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2 industries emit greenhouse gases (GHG): Energy (E) and Transportation (R). The marginal abatement cost for industry E is given by MACÈ(XË) = 6XÊ, where XE is E's abatement of GHG's. The marginal abatement cost for industry R is given by MACR(XR) = 4XR, where XR is R's abatement of GHG's. The public decides that in order to stabilize the climate, total abatement of XR + XE = 20 is needed. c) Suppose E's initial (unregulated) GHG emissions are equal to 30 units, and R's initial emissions are equal to 20 units. With an abatement target of 20 total units of GHG abatement, what should the "cap" be in a cap-and-trade program? 30 units 50 units Can't be determined 20 units

2 industries emit greenhouse gases (GHG): Energy (E) and Transportation (R). The marginal abatement cost for industry E is given by MACÈ(XË) = 6XÊ, where XE is E's abatement of GHG's. The marginal abatement cost for industry R is given by MACR(XR) = 4XR, where XR is R's abatement of GHG's. The public decides that in order to stabilize the climate, total abatement of XR + XE = 20 is needed. c) Suppose E's initial (unregulated) GHG emissions are equal to 30 units, and R's initial emissions are equal to 20 units. With an abatement target of 20 total units of GHG abatement, what should the "cap" be in a cap-and-trade program? 30 units 50 units Can't be determined 20 units

Applications and Investigations in Earth Science (9th Edition)
Applications and Investigations in Earth Science (9th Edition)
9th Edition
ISBN:9780134746241
Author:Edward J. Tarbuck, Frederick K. Lutgens, Dennis G. Tasa
Publisher:Edward J. Tarbuck, Frederick K. Lutgens, Dennis G. Tasa
Chapter1: The Study Of Minerals
Section: Chapter Questions
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2 industries emit greenhouse gases (GHG): Energy (E) and Transportation (R). The marginal abatement cost for industry E is given by MACE(XË) = 6XË, where XE is E's abatement of GHG's. The marginal abatement cost for industry R is given by MACR(XR) = 4XR, where XR is R's abatement of GHG's. The public decides that in order to stabilize the climate, total abatement of XR + XE = 20 is needed. c) Suppose E's initial (unregulated) GHG emissions are equal to 30 units, and R's initial emissions are equal to 20 units. With an abatement target of 20 total units of GHG abatement, what should the "cap" be in a cap-and-trade program? 30 units 50 units Can't be determined 20 units d) If such a cap-and-trade program is implemented, and assuming that the permit market functions well, what is going to be the equilibrium permit price? $24/permit $64/permit $48/permit $32/permit
Transcribed Image Text:2 industries emit greenhouse gases (GHG): Energy (E) and Transportation (R). The marginal abatement cost for industry E is given by MACE(XË) = 6XË, where XE is E's abatement of GHG's. The marginal abatement cost for industry R is given by MACR(XR) = 4XR, where XR is R's abatement of GHG's. The public decides that in order to stabilize the climate, total abatement of XR + XE = 20 is needed. c) Suppose E's initial (unregulated) GHG emissions are equal to 30 units, and R's initial emissions are equal to 20 units. With an abatement target of 20 total units of GHG abatement, what should the "cap" be in a cap-and-trade program? 30 units 50 units Can't be determined 20 units d) If such a cap-and-trade program is implemented, and assuming that the permit market functions well, what is going to be the equilibrium permit price? $24/permit $64/permit $48/permit $32/permit
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