Liability laws are an effective way to incentivize efficient pollution solutions when

Question

Quizplus · Accepted Answer

Liability laws are most effective when relatively few parties are involved, causal linkages are clear, and damages are easy to measure because it is easier to determine who is responsible for the pollution, what harm has been done, and how much compensation should be paid. When all three factors are present, liability laws create strong incentives for polluters to adopt more efficient pollution control measures.

Liability Laws Are an Effective Way to Incentivize Efficient Pollution