Emissions taxes and tradable emissions permits both ensure that any given reduction in total pollution is achieved at the lowest possible cost.This is not the case for environmental standards since they fail to ensure that those who can reduce pollution most cheaply are in fact the ones to do so.

Emissions Taxes

Levies imposed by governments on the emission of pollutants, aimed at reducing environmental damage by making it costly to pollute.

Tradable Emissions Permits

Tradable Emissions Permits are allowances to emit limited quantities of pollutants that can be bought and sold, aiming to reduce overall emissions in a cost-effective manner.

Environmental Standards

Regulations and criteria set by governments or international bodies to control the level of pollutants and manage the impact on the environment.