Essay questions: 3. When the European Union (EU) set up its cap and trade program for GHG emissions in 2005 they include

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Essay Questions 3 When The European Union Eu Set Up Its Cap And Trade Program For Ghg Emissions In 2005 They Include 1 (30.75 KiB) Viewed 23 times

Essay questions: 3. When the European Union (EU) set up its cap and trade program for GHG emissions in 2005 they included two features in the market design. First, they let each country set its own cap on emissions for their country but the permits were freely tradeable across country boundaries. For example, a firm in England could buy a permit issued in Poland. Second, they let firms look for cheaper sources of abatement outside the EU and get credit for any emissions reduction. For example, a firm in England could pay to reduce methane emissions from agriculture in Indonesia and be given credit for this level of abatement. Discuss the good and bad economic aspects of these two design features.