two firms will adjust their abatement activity. What is the
total amount of emissions abatement, and what is each
firm’s MC of abatement?
e. With the emissions tax in place, what is the total
combined cost of the emissions abatement?
f. If you were advising the government, which pollution-
reduction policy would you recommend, and why?
18. The following identity shows the three essential components of
the world’s annual emissions of greenhouse gases:
a. Suppose that in 2019, greenhouse gases emitted per unit
of energy consumed decreased by 3 percent, energy use
per unit of GDP decreased by 2 percent, and world GDP
increased by 4 percent. What would be the approximate
change in greenhouse-gas emissions in 2019?
b. Suppose that in 2020, greenhouse gases emitted per unit
of energy consumed decreased by 5 percent, energy use
per unit of GDP decreased by 5 percent, and world GDP
increased by 3 percent. What would be the approximate
change in greenhouse-gas emissions in 2020?
c. Suppose that in 2021, greenhouse gases emitted per unit
of energy consumed was unchanged, energy use per unit
of GDP was unchanged, and world GDP increased by 4GHG= EnergyGHG ×EnergyGDP ×GDP