Because there is high uncertainty in the compliance costs of firms, some argue that the 9L0 509 optimum choice is the price mechanism.
However, some scientists have warned of a threshold in atmospheric concentrations of carbon dioxide beyond which a run-away effect could take place, with a large possibility of causing irreversible damages. If this is a conceivable risk then a quantity instrument 9L0 402 could be a better choice because the quantity of emissions may be capped with a higher degree of certainty. However, this may not be true if this risk exists but cannot be attached to a known level of GHG concentration or a known emission pathway
Thursday, September 4, 2008
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