Explain how the basic concept of marketable permits or ‘cap-and-trade” can be applied to regulate fisheries and air pollution emissions. What is the meaning of a ‘cap’ in the context of regulating a fishery and an air pollutant? How would potential future changes in the cap influence the price of permits and the viability of the permit market? How would a regulator’s objective in setting a cap be different for a fishery compared to an air pollutant? What determines whether permits will be traded in the fishery or for the air pollutant and does it matter if there are restrictions on the type and number of trades that can occur?
Explain how the basic concept of marketable permits or ‘cap-and-trade” can be applied to regulate fisheries and air pollution emissions. What is the meaning of a ‘cap’ in the context of regulating a fishery and an air pollutant? How would potential future changes in the cap influence the price of permits and the viability of the permit market? How would a regulator’s objective in setting a cap be different for a fishery compared to an air pollutant? What determines whether permits will be traded in the fishery or for the air pollutant and does it matter if there are restrictions on the type and number of trades that can occur?
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Explain how the basic concept of marketable permits or ‘cap-and-trade” can be applied to regulate fisheries and air pollution emissions.
What is the meaning of a ‘cap’ in the context of regulating a fishery and an air pollutant?
How would potential future changes in the cap influence the price of permits and the viability of the permit market?
How would a regulator’s objective in setting a cap be different for a fishery compared to an air pollutant?
What determines whether permits will be traded in the fishery or for the air pollutant and does it matter if there are restrictions on the type and number of trades that can occur?
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