The Coase Theorem states that the private sector can achieve environmental efficiency, as long as property rights are clearly assigned.

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The Coase Theorem asserts that if property rights are well-defined and there are no transaction costs, economic agents will arrive at efficient solutions to externalities such as pollution through private bargaining, regardless of the initial assignment of property rights. As a result, the private sector can achieve environmental efficiency if there are clear property rights.

The Coase Theorem States That the Private Sector Can Achieve