Question

8. Several generators pollute the environment by emitting carbon dioxide. Generators have different costs of reducing carbon emissions. The government wants to put a cap on total emissions. Putting a cap on each generator is more efficient compared to issuing tradeable emissions permits to each generator. Is this true or false? Explain your answer. (5m)

Answer 1

"Several generators pollute the environment by emitting carbon dioxide. Generators have different costs of reducing carbon emissions. The government wants to put a cap on total emissions. Putting a cap on each generator is more efficient compared to issuing tradeable emissions permits to each generator"

The above statement is true because if the government wants quickly solution for the pollution problem, putting a cap on each generator is more efficient.Issuing tradeable emmions permits to each generator would get more time and cost.