The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 19

A Tacoma, Washington, electrical utility purchased from a manufacturing firm, for $265,000, the right to add 60 tons of "particulate matter" to the air each year. The manufacturer had reduced its annual emissions by 69 tons a few years earlier through modernizing its plant. The representative of an environmental organization objected that the practice of selling rights to pollute simply meant that "as soon as one air polluter drops out of the ring, there will be a ready substitute."
(a) What benefits of the system does this criticism ignore?
(b) The utility used the credits to renovate and operate a generating plant that would burn garbage as well as other fuels, thus reducing solid-waste disposal problems. Is it better for the environment to bury or to incinerate garbage?