Question

An environmental study conducted in a particular city suggests that if a chemical plant emits more than 60 million tons of chemicals each year, the water supply will become contaminated beyond the point where filtration techniques can make it safe for drinking.
If this is all the information the government has, which solution to reduce pollution is appropriate?

Answer 1

Options:___Corrective taxes

___Tradable permits.

Answer: Corrective taxes

Explanation: Corrective taxes are taxes imposed by Governor on private business organisations in order to compensate for the social impact of their activities. The social impact of some of their activities can be termed as Externalities which are the uncompensated impact of one person's or an organisation's actions on the well-being of a bystanders or society like the case of the Chemical pollution on the water bodies.

Corrective taxes will cause the Organisation causing the pollution to either review and improve its process or change to better business or product.