Which of the following are the main categories of market-oriented approaches to pollution control?

• A. Direct government provision and voluntary agreements
• B. Command-and-control regulations and subsidies
• C. Tradable permits and pollution taxes
• D. Price ceilings and quotas

Answer: (C)

Verified step by step guidance

1. Understand that market-oriented approaches to pollution control use economic incentives to encourage firms and individuals to reduce pollution rather than relying on direct regulations.
2. Identify the main types of market-oriented instruments: these typically include pollution taxes (also called Pigouvian taxes) and tradable permits (also known as cap-and-trade systems).
3. Recall that pollution taxes impose a cost per unit of pollution emitted, motivating firms to reduce emissions to save money, while tradable permits set a cap on total pollution and allow firms to buy and sell emission allowances.
4. Recognize that other options like command-and-control regulations, direct government provision, voluntary agreements, price ceilings, and quotas are either regulatory or non-market approaches, not market-oriented.
5. Conclude that the main categories of market-oriented approaches to pollution control are tradable permits and pollution taxes.