Benefits Of An Emissions Tax Or A Tradable Permit Policy Can Achieve The Best Solution For The Environment

1811 Words Nov 7th, 2016 8 Pages
Beyond environmental issues related to poverty are those that can increase from economic growth itself as countries become more industrialized, rise their agricultural production, and spend greater amounts of fossil fuels, the environment often suffers. The challenge facing policymakers worldwide is to control economic growth in a way that increases its benefits and reduces its costs, in terms of harm to both the environment and to the free market system. (Dahlberg,2012). This essay will argue that either an emissions tax or a tradable permit policy can achieve the best solution for the environment. Booth tax and tradable permits have benefits and drawbacks. Taxes leave businesses and consumers with flexibility to determine the lower cost to reduce the environmental harm. Nevertheless, Pollution permits give the incentive to develop new technologies aimed at inexpensively reducing pollution and it is more effectively than taxes.

In economics, an externality is a cost or benefit that influences a party who did not choose to incur that cost or benefit. Moreover, negative externality accrues when the production or consumption of a good cause harmful influence to a third party, sometimes these effects are indirect and tiny. However, when they are large, they can become problematic. Furthermore, in the case of pollution, usually an example of a negative externality, a polluter makes resolutions based particularly on the direct cost and profit opportunity from production and…
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