Th1.4: Disadvantages of Tradable Pollution Permits

Question 1

What are the three disadvantages of tradable pollution permits?

Answer 1

expensive to monitor and police
raise costs
how many permits?

Question 2

Expensive to monitor and police

Answer 2

it will only work well if monitored well. the government needs to impose fines that are large enough to ensure firms follow the regulation

Question 3

Raise costs

Answer 3

it will raise costs for businesses, and it is likely that these higher costs will be passed on to consumers

Question 4

How many permits

Answer 4

difficult to know how many permits to allow