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:

Revenues

The total income generated from the sale of goods or services related to a company's primary operations.

Adjusting Entries

Entries recorded in journals at the conclusion of an accounting period to assign revenues and costs to the time frame in which they were genuinely incurred.

Source Documents

Source documents are original records that contain the details to support business transactions, such as receipts and invoices.

Adjustments Columns

In accounting, columns in ledgers or worksheets where adjustments are recorded before preparing the final financial statements.