Consider the diagram below. Suppose the polluter changes inputs in production so the emissions cause less damage (the MD curve rotates down). If the polluter has property rights and the pollutee is offering $x per unit change in emissions, then the polluter will agree to a higher emission level when the MD curve changes. MD1 MD & MAC EConsider the diagram below. Suppose the polluter changes inputs in production so the emissions cause less damage (the MD curve rotates down). If the polluter has property rights and the pollutee is offering $x per unit change in emissions, then the polluter will agree to a higher emission level when the MD curve changes. MD1 MD & MAC E