What are tradable pollution permits?

• A. A government tax levied on each unit of pollution emitted, paid by firms according to their emissions.
• B. Non-transferable pollution quotas that limit emissions for firms but cannot be exchanged between firms.
• C. Marketable allowances issued by a regulator that give firms the right to emit a specified quantity of pollution and can be bought and sold among firms.
• D. Financial subsidies paid to firms for reducing emissions below a mandated baseline.

Answer: (C)