This is a general (desirable) feature of insurance, operating in effect like a Pigouvian tax
in internalizing an otherwise overlooked cost, helping to make an informed cost-benefit calculation in choosing locations.
They find that to correct the substantial accident externalities, a Pigouvian tax
could raise over $220 billion per year nationally.
This is because the incentives to develop second-generation biofuels are inefficiency low under the LCFS regime, because the implicit price on carbon is lower than that corresponding to the optimal Pigouvian tax
This would be the clearest example of Pigouvian tax
because it builds a relatively tight feedback loop.
Some countries have, however, implemented Pigouvian tax
regimes to curb the emissions of climate gases.
The Pigouvian tax
solution to a pollution externality places responsibility on the firm producing the pollution.
A Pigouvian tax
(t) can be derived where the marginal benefits of increased harvest equal the marginal cost (c + t) at the optimal season length (T) utilizing a Nash equilibrium game theory strategy where both the target species and bycatch species common-pool quotas could be binding:
27) Donatella Baiardi & Mario Menegatti, Pigouvian Tax
, Abatement Policies and Uncertainty on the Environment, 103 J.
Unfortunately, an optimal Pigouvian tax
on financial firms could
Such a tax, known as a Pigouvian tax
, would improve social welfare by reducing carbon emissions while creating no distortions in the economy.
the proper corrective device is a Pigouvian tax
equal to marginal social damage levied on the generator of the externality with no supplementary incentives for victims" at 23).
Since the user pays only his pmc, to achieve efficiency a per mile pigouvian tax
(A Pigouvian Tax
is a tax on "external activities" for example pollution or traffic congestion) equivalent to the second term on the right-hand-side of (3) should be levied on users.