GI- Pollution Permits Flashcards
1
Q
What are pollution permits
A
A market based scheme aimed at reducing pollution and trying to encourage firms to reduce the quantity of pollution they create
2
Q
What do pollution permits create
A
A financial incentive to pollute less because you can sell your excess permits to other firms
3
Q
Why is it difficult to implement pollution permits
A
It is difficult to know how many permits to give out.
Too many = little change
Too little = can adversely affect output (harm economic prosperity)
- also difficult to measure the amount of pollution created (may be an incentive to cheat)
