Question

Suppose the government is trying to decide whether to tax pollution units or distribute pollution permits. Graph each scenario. Which do you think would be more effective in reducing pollution?

Answer 1

tax pollution units or distribute pollution permits they both have their advantages and disadvantages

polltion tax theses taxes are like carbon tax, petrol tax etc are implemented by manny coountries and in most of the cases this idea become successful but it hard poor then the rich as increasing pollution is a cost to society and this social cost have to burried by producers and consumers both. as this scheme increase the government revenue and motivate market to produce machinery of such type of engine which generates less pollution.

pollution permits: its trying to encourage firm to reduce the quantity of pollution they create. policy crete the financial incentive to create less because you can sell your excess permit to others. buty its is difficult to implement this policy because its difficult to measures the amount of pollution created and as human behaviour is not constant if the governmen is too generous pthere will b e little pollution reduction if govternment is strict then they start complaining