The difference between a cap and trade system for air emissions permits and an individual transferable quota shares system for fisheries is: The permit price in the emissions market is based on minimizing costs across all emitters and the share price in the fishery quota market is based on maximizing profits. Emissions markets have relied on permit auctions to determine the initial allocation of permits but fishery markets have free allocations to existing harvesters. The cap in the emissions market can be arbitrary but the cap in the fishery market must be the maximum sustainable yield. Emissions markets have typically expanded the number of allowances but fishery markets have reduced quota shares to prevent overfishing. Emissions markets allow new entrants into the market but fisheries markets are closed to new entrants.

The difference between a cap and trade system for air emissions permits and an individual transferable quota shares system for fisheries is: The permit price in the emissions market is based on minimizing costs across all emitters and the share price in the fishery quota market is based on maximizing profits. Emissions markets have relied on permit auctions to determine the initial allocation of permits but fishery markets have free allocations to existing harvesters. The cap in the emissions market can be arbitrary but the cap in the fishery market must be the maximum sustainable yield. Emissions markets have typically expanded the number of allowances but fishery markets have reduced quota shares to prevent overfishing. Emissions markets allow new entrants into the market but fisheries markets are closed to new entrants.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 1.2CE

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