In the 1970s in U.S. cities, air emissions were governed almost completely by prescriptive regulations. One of the problems faced by regulators in large urban areas with air quality well below desirable levels was how to let new polluters into the city without reducing air pollution. Regulators came up with an innovative approach called the offset system. New sources of pollution had to "convince" existing sources of emissions to reduce emissions. The overall effect of all these reductions had to at least offset the pollution additions by the new source.

Explain why or why not this so-called "offset system" is equivalent to a marketable permit system.