It has been proposed that a government agency be charged with the responsibility for determining the amount of pollution which the atmosphere or a body of water can safely recycle, and sell these limited rights to polluters. From an economist's perspective, what would be the advantage of such a market for pollution rights?
Answer
Government agencies can make a great deal of money.
Pollution would be eliminated because nobody would want to pay for such a right.
The quality of water or air can be maintained at some acceptable standard through economic incentives.
The social consciousness of people would be raised as they obtain more appreciation for the importance of conservation.