The Environment Ministry in Japan Proposed a New Carbon Tax

The Environment Ministry in Japan proposed a new carbon tax to meet Japan's obligations to reduce carbon dioxide emissions under the Kyoto Treaty. The tax would be levied on producers and importers of fossil fuels and raise the cost of using fossil fuels. How do most economists view a tax such as this?

A) They prefer direct regulation to taxes because taxes create deadweight loss.
B) They prefer voluntary programs to taxes because they reduce the role of compulsion.
C) They do not believe any government intervention is necessary because the invisible hand of the market will correct the problem.
D) They support taxes on pollution as a way of prompting decision makers to consider all costs.