Producing steel is a highly polluting activity. The country of Greenwannabe has a large steel industry, which accounts for 80% of total emissions in Greenwannabe. The government is considering options to reduce these emissions. i. [4 points] Suppose firm A and firm B are identical. What are all the adequate policy options that the government can use to reduce emissions? Explain. ii. [4 points] How does the menu of options change if firms are in fact heterogeneous? Explain. iii. [4 points] Greenwannabe is a small, low-income country with a large level of government debt. As such, it has been prone in the past to severe recessions. What then is the best option for Greenwannabe to regulate emissions? Explain. iv. [4 points] Greenwannabe also has trouble with the calculations of emissions and is worried about setting the cap to the wrong amount if it opts for a cap-and-trade system. Why is it an issue if the cap is too high? What if it is too low? Explain. v. [4 points] Supposing that Greenwannabe is able to set an efficient cap, what is a way that the government can alleviate some of the burden of the cap on firms? Discuss