What Is a Pigouvian Tax

question 58

Essay

What is a Pigouvian tax?

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Definitions:

Environmental Appraisal Costs

Expenses associated with assessing the environmental impact of a project or operation, including compliance with regulations.

Societal Costs

Expenses borne by society as a whole, resulting from business operations or economic policies, including environmental damage and health impacts.

Private Cost

Expenses borne by individuals or enterprises as a result of their own production or consumption decisions, not including externalities.

Contingent Environmental Costs

Costs that may occur depending on the outcome of a future event related to the environment, such as cleanup costs for pollution or fines for non-compliance with environmental regulations.