I think it’s taxes which unlike pollution causes most prices to overestimate the marginal social cost of goods.
Hence the Pigouvian tax in which the taxes and the negative externalities cancel should each other out.
Or Coasian bargaining, which also may or may not work in practice.
I think it’s taxes which unlike pollution causes most prices to overestimate the marginal social cost of goods.
Hence the Pigouvian tax in which the taxes and the negative externalities cancel should each other out.
Or Coasian bargaining, which also may or may not work in practice.