The internal combustion engines that power most cars generate a number of pollutants, including carbon dioxide, nitrogen dioxide, benzene, and others. If it were costless to implement (design, roll out, monitor, & enforce) new environmental policies, which of the following would economists likely recommend as a way to regulate those pollutants? O a. Introduce a cap and trade system (permit market) for CO2, but adjust the cap downward by 10% to account for the other pollutants. O b. Introduce a single environmental tax (say, 20%) for all new gas-powered cars, regardless of their emissions profile O c. Introduce a separate tax for each externality: one tax per pollutant, with tailpipe monitors measuring actual emissions.

The internal combustion engines that power most cars generate a number of pollutants, including carbon dioxide, nitrogen dioxide, benzene, and others. If it were costless to implement (design, roll out, monitor, & enforce) new environmental policies, which of the following would economists likely recommend as a way to regulate those pollutants? O a. Introduce a cap and trade system (permit market) for CO2, but adjust the cap downward by 10% to account for the other pollutants. O b. Introduce a single environmental tax (say, 20%) for all new gas-powered cars, regardless of their emissions profile O c. Introduce a separate tax for each externality: one tax per pollutant, with tailpipe monitors measuring actual emissions.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 1CQQ

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