Which of the following are TRUE about environmental taxes: 1. they are a type of incentive based regulation for pollution control
2. they are a type of command and control regulation for pollution control
3. they are designed to be equal to the external cost of pollution

Question

Quizplus · Accepted Answer

Environmental taxes are indeed a form of incentive-based regulation, as they encourage firms and individuals to reduce pollution by making it costly, rather than directly commanding them to do so. They are designed to internalize the external costs of pollution, thereby aligning private costs with social costs.

Which of the Following Are TRUE About Environmental Taxes: 1