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# Proposed CO2 reduction schemes present large uncertainties in terms of

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Proposed CO2 reduction schemes present large uncertainties in terms of  [#permalink]

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Updated on: 04 Oct 2019, 07:13
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New Project RC Butler 2019 - Practice 2 RC Passages Everyday
Passage # 369, Date : 04-Oct-2019
This post is a part of New Project RC Butler 2019. Click here for Details

Proposed CO2 reduction schemes present large uncertainties in terms of the perceived reduction needs and the potential costs of achieving those reductions. In one sense, preference for a carbon tax or tradeable permit system depends on how one views the uncertainty of costs involved and benefits to be received.

For those confident that achieving a specific level of CO2 reduction will yield very significant benefits then a tradeable permit program may be most appropriate. CO2 emissions would be reduced to a specific level, and in the case of a tradeable permit program, the cost involved would be handled efficiently, but not controlled at a specific cost level. This efficiency occurs because control efforts are concentrated at the lowest-cost emission sources through the trading of permits.

However, if one is more uncertain about the benefits of a specific level of reduction then a carbon tax may be most appropriate. In this approach, the level of the tax effectively caps the marginal control costs that affected activities would have to pay under the reduction scheme, but the precise level of CO2 achieved is less certain. Emitters of CO2 would spend money controlling CO2 emissions up to the level of the tax. However, since the marginal cost of control among millions of emitters is not well known, the overall effect of a given tax level on CO2 emission cannot be accurately forecasted.

1. Which of the following can be inferred from the passage concerning a carbon tax?

(A) if it were tiered according to the income of each emitter, then it could be more effective than tradeable permits.
(B) implementing it for all known emitters could be cost-prohibitive.
(C) the marginal cost of control associated with such a tax will likely be affected by other pending CO2 regulations.
(D) if it were introduced at too low a level, it may not result in any significant reduction in CO2 emissions.
(E) it is generally regarded as a better option than tradeable permits by most environmentalists.

2. According to the passage, who should support a tradeable permit program?

(A) a person who is unconcerned with the effects of a new carbon tax.
(B) one who believes that CO2 emissions have already been cut to acceptable levels.
(C) a person who is uncertain that cutting CO2 emissions by a certain percentage will produce the best results.
(D) one who is more concerned with cutting the CO2 emissions of the heaviest producers.
(E) a person who believes that cutting CO2 emissions by a certain percentage will produce the best results.

3. The author would most likely agree with which of the following?

(A) the tradeable permit program offers the best overall solution to rising CO2 emissions.
(B) it is difficult to predict the long term effects of either scheme given the currently available information.
(C) the carbon tax will force major emitters to significantly reduce their CO2 emissions using economic incentives.
(D) CO2 emissions represent the most significant contributor to the greenhouse effect.
(E) other schemes under review may provide better alternatives than the tradeable permit program or the carbon tax.

Originally posted by shridhar786 on 03 Oct 2019, 09:45.
Last edited by SajjadAhmad on 04 Oct 2019, 07:13, edited 1 time in total.
Updated.
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Re: Proposed CO2 reduction schemes present large uncertainties in terms of  [#permalink]

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09 Mar 2020, 07:07
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Re: Proposed CO2 reduction schemes present large uncertainties in terms of   [#permalink] 09 Mar 2020, 07:07