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.

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Definitions:

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a given period of time.

Balance Of Trade

The difference between a country's exports and imports of goods and services, indicating whether a country has a trade surplus or deficit over a specific period.

Trade Deficit

A situation where the value of a country's imports exceeds the value of its exports.

Exports

Goods or services sold by a country to buyers in another country.