1.Theoretically, using a tax or subsidy instrument, such as the Emissions Reduction Fund (ERF) will Select one:

a. All of the above. b. be efficient as a subsidy rewards firms that increase emissions. c. not be equivalent as a tax provides the incentive to increase emissions above the tax rate. d. be the equivalent assuming the same transactions, monitoring and reporting costs.

2.Which of the following is not a method of allocating permits in an emission trading scheme? Select one: a. Sold at variable prices b. Free allocation c. Grandfathering d. Auctioning.

3.Which of the following is not a Kyoto mechanism? Select one: a. International emission trading b. Clean Development Mechanism c. Joint Implementation d. Mandatory Renewable Energy Reporting

4.Which of the following is a significant barrier to bilateral linking of an ETS? Select one: a. Compliance periods b. Rules governing new entrants and closures c. The provisions on banking permits d. The relative stringency of enforcement

5.What instrument can be used to link an ETS with a carbon tax? Select one: a. A harmonised price between the two schemes b. An emissions allowance c. A Certified Emission Reduction (CER) d. A tax credit that is tradable