Great question! Some of the permits are grandfathered to certain firms, so if those firms wanted to pollute they could just hold on to their permits. But also, right now the permits are pretty cheap, probably way below what firms would be willing to pay for them. so driving up the price of permits would get you closer to the price point at which firms would "feel the squeeze", but that would take *a while*.
I think this also highlights how much easier/cleaner a carbon fee might be -- if you just make polluters pay a tax for the carbon they produce, there's none of this permit business.
Great question! Some of the permits are grandfathered to certain firms, so if those firms wanted to pollute they could just hold on to their permits. But also, right now the permits are pretty cheap, probably way below what firms would be willing to pay for them. so driving up the price of permits would get you closer to the price point at which firms would "feel the squeeze", but that would take *a while*.
I think this also highlights how much easier/cleaner a carbon fee might be -- if you just make polluters pay a tax for the carbon they produce, there's none of this permit business.