Problem 2.

(carbon tax) A Maryland manufacturing business emits 100 tons of methane (CH4) per year. A carbon tax of $100 ton/C is introduced. As in problem 1, this tax was introduced on 31 Dec. 2020 and is retroactive, so the business must pay this tax for its 2020 emissions of methane.

Problem 2. (carbon tax) A Maryland manufacturing business emits 100 tons of methane (CH4) per year. A carbon tax of $100 ton/C is introduced. As in problem 1, this tax was introduced on 31 Dec. 2020 and is retroactive, so the business must pay this tax for its 2020 emissions of methane. A. How much tax will the business pay per ton of methane? B. How much will the business pay in carbon taxes for 2020? C. Since methane emissions are now taxed, for 2021 the business is considering abatement. Its marginal cost of abatement is MAC=B *a, where a denotes the tons abated and B=40$Iton abated. What is the optimal emissions level for the rm