In both panels, MB_A shows the marginal benefit of pollution to plant A and MB_B shows the marginal benefit of pollution to plant B. In the absence of government intervention, each plant would emit 600 units. However, the cost of reducing emissions is lower for plant A, as shown by the fact that MB_A lies below MB_B. Panel (a) shows the result of an environmental standard that requires both plants to cut emissions in half; this is inefficient, because it leaves the marginal benefit of pollution higher for plant B than for plant A. Panel (b) shows that an emissions tax as well as a system of tradable permits achieves the same quantity of overall pollution efficiently. Faced with either an emissions tax of $200 per unit, or a market price of a permit of $200 per unit, each plant reduces pollution to the point where its marginal benefit is $200.