Which of the following is true regarding tradable pollution permits and Pigouvian taxes ?

• A. All of these answers are true
• B. Pigouvian taxes and tradable pollution permits create an efficient market for pollution.
• C. Tradable pollution permits efficiently reduce pollution only if they are initially distributed to the firms that can regulator pollution at the lowest
• D. To set the quantity of pollution with tradable pollution permits, the regulator must know everything about the demand for pollution rights.
• E. Pigovian taxes are more likely to reduce pollution to a targeted amount than tradable pollution permits.