Please answer all parts in detail. Thank you!

Question 4. Incentive Based Policy for Market Failure - Transferable discharge permits Marginal Abatement Costs The marginal abatement costs for reducing Emissions Source A Source B emissions for two sources appears in the table (tons below. Each is currently emitting 12 tons so that 12 total emissions are 24 tons. Please show your 11 IN work for any calculations. (***Note on interpreting 10 4 12 table: for source A, abating the first unit --to go from 12 6 18 o 1 1 tons emitted -- costs 2.) 8 24 -NWACO- 10 30 12 36 a. For A and B, calculate the TAC (total 14 42 abatement costs) for a uniform standard, i.e. 16 48 equal percentage (equiproportional) cutback, 54 to 16 total tons emitted. Emissions are 60 abated so that Emissions, + Emissions; = 16. 22 66 24 72 Suppose the regulator uses a tradable permit policy. Each source is given 8 permits for free and permit trade is available. After trade (if any), how many tons are emitted from A and B? EmissionsA: Emissions B: C. Suppose the price paid for each permit exchanged between A & B is equal to the MAC of the final unit abated. What is the total cost of compliance (total abatement cost + total permit cost) for A and for B? TCCA = TCCB = d. How does the total cost of compliance overall (TCC = TCC, + TCC:) under this cap and trade approach compare to the total cost of compliance under a uniform standard for achieving the same aggregate pollution level? State in percentage terms