Vancouver has a fish rendering plant and a galvanizing factory which both emit smoke containing a chemical that is harmful when inhaled in large amounts. Give examples of three ways the Vancouver city government could respond to this externality. What are the advantages and disadvantages of each of these solutions? (4points)
Read the following article from the New York Times and answer the following questions. (6 points)
a. Where does the money raised by the British Columbia carbon tax go?
b. What effect has the new BC carbon tax had on green house gas emissions?
c. Is it likely that other countries will adopt a similar carbon tax? Why or why not? Explain.
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