There is concern that California’s cap-and-trade system for greenhouse gases, implemented in 2012, has led to “hot spots” of pollution—localized areas with very high concentrations of hazardous pollutants such as air toxics and particulate matter. A recent study by Cushing et al. (2018) showed that socioeconomically disadvantaged communities have been disproportionately exposed to these air pollutants under California’s cap-and-trade program. This has happened despite the fact that overall greenhouse gas emissions and exposure to pollutants in the state have been reduced significantly under the program. How might a cap-and-trade system lead to such “hot spots”? Are these “hot spots” necessarily a bad thing from an overall social welfare perspective? Explain.