question archive Carbon dioxide emissions have been linked to worsening climate conditions
Carbon dioxide emissions have been linked to worsening climate conditions
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Carbon dioxide emissions have been linked to worsening climate conditions. The following table lists some possible public policies aimed at reducing the amount of carbon dioxide in the air.
For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax.
1. Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $170 to any citizen who plants a tree.
2. The government limits total carbon-dioxide emissions by all factories to 140,000 tons per month. Each individual factory is given the right to emit 120 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace.
3. The government charges factories $170 for every ton of carbon dioxide they emit.
4. The government orders every factory to adopt a new technology, which reduces carbon-dioxide emissions into the atmosphere.
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1.
Corrective subsidy. The government has provided financial assistance to boost the generation of the positive externality of tree plantation.
2.
Tradable permit system. The tradable permits will make it costly for factories to pollute and thus internalize the externality of carbon dioxide.
3.
Corrective tax. A tax meant to induce factories to take account of social cost emanating from a negative externality.
4.
A command-and-control policy. It is a requirement by the government to businesses to deploy an environmentally friendly technology.
