5 percent less carbon emissions. b. Now what is the price of carbon credits? Price $