King Rat (gkr) wrote,
King Rat

Eco 200: trading pollution credits

(individual) Suppose that government agencies decide exactly how much of each kind of industrial pollutant they will allow within a given airshed and sell the rights to discharge these qantities of pollutants to the highest bidder.

  1. Which firms would offer the highest bids?

    Those with the highest costs to reduce their pollutant output.

  2. How could citizens interested in cleaner air than the environmental agency had ordered use this system to obtain what they want?

    They could purchase some of the rights to discharge pollutants, then not use them. However, this method does not always work. In the 1990s, environmentalists intent on reducing damage to National Forests purchased grazing rights intent on not using them. They were forced to give up those rights after paying for them, because they didn't intend to use them.

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