With transferrable emissions permits, firms must have permits to generate emissions. If a firm emits less pollution than its permits allow, it can sell its leftover permits to another firm that wishes to emit more pollutions than its permits allow. Comment on the following: “These permits have the advantages of both standards and fees, therefore, they may be the best technique of controlling pollution.” (Hint: How do transferrable emissions permits reflect on each firm’s individual abatement costs?)
With transferrable emissions permits, firms must have permits to generate emissions. If a firm emits less pollution than its permits allow, it can sell its leftover permits to another firm that wishes to emit more pollutions than its permits allow. Comment on the following: “These permits have the advantages of both standards and fees, therefore, they may be the best technique of controlling pollution.” (Hint: How do transferrable emissions permits reflect on each firm’s individual abatement costs?)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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With transferrable emissions permits, firms must have permits to generate emissions. If a firm emits less pollution than its permits allow, it can sell its leftover permits to another firm that wishes to emit more pollutions than its permits allow.
Comment on the following: “These permits have the advantages of both standards and fees, therefore, they may be the best technique of controlling pollution.” (Hint: How do transferrable emissions permits reflect on each firm’s individual abatement costs?)
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