What Is the Rationale Behind a Tradable Emission Allowance Scheme

question 260

Multiple Choice

What is the rationale behind a tradable emission allowance scheme?

• A)to create a market for externalities: the scheme brings together buyers and sellers of marketable permits
• B)to discipline polluting firms by specifying the maximum amount of emissions allowed and giving them permits to pollute up to their allowance
• C)to raise revenue for the government through the sale of emission permits and at the same time set an emissions target
• D)to provide firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance

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Definitions:

Exact Interest

Interest calculation method utilizing the actual number of days in the interest period and a 365-day year to determine the accurate interest due.

Simple Interest

Interest calculated solely on the principal amount of a loan or investment, without compounding over time.

360-Day Year

This is a simplified method used in some financial calculations where the year is assumed to have 360 days for ease of interest computation.

Total Amount

The complete sum or quantity of something, encompassing all components or elements.