Question

The government sets an allowable amount of pollution and lets companies buy and sell the right to release this pollution in a common incentive based regulatory approach called:

A. emission checks
B. pollution
C. vouchers
D. tradable permits

Answer 1

Answer:

D. tradable permits

Explanation:

Tradable permits also known as emissions allowance is an attempt at regulating pollution through the market system. tradeable permit gives right to the bearer of such permit to emit pollution up to a limited amount and if such permit is partially used or for one reason or the other, it is unused, it can be traded or negotiated to a willing buyer.