Suppose the Commonwealth government imposed a standard that

Suppose the Commonwealth government imposed a standard that required all polluters to reduce their carbon dioxide emissions by 30% from their current level. Describe three problems with this policy.

Solution

The three problems with this policy

1) One of the main problems with this policy is that the marginal costs and the total costs for reducing the emissions for such a huge amount will greatly increase with which the overall production of the country decreases

2) Also with the decrease in supply, the price also increases and this can reduce the demand for the product in the other countries and this can reduce the exports which can adversely affect the GDP all in all.

3) The increase in costs can design motivate the investors to start the production activities in the common wealth country where the flow of capital ceases and this can result in the downfall of the economies all in all.