Plants A and B emit 12 tons and 6 tons of carbon dioxide (CO2), respectively. MAC(marginal abatement costs) for a = 12 - Ea, MACb=12-2Eb MD(marginal damage) = 1/3*E (E indicates CO2 emission) Suppose the government decides to introduce a carbon tax on CO2 emissions. What is the tax amount (ie tax rate) per optimal ton of CO2 emissions? And what is the total revenue that would make the government sufficiently capable of introducing a carbon tax?
Plants A and B emit 12 tons and 6 tons of carbon dioxide (CO2), respectively. MAC(marginal abatement costs) for a = 12 - Ea, MACb=12-2Eb MD(marginal damage) = 1/3*E (E indicates CO2 emission) Suppose the government decides to introduce a carbon tax on CO2 emissions. What is the tax amount (ie tax rate) per optimal ton of CO2 emissions? And what is the total revenue that would make the government sufficiently capable of introducing a carbon tax?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Plants A and B emit 12 tons and 6 tons of carbon dioxide (CO2), respectively.
MAC(marginal abatement costs) for a = 12 - Ea, MACb=12-2Eb
MD(marginal damage) = 1/3*E (E indicates CO2 emission)
Suppose the government decides to introduce a carbon tax on CO2 emissions. What is the tax amount (ie tax rate) per optimal ton of CO2 emissions? And what is the total revenue that would make the government sufficiently capable of introducing a carbon tax?
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