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in this video weamp;#39;re going to discuss cap and trade so cap and trade is a system of marketable permits that is used to address negative externalities so I want to give you a specific negative externality letamp;#39;s talk about pollution and in particular weamp;#39;ll talk about sulfur dioxide emissions so sulfur dioxide leads to acid rain and acid rain can kill fish and insects and so forth so letamp;#39;s say itamp;#39;s killing fish in a nearby stream and that there are people who fish in that stream and catch that fish and so now a cost has been imposed on them right so letamp;#39;s say that the factory that is producing electricity or whatever they are creating this sulfur dioxide with their production itamp;#39;s creating acid rain itamp;#39;s killing the fish and imposing costs on the people who do the fishing and so thatamp;#39;s the nature of the negative externality and so thereamp;#39;s going to be a market failure in that thereamp;#39;s going to be more sul
