Question

6. Achieving lower pollution Suppose a political candidate criticizes a government pollution permit policy that she says lets corporations buy and sell the right to pollute. She argues that our right to breathe and the future of our planet require real regulation instead of this type of government policy. Which of the following describes why most economists would disagree with her statement? A corrective tax would result in a more efficient outcome than either tradable permits or government regulation would. The environment is so important that it should be protected as much as possible, regardless of the cost. A free market in tradable pollution permits is typically more efficient than government regulation. Clean air is a fundamental right, and government regulation will allow too much pollution.

Answer 1

Answer:

A free market in tradable pollution permits is typically more efficient than government regulation.

Explanation:

In this scenario, most economists would disagree with the political candidate's statement because a free market in tradable pollution permits is typically more efficient than government regulation.

Most economists would disagree because a free market in tradable pollution permits, is basically giving manufacturing companies and individuals the legal right to pollution of the environment. For example, XYZ company is purchasing the permit of 500 units of carbon dioxide (CO2) pollution annually, this simply means it is permitted to pollute the environment by 500 units of CO2 annually.

Therefore, her submission is in contrast  or conflicts with the concept of real regulations as government regulation may not necessarily be more effective and efficient than the former.

Additionally, a free market in tradable pollution permits has some sort of benefits as companies can resell their unused permits or devise a cheaper means of reducing pollution. It also compensate companies that significantly reduces its pollution of the environment.