The issue of tradable permits, or cap-and-trade schemes is a important one at the moment, and it is a relevant solution to negative externalities of production in the microeconomics section of the course. The basic idea is to set a limit (cap) on the amount of pollution and then divide this up into permits that …
At the moment in Malawi they are arguing about whether or ‘passing wind’ should be banned. Some of those in the government are effectively claiming that it is a form of market failure, and as such are proposing government legislation as a solution to this. The questions then arise as to how this could be …
A number of businesses in Europe have been ‘ripped off’ recently by fraudsters who stole a large number of carbon permits. These are a very good example of ‘tradable permits’ that can be used as a market based solution to the negative externality of air pollution. The second site has a good explanation of how …