Asked by Jonnathan Macias on Jun 29, 2024
Verified
Which of these approaches to solving the tragedy of the commons is considered a market approach?
A) Command-and-control
B) Mean absolute deviation
C) Cap-and-trade
D) Mutual coercion
Cap-And-Trade
An environmental policy tool that sets a cap on emissions and allows entities to buy and sell permits for emissions as a way to reduce pollutants in a cost-effective manner.
Market Approach
A method of determining the value of an asset based on the selling price of similar items in the market.
Tragedy Of The Commons
A scenario where individual use of a shared resource in their own interest depletes or spoils that resource, despite understanding that this is against the common good.
- Identify market approaches to solving environmental issues, such as the cap-and-trade system.
Verified Answer
AK
ABDULAZIZ KHALID ABDULAZIZJul 02, 2024
Final Answer :
C
Explanation :
The cap-and-trade approach to solving the tragedy of the commons is considered a market approach. In this approach, a cap is set on the amount of pollution that can be emitted, and permits to emit are then traded among polluters. This creates a market incentive for companies to reduce their pollution levels, as those who emit less than their assigned allowance can sell their permits on the open market. This approach allows the market to determine the most efficient way of reducing pollution, rather than relying on government regulations or coercion. Therefore, the correct choice is C.
Learning Objectives
- Identify market approaches to solving environmental issues, such as the cap-and-trade system.