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.Public PolicyCommand-and-Control PolicyTradable Permit SystemCorrective SubsidyCorrective TaxThe government limits total carbon-dioxide emissions by all factories to 130,000 tons per decade. Each individual factory is given the right to emit 170 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $480 to any citizen who plants a tree. The government orders every factory to adopt a new technology, which reduces carbon-dioxide emissions into the atmosphere. The government charges factories $480 for every ton of carbon dioxide they emit.

A negative externality / external cost are a type of spillover which imposes a cost on the third…

Answered: Carbon dioxide emissions have been…

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 5PA

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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.

Public Policy	Command-and-Control Policy	Tradable Permit System	Corrective Subsidy	Corrective Tax
The government limits total carbon-dioxide emissions by all factories to 130,000 tons per decade. Each individual factory is given the right to emit 170 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace.
Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $480 to any citizen who plants a tree.
The government orders every factory to adopt a new technology, which reduces carbon-dioxide emissions into the atmosphere.
The government charges factories $480 for every ton of carbon dioxide they emit.

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