Beijing officials issued a red alert for air quality, closed schools, limited automobile traffic, and kept people
Question:
Beijing officials issued a “red alert” for air quality, closed schools, limited automobile traffic, and kept people indoors to avoid toxic smog. Most of Beijing’s energy comes from carbonemitting coal. The u.S. EPA is working with China to develop a national capandtrade system.
Explain the inefficiency in Beijing’s market for electricity and contrast it with the U.S. market. How can cap-and-trade achieve an efficient outcome?
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The Beijing market for electricity is inefficient because it has a large external cost a...View the full answer
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