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MODULE 5 · PART F.1 · VISUAL GUIDE · PNG

Cap-and-trade in action

With 100,000 allowances each, Kestrel emits 120,000 tonnes and needs 20,000 allowances; Lumen emits 80,000 and can sell or bank 20,000.

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Cap-and-trade in action
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With 100,000 allowances each, Kestrel emits 120,000 tonnes and needs 20,000 allowances; Lumen emits 80,000 and can sell or bank 20,000. At $40 each, Kestrel’s purchase costs $800,000. Compare the marginal cost of reducing emissions.

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