Answer:
Gene's Gloves was given the right to dump 5,000 gallons of harmful chemicals. It will need to spend $10,000 ($1 per gallon x 10,000 gallons) to substitute harmful chemicals for harmless chemicals in order to keep working.
Wally's Wallet was also given the right to dump 5,000 gallons of harmful chemicals. It will need $60,000 ($3 per gallon x 20,000 gallons) to treat those chemicals and turn them harmless in order to keep working.
If Gene can sell its right to dump 5,000 gallons to Wally, for a price higher than $5,000 but lower than $15,000, both companies would win:
Gene would spend $15,000 in harmless chemicals but it would have between $5,001 and $14,999 in revenue from the selling of "pollution rights".
Wally will spend $45,000 in treating harmful chemicals but it will have to pay Gene between $5,001 and $14,999 for buying their "pollution rights".