A uniform tax according to the physical quantities of pollution may not be the appropriate way to correct for an externality because

Question

Quizplus · Accepted Answer

A uniform tax may not account for the full economic damages caused by pollution. Different pollutants have different impacts on the environment and society, and it may be necessary to impose higher taxes on pollutants that cause more damage. A uniform tax may also not take into account the location and timing of pollution, which can also affect the degree of harm caused. Therefore, a more targeted and flexible approach to pollution taxes may be needed to effectively address externalities.

A Uniform Tax According to the Physical Quantities of Pollution