eco pollution permits

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  • Pollution Permits.
    • They're cost effective and self financing
    • There is a danger that permits acquired by existing participants in the new market may block new firms coming in; this is not in the interest of the consumer.
  • Pollution Permits impose an overall limitation of polluting CO2.
    • Pollution Permits.
      • They're cost effective and self financing
      • There is a danger that permits acquired by existing participants in the new market may block new firms coming in; this is not in the interest of the consumer.
  • Overtime the number of permits given to firms is reduced so firms are gradually encouraged to reduce their CO2.
    • The danger is that firms may move out of Europe to avoid the charge.
      • This can reduce the demand for the permits so its cheaper for firms to operate (dirty) as they can buy cheaper permits to extend their use.
    • This reduces economic growth.
      • This can reduce the demand for the permits so its cheaper for firms to operate (dirty) as they can buy cheaper permits to extend their use.

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