A pollution- control policy that,in principle,can perfectly internalize pollution externalities is

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Quizplus · Accepted Answer

An emissions tax can perfectly internalize pollution externalities because it puts a price on pollution and gives firms an incentive to reduce their emissions. It also generates revenue for the government, which can be used to fund pollution-reducing initiatives. Emission limits, fines for exceeding a certain amount of pollution, and moral suasion are all imperfect ways to internalize externalities. None of these policies directly target the root cause of pollution, which is the lack of a price on emissions.

A Pollution- Control Policy That,in Principle,can Perfectly Internalize Pollution Externalities