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The annual adverse effects of pollution are on the order of 10% of the world GDP. Many approaches are used or have been proposed to control the growing pollution problem, but none of them allows for efficient pollution control in settings in which the marginal cost of pollution is increasing and the polluters are better informed about the costs of abatement than regulators are. We propose a simple primary market mechanism that implements efficient pollution control and does not depend on how much information the regulators have about the abatement costs.
