In a Cap and Trade System, Who Has the Most

question 7

Multiple Choice

In a cap and trade system, who has the most incentive to develop pollution abatement technologies?

• A) The polluters, since they will have to buy permits to pollute over a certain amount.
• B) The government, since they are responsible for setting up the system.
• C) The people that directly suffer from the pollution, since they are the ones who are negatively affected.
• D) The consumers, since they are the final users of the product.

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Definitions:

Technical Inputs

Elements related to the technological aspects of a project or system, including machinery, design parameters, and software requirements that contribute to its overall functionality and efficiency.

Time Value

The idea that money currently in hand is more valuable than an identical sum received later, because of its ability to earn more over time.

Relevant Cash Flow

Cash flows that will occur as a direct result of a decision made by a business, essential in capital budgeting and investment analysis.

Interest Expense

The cost incurred by an entity for borrowed funds, often a significant component of its operating costs.