Taxes on polluting firms have
A)can easily be avoided and are therefore, unsuccessful.
B)been successful in reducing water pollution in the Ruhr River basin in Germany.
C)more advantageous over voluntarism and direct controls.
D)not been used in the United States.

Question

Quizplus · Accepted Answer

Taxes on polluting firms have been successful in reducing water pollution in the Ruhr River basin in Germany. This is an example of how taxes on polluting firms can incentivize them to reduce pollution by internalizing the cost of pollution. Avoidance may still be possible, but it is not a guarantee, and the effectiveness of the tax largely depends on its design and enforcement. Taxes can be more advantageous than voluntarism and direct controls in some cases, as they are a market-based solution that allows the polluting firms to choose their own abatement strategy while paying for their pollution. Taxes on polluting firms have also been used in the United States, such as the Superfund tax on hazardous waste sites.

Taxes on Polluting Firms Have