One way of addressing a situation of a negative international externality would be for a multinational authority to:

Question

Quizplus · Accepted Answer

Taxing producers of the item creating the externality is the most effective way to internalize the negative externality by including the cost of the harm caused to others in the price of the item. This can encourage producers to use technologies or methods that are less harmful to the environment or public health. Subsidizing consumption or boosting demand for the item would only exacerbate the externality, while expanding production would not address the problem of the negative externality.

One Way of Addressing a Situation of a Negative International