Suppose E's initial (unregulated) GHG emissions are equal to 30 units, and R's initial emissions are equal to 20 units. With an abatement target of 20 total units of GHG abatement, what should the "cap" be in a cap-and-trade program?
30 units
50 units
Can't be determined
20 units
d) If such a cap-and-trade program is implemented, and assuming that the permit market functions well, what is going to be the equilibrium permit price?
$24/permit
$64/permit
$48/permit
$32/permit