A tax imposed on polluters to give them an incentive to make an efficient reduction in pollution is called a Clarke tax.

Name: A tax imposed on polluters to give them an incentive to make an efficient reduction in pollution is called a Clarke tax.
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A tax imposed on polluters to provide an incentive to reduce pollution is called a Pigouvian tax or a tax on negative externalities. The Clarke tax is a type of subsidy given to a polluter to reduce the pollution they generate.

A Tax Imposed on Polluters to Give Them an Incentive