Question

For each of the following scenarios, identify which government policy is likely to be most efficient and effective.

To increase the use of renewable energy sources and technologies, such as solar panels
To reduce sulfur dioxide emissions from power plants
To eliminate lead from gasoline
To reduce the volume of household waste going to landfills

a) Pigouvian Tax

b) Cap-and-trade allowances (permits)

c) Pigouvian Subsidy

d) Command and control regulation

Answer 1

(a) To increase the use of renewable energy sources and technologies, such as solar polar - Pigouvian Subsidy

(b) To reduce sulfur dioxide emissions from power plants - Cap and trade allowances (permits)

(c) To eliminate lead from gasoline - Command and control regulation

(d) To reduce the volume of household waste going to landfills -  Pigouvian Tax