Question

question 18
economists generally favor the use of tradable emission allowances to reduce pollution. however, the use of these allowances has been criticized by some environmentalists. which of the following describes this criticism?
some environmentalists oppose allowances on legal grounds; they believe the use of allowances is unconstitutional.
some environmentalists believe that the price of allowances is often too high for consumers to afford.
some environmentalists believe the allowances give firms a license to pollute.
some environmentalists believe that pigovian taxes are a more efficient way to reduce pollution.
question 19
figure 5 - 10
price (dollars per)

Explanation:

Some environmentalists are concerned that tradable emission allowances essentially give firms permission to pollute within the allowed - emission limits, which goes against their goal of minimizing pollution. They see it as a form of 'license to pollute'. There is no common claim about legality in the context of constitutionality, the price being too high for consumers is not the main criticism, and the comparison with Pigovian taxes is not the core of the criticism of the allowances themselves.

Answer:

Some environmentalists believe the allowances give firms a license to pollute.