Tradeable Pollution Permits Flashcards
1
Q
What is a limit cap set on
A
Total amount of pollution firms are allowed to emit over a period
2
Q
Why do the government allocate pollution permit to firms
A
Allows firms to pollute up to a certain limit
These can be tracked
3
Q
What happens if firms pollute below the limit
A
The permits aren’t used and can be sold - incentive
4
Q
What happens if firms break the pollution limit
A
They will face fines unless they purchase new permits
