Markets for the right to pollute are:

A) established by individual firms when they reduce emissions.
B) established by government when it issues tradable pollution permits.
C) likely to result in fewer incentives to develop and implement technology that reduces pollution.
D) a means by which more pollution is encouraged.

Tradable Pollution Permits

A market-based approach to controlling pollution by allocating permits that allow the holder to emit a certain amount of pollution, which can be traded among companies.

Emissions

The act of releasing substances, especially pollutants, into the atmosphere or environment.

Government

An organized system that establishes and enforces rules and institutions to govern a community, region, or country.