Asked by Christina Ercolani on May 19, 2024
Verified
Under a cap and trade system,the price of emissions is
A) determined directly as a function of the output.
B) determined indirectly and can change.
C) determined indirectly and is invariant.
D) determined directly and is invariant.
Cap And Trade
An environmental policy that sets a limit (cap) on emissions and allows companies to buy and sell allowances to meet it, promoting cost-effective emission reduction.
Emissions
The release of pollutants into the air from various sources, including factories, vehicles, and industrial processes.
Invariant
A property or quantity that remains unchanged under certain conditions or transformations, frequently discussed in mathematics and physics.
- Gain insight into the operations and effects of diverse environmental policy strategies like cap and trade frameworks and carbon tax schemes.
- Grasp how prices of emissions are determined under different regulatory systems.
Verified Answer
LT
Lorena TretoMay 20, 2024
Final Answer :
B
Explanation :
Under a cap and trade system, the price of emissions is determined indirectly through the trading of emission permits. This price can change over time depending on the supply and demand of permits in the market. Therefore, the best answer is B - the price of emissions is determined indirectly and can change.
Learning Objectives
- Gain insight into the operations and effects of diverse environmental policy strategies like cap and trade frameworks and carbon tax schemes.
- Grasp how prices of emissions are determined under different regulatory systems.