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a. Using cap-and-trade, the government could restrict pollution by placing a on the amount of emissions each company may emit through the issue of permits. Kyoto protocol tariff b. One feature of the cap-and-trade policy is that permits can be traded betwe quota panies that have already invested in emission lowering technologies and those that have not.

a. Using cap-and-trade, the government could restrict pollution by placing a on the amount of emissions each company may emit through the issue of permits. Kyoto protocol tariff b. One feature of the cap-and-trade policy is that permits can be traded betwe quota panies that have already invested in emission lowering technologies and those that have not.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I need help with A and B. 

Externalities and Public Goods – End of Chapter Problem In order to curb CO2 emissions, the government creates a cap-and-trade system for freight companies that use semi-trailer trucks to move freight. Some freight companies have already spent lots of money investing in low-emission trucks or even developing battery technologies to decrease emissions. Other companies have invested nothing to decrease their emissions. Answer the following questions to explain how the cap-and-trade program, if implemented successfully, will decrease emissions. a. Using cap-and-trade, the government could restrict pollution by placing a on the amount of emissions each company may emit through the issue of permits. Kyoto protocol tariff b. One feature of the cap-and-trade policy is that permits can be traded betwe quota panies that have already invested in emission lowering technologies and those that have not.
Transcribed Image Text:Externalities and Public Goods – End of Chapter Problem In order to curb CO2 emissions, the government creates a cap-and-trade system for freight companies that use semi-trailer trucks to move freight. Some freight companies have already spent lots of money investing in low-emission trucks or even developing battery technologies to decrease emissions. Other companies have invested nothing to decrease their emissions. Answer the following questions to explain how the cap-and-trade program, if implemented successfully, will decrease emissions. a. Using cap-and-trade, the government could restrict pollution by placing a on the amount of emissions each company may emit through the issue of permits. Kyoto protocol tariff b. One feature of the cap-and-trade policy is that permits can be traded betwe quota panies that have already invested in emission lowering technologies and those that have not.
b. One feature of the cap-and-trade policy is that permits can be traded between the "greener" companies that have already invested in emission lowering technologies and those that have not. Greener companies will most likely use the minimum amount of permits they need but refuse to trade the remaining permits to other companies to punish them for not cleaning up their act. O use as few permits as possible and sell their remaining permits to the "dirty" companies that need more permits to produce the same amount of output. not get to purchase many permits because the less efficient companies will need to purchase more in order to keep their output at the initial level. O purchase more permits because it allows them to expand output by a far greater amount than a "dirty" company, thus they are worth more to a green company.
Transcribed Image Text:b. One feature of the cap-and-trade policy is that permits can be traded between the "greener" companies that have already invested in emission lowering technologies and those that have not. Greener companies will most likely use the minimum amount of permits they need but refuse to trade the remaining permits to other companies to punish them for not cleaning up their act. O use as few permits as possible and sell their remaining permits to the "dirty" companies that need more permits to produce the same amount of output. not get to purchase many permits because the less efficient companies will need to purchase more in order to keep their output at the initial level. O purchase more permits because it allows them to expand output by a far greater amount than a "dirty" company, thus they are worth more to a green company.
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