There are a number of policies that governments could use to reduce
the external costs and inefficiency associated with production. These
include regulation, taxation, the use of tradable pollution permits, and
the extension of property rights.
Each of these policies has its strengths and weaknesses – however,
most economists would argue that the best policy is one which would
internalise the externality and make the polluter pay the full social cost
of production.
marlinbito answered the question on July 8, 2018 at 18:53
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