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Slovenia emits on average 150 tons of CO 2 emissions per year. The marginal abatement cost function for Slovenia is given by: MC = 10
Slovenia emits on average 150 tons of CO 2 emissions per year. The marginal abatement cost function for Slovenia is given by: MC = 10 *A, where A represents the quantity (in tons) of CO 2 that is reduced (abatement level). When Slovenia entered the European Union (EU) in 2004, it had to comply with the EU environmental regulations, including its cap-and-trade program. Slovenia has received allowances in the amount of 90 tons of CO 2 , and any emission in excess of this cap must be covered through abatement efforts or purchases of pollution permits. 36. (4 points) What is the amount of CO 2 that Slovenia has to "clean-up" to comply with EU rules? What is the marginal cost paid by Slovenia to reduce CO 2 emissions by that amount
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