Question

What are pollution hotspots? Why/how might these arise under a cap-and-trade scheme? How can a cap-and-trade scheme by modified to address the problem?

Answer 1

pollution or toxic hotspots are places where emission from specific sources of air or water pollution exposes the local population to elevated health risk. The cap and trade scheme is an approach to reduce pollution from the environment by curbing emissions. The cap implies a limiting on the greenhouse gas emissions which is defined by science and companies pay fine if they exceed this capped emission. The trade implies the market where buying and selling of licenses take place. It gives incentive to companies for reducing emissions. The cap is set by the government and also the punishment in case of violation