Question: The Environment Protection Agency sometimes imposes penalties on firms that pollute the environment. A mechanism that has been developed to limited excessive air pollution is to use carbon credits. Carbon credits that are tradeable permit scheme that allows business that cannot meet their greenhouse gas-emission limits to purchase carbon credits from businesses that are below their quota. By allowing credits to be bought and sold, a business for which reducing its emission would be expensive or prohibitive can pay another business to make the reduction for it.
Do you agree with this arrangement?