What is an example of an environmental problem that would be best addressed by a “market-based” policy tool?

MD2

1. Briefly explain the advantages and limitations of the three major categories of environmental policy tools (single-source; multi-source; and tools that don’t directly limit pollution, or “market-based” tools) as presented by the authors of the Office of Technology Assessment (OTA) report in Table 1 (page 3).

2. What is an example of an environmental problem that would be best addressed by a “market-based” policy tool?