Suppose There Will Be Global Catastrophe Unless We Hold Total

question 211

Multiple Choice

Suppose there will be global catastrophe unless we hold total carbon dioxide emissions at or below 35 million tons per year. As a result, 35 million tons of emissions permits are auctioned off and the proceeds distributed equally between everybody on Earth. Is this better, worse, or basically the same as allocating to each of 7 billion people on Earth 10 pounds of untradable emissions permits per year?

• A) better, because it lowers the cost of emissions abatement
• B) worse, because it raises the cost of emissions abatement
• C) about the same
• D) It is impossible to say.