#3 Externality — The Global Tradable Pollution Permits Karen CHAN Ka Ying Introduction According to the basic theory of microeconomics, mutually beneficial trades are possible with the presence of marginal abatement costs differences. In terms of the trades of pollution permits, the level of pollution remains the same as when it is regulated by law; but the amount spent on pollution control is lower. Thus, we say that the practice of tradable pollution permits increases efficiency. In …showed first 75 words of 1194 total…

…showed last 75 words of 1194 total…polluted. Now, when we come to the permits method, it is easy to find its advantages over the others — efficiency and flexibility. The technical part of the method may still have lots of problems, with regard to its monitoring and enforcement difficulties. But, in the long run, it will proved to be successful, provided that countries adopt the same philosophy at home, so that the national practices can go in line with the global one.