What is the implicit cost of a ton of greenhouse gas

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A large electric utility company releases 60 million tons of greenhouse gases (mostly carbon dioxide) into the environment each year. This company has committed to spending $1 billion in capital over the next five years to reduce its annual emissions by 5%. More will be spend after five years to reduce greenhouses gases emissions further. (a) What is the implicit cost of a ton of a greenhouse gas? (b) If the United States produces 3 billion tons of greenhouse gases per year, how much capital must be spent to reduce total emissions by 2% over the next five years based on your answer in part (a)?

Reference no: EM131228516

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