MARKETABLE POLLUTION PERMITS

The approach of marketable pollution permits is one of the pollution control techniques. In this approach the authority sets the maximum lev¬el of pollution and issues permits (or certificates) for this amount. The re¬gulating body can either distribute the permits freely or sell them. Once the permits are obtained by the polluting firms the exchange can take place. There exists a market in which polluters buy and sell the certificates. If a firm is operating below the standard level of pollution, which is set by the environmental agency, and has some spare permits it can sell them in the market. On the other hand, if there are some other firms which need more certificates for their production level they demand those papers from the others. Hence, the pollution permits are tradeableW.