Suppose that there are two firms, each generating three tons of SO2. Suppose also that the government has set a target abatement level of two tons. Under a policy of uniform abatement with permits each firm would receive
To find out how many permits each firm would receive under a policy of uniform abatement, we need to divide the total abatement target by the number of firms.
In this case, the total abatement target is two tons and there are two firms. So, we divide 2 tons by 2 firms which gives us 1 permit per firm.
Therefore, under a policy of uniform abatement with permits, each firm would receive 1 permit.