Why Are Pigovian Taxes Preferred to Regulatory Policies as Methods

question 114

Essay

Why are Pigovian taxes preferred to regulatory policies as methods to remedy negative externalities?

---

Definitions:

Exculpatory Clause

A contract provision that releases one party from liability for their wrongful acts to the other party.

Tort Liability

A legal responsibility arising from civil wrongs not based on contractual obligations, causing harm or loss to another person or entity, leading to potential compensation for damages.

Public Policy

Principles and standards considered by a government to be beneficial for the community and used as a guide for the development of laws.

Substantive Unconscionability

A legal principle in contract law that allows courts to refuse to enforce a contract or clause deemed grossly unfair or one-sided.