In a Situation Where There Is No Incentive to Cut

Multiple Choice

In a situation where there is no incentive to cut pollution because it will make domestic firms less competitive, world welfare will improve if:

A) nations impose tariffs on polluters.
B) there is an international agreement so that every nation regulates global pollutants and no firms have competitive advantages because of lax pollution laws.
C) there is a ban on production until we can scientifically solve our pollution problems.
D) we allow the market to work in this case.