Government can invest this money in building some renewable energy sources like wind, solar etc. They can also use the money to provide required equipment to people or firms responsible of pollution, also called polluter.

2.Why is a market for pollution permits easier to implement than strict government control of the pollution of individual firms?

It is easier to implement because there is less regulation needed with the permits. In strict government control of the pollution, there is going to be a wast of many resources to regulate.

3.What is the importance of incentives in achieving reduction of negative externalities? Does a market for pollution permits create more or less of an incentive to reduce emissions than direct government controls?

I think that incentives will have an important impact on reducing negative externatilies. Because for example sometimes, a force for you to do all your HW is needed (in this case you is the firms and the force is government).

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Government control is not economically profitable issue. It also causes loss of time and there will be money spent on inspectors to check it.

A market for pollution permits leads consumer to be more incentive to decrease emissions because it increases the production cost for the polluting firms which would decline revenue. To firms to minimize the damage inflicted upon their profits, they have to improve more environment-friendly ways of producing services, goods.

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2. The market for pollution permits is easier to implement than strict government control because there is less regulation needed with the permits, it is basically left up to the individual businesses to handle their permits and sell them off to each other. With strict government control there is a lot of government attention needed to assure the proper follow through of the regulations and thus it might not be carried out as effectively since it is harder for the government to properly evaluate which businesses are producing too much waste or are not following the rules, etc.

3. When government controls it by taxes, firms are reducing their supply and increase prices so by doing that they can control their profit easily and consumers are being damaged by that so governments use permits to overcome that problem.

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I think your explanation about question 2 and 3 is really good. I was kind of lost when i first read the question, but now i was able to get what's going in in this article

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2. I don’t get the second question that much, but I think this is easier to implement than having really strict government, because this lets corporations to work individually. When there is one strict government, the government has to intervene all the details to control the pollution problem, and this would cost a lot to actually supervise them and there would be so many wastes in the administration process, too.

3. By putting pollute permits in economic meaning, the market theory would work to reduce the negative externalities. As it is mentioned in the article, if the corporation does not reduce the money spend on to buy permits, their costs of production would be higher, and this would make them lose competition in the meaning of price in the market. Therefore, this regulation would encourage reducing emissions of CO2 gases by giving them reason to try to reduce CO2 gases.

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I agree with your idea which is using revenue for the sake of environment.

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Government can use that money for building public goods or money can be used for finding solutions for overcome the pollution problem by create new methods to decrease pollution in production process.

2.Why is a market for pollution permits easier to implement than strict government control of the pollution of individual firms?

As in article mentioned, control of pollution is very hard thing for government. They do not use taxation or another things because it is hard to decide how much will it be and how can they control the pollution by taxation so selling permits for pollution is a good way for controlling that and by doing that individuals can also get this permits so price of permits will become much and it will force firms to find more environmentally friendly methods for production.

3.What is the importance of incentives in achieving reduction of negative externalities? Does a market for pollution permits create more or less of an incentive to reduce emissions than direct government controls?

When government controls it by taxes, firms are reducing their supply and increase prices so by doing that they can control their profit easily and consumers are being damaged by that so governments use permits to overcome that problem.

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It was a nice idea to mention about the article called " The Commons of Tragedy" but it would be better if you mentioned this article in the same answer too…

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A government could invest the revenue earned from the sale of production permits to firm by environmentally friendly ways of producing which may lead the environment pollute less. “. Furthermore, if the permits are auctioned off from the beginning, billions can earned in revenue for the government, which in theory could be used to subsidize the research and development of pollution abatement technologies and “green energies” like wind and solar power.” (from the article) Government could invest money or subsidize.

2. Why is a market for pollution permits easier to implement than strict government control of the pollution of individual firms?

“It reduces society’s costs because pollution rights can be bought and sold. Some firms will find it cheaper to buy the rights than to acquire abatement equipment; other firms can sell their rights because they may be able to reduce pollution at a lower cost. The incentive for all firms is to reduce their own pollution and sell the permits they no longer need, adding to the profits of “green firms”.”( from the article) And also individual firms can buy permits to make more expensive for firms to pollute.

3. What is the importance of incentives in achieving reduction of negative externalities? Does a market for pollution permits create more or less of an incentive to reduce emissions than direct government controls?

Incentives are very important in achieving reduction of negative externalities. “If conservation or individuals wish to make it more expensive for firms to pollute, they can buy permits and hold them. This drives up the price of remaining rights, further encouraging polluters to reduce emissions.”( from the article) As I have mentioned in the second question by individual firms the incetive emissions can be reduced.

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I really liked the way how you answered the third question. I think that the idea of incentives is extremely important when talking about something such as environmental responsibility (which no one wants to take the blame for). You have to give people a reason to care and incentives, such as money, is a great way to do that.

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The government could invest the revenue in many things. If they wanted to keep with the environmental idea, they could invest in clean energy research such as wind, solar, or fusion power. They could also invest to reduce other negative externalities such as smoking. Really they could use the money for anything they would want.

2. Why is a market for pollution permits easier to implement than strict government control of the pollution of individual firms?

The pollution permits idea is much easier to implement because there is a return from it. Strict government control would be extremely hard to enforce (as we saw with the whole BP incident in the Gulf of Mexico region) and there needs to be money spent on the enforcement. On the other hand a pollution permits idea that involves a tax is much harder for a firm to avoid, and the government doesn't have to do much to enforce it. They also gain large amounts of revenue from this plan. This makes the pollution permits idea a much more attractive plan to the government.

3. What is the importance of incentives in achieving reduction of negative externalities? Does a market for pollution permits create more or less of an incentive to reduce emissions than direct government controls?

Incentives are very important in reducing negative externalites. This is because it allows there to be a greater incentive for firms to want to start the program in the first place, and for the ones that are suffering from the program, it gives them a reason to change. If a firm is an extremely efficient firm (in regards to pollution and environmental friendliness) they would want a program like this as they would most likely be benefiting from it. Firms that aren't as good may have a consequence from being inefficient, but they would have a reason to change. The idea of earning money is much more attractive than paying less money.

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They could use the extra revenue to pay for wind farms or other green energy sources that don't pollute as much. It would also mean that governments could pay for environmental damage that has already been done. For example planting trees or investing money into promoting recycling centers so that they might become more abundant.

2. Why is a market for pollution permits easier to implement than strict government control of the pollution of individual firms?

No matter how strict the control is on firms, chances are they will find a way to bypass the control or find loopholes in which they can pollute just as much without any dire consequences. There isn't any way of bypassing taxes because it's directly against the law.

3. What is the importance of incentives in achieving reduction of negative externalities? Does a market for pollution permits create more or less of an incentive to reduce emissions than direct government controls?

Every firm wants to maximize profits, so by reducing CO2 emissions by buying lots of permits, the permits that the company realized it might not need, it can sell them off for pure profit. This is the incentive to buy the permits and reduce their pollution.

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I agree with your answers. I think you made a very good explanation for the second question. Government cannot inspect a company every single day in order to be strict ruler. So this lead companies to pollute environment more.

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2) The market for pollution permits is easier to implement than strict government control of the pollution of individual firms because government always want companies to do their job. If they use strict government control then they need to spend more time on it, also they should use more money to inspect them which is not economically profitable. But when they permit they also earn loads of money which they can use to fix environmental damage.

3) Incentives are very significant for firms and companies as they only think about economical benefit. Because the aim of a company is to earn as much as they can instead of spending loads of money on environmental ways of producing that decrease their profit. So incentives play big role to motivate companies about environmental aspects. Strict government controls do not motivate companies, they usually make companies disobedient. But when there are permits companies can turn them into profits which make these permits into incentives.

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I agree with you .As you said the government could invest money on finding ways for the firms to pollute less.

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