Both corrective taxes and tradable pollution permits reduce the cost of environmental protection and thus should increase the public's demand for a clean environment. b. Both corrective taxes and tradable pollution permits provide market-based incentives for firms to reduce pollution. c. Tradable pollution permits have an advantage over corrective taxes if the government is uncertain as to the optimal size of the tax necessary to reduce pollution to a specific level. d. Corrective taxes set the maximum quantity of pollution, whereas tradable pollution permits fix the price of pollution.

d. Corrective taxes set the maximum quantity of pollution, whereas tradable pollution permits fix the price of pollution.

Explanation:

The government applied the alternatives for the policy in order to control the pollution problem

here following two vital policy alternatives i.e.

1. Corrective taxes

2. Permits of Tradable pollution

The corrective taxes impose the per unit tax with regard to the pollution i.e. emitted. Also it fixed the pollution price  

Here there is a permit of the tradable pollution that could set the pollution limit i.e. maximum. On the other hand, the firm could emit the pollution till the quantity mentioned by the permit of the tradable permit  

So, the option d should be considered

lives by a moral and ethical code

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