Which of the following statements is most accurate? An emission trading system: (V4
A. sets an explicit price on greenhouse gas emissions.
B. mandates similar levels of emissions reductions for all actors.
C. creates an economic incentive for emissions reductions to occur at the point of least cost.
ETS: a system based on the exchange of per mits for emission units, where actors who exceed their emissions limits are required to buy permits from those that have emitted less.
． The overall quantity of emissions is fixed, and market mechanisms are used
to set their price.
． E'ectiveness in Practice: depends crucially on the design of the ETS.
． If the scheme is too restrictive,'carbon leakage'occurs.
． Free a/location of allowances (to give industry an initial'buffer') has been a
