Are Pigovian Taxes the “Answer” to Environmental Problems?
Posted in Environment, Market Failures on Jun 6th, 2011
All environmental problems arise from the existence of “externalities.” Many of the common worries about water quality, air quality, etc. result from negative externalities – value producing activities generating costs on unwilling third parties. Some worries are also the result of positive externalities – because free-riding is difficult to prevent for certain classes of goods. […]
