Tradeable pollution Permits vs Indirect Tax

Question 1

Definitions

Answer 1

Tradeable pollution permits: Tradable pollution permits are a market-based approach where the government sets a limit on total pollution and issues firms with permits allowing them to pollute up to a certain amount. These permits can be traded, meaning firms can buy and sell permits, incentivizing them to reduce emissions efficiently and cost-effectively.

Indirect Tax: Tax on goods and services could be specific or ad valorem, makes the price of demerit goods and services competitive to help reduce its consumption

Question 2

Tradeable pollution permits KAA

Answer 2

Signpost:Highly effective
-Permits act as a profit incentive , as it encourages firms to invest in cleaner technology to reduce emissions, allowing them to sell off any extra permits

-Tradable pollution permits are a market-based approach where the government sets a limit on total pollution and issues firms with permits allowing them to pollute up to a certain amount. These permits can be traded, meaning firms can buy and sell permits, incentivizing them to reduce emissions efficiently and cost-effectively. (Holds polluting firms accountable)

-Monetary incentive could lead to an overall reduction in pollution across the entire industry

Question 3

Tradeable pollution permits eval

Answer 3

Issues with Tradeable pollution Permits:
-Disputes arise over allocation of permits and some smaller firms may deem the allocation if larger firms have better access to them
-Govt Failure:cost to the govt of mentoring and enforcing carbon pollution emission rules as they are harder to regulate than indirect taxes

Question 4

ICL you’ve already got a KAA and Eval on Indirect tax, just go to your other decks if you want the answer

Answer 4

ICL you’ve already got a KAA and Eval on Indirect tax, just go to your other decks if you want the answer