A large western state is about to implement a cap and trade program covering its two largest sources of 002 emissions, electricity (E) and autos (A) Initially, both sources have the same unconstrained emissions, LEE 2 15A 2 100. However, the industries have different abilities to remove carbon emissions from production, with the following total cost functions: TOE = 51"?5' TCA : 10in:l Where 7' is the amount of emissions reductions: S17! If the cap is set at 140, nd each industry's emissions (6) and the resulting permit price (3)). Calculate the total cost of the policy. Now imagine that the governor also wants to promote renewable energy, and enacts generous renewable energy subsidies for the electric power sector, equal to $200 per unit of emissions reduction from renewables. So the new total cost curve is 1'03 2 SHE 200mg; . If the cap remains at 140, recalculate each industries emissions and the resulting permit price. Recalculate the total {social} cost of the policy, including the renewable subsidy cost (ie use the total cost function from part A) Does the renewable subsidy increase, decrease or have no effect on the state's cost of meeting its COQ goals? What is the intuition for your answer? If the state had instead used a carbon tax, set at the permit price from part A, what effect would the renewable subsidy have had on total emissions? What is the intuition for this result