Some Environmentalists Have Criticised Tradable Emissions Allowances on the Grounds

question 173

Essay

Some environmentalists have criticised tradable emissions allowances on the grounds that they give permit holders a licence to pollute.Furthermore,environmentalists argue that those who sell their permits receive a monetary benefit from their contribution to polluting the environment.Use economic reasoning to evaluate this criticism.

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Definitions:

Entry-Restricting Legal Barriers

Regulations and legal requirements that limit the ability of new competitors to enter an industry.

Monopoly Cartel

A collaboration of independent businesses formed to control production, sales, and prices of goods within a market, behaving similarly to a single monopoly.

Funeral Home Industry

A sector of the economy that provides services related to the preparation, management, and coordination of funerals.

Mutual Interdependence

A condition in oligopolistic markets where the actions of one firm significantly influence the decisions and outcomes of other firms within the market.