Question

Questions to Answer:

1. Explain the term externality in an economic context in your own words. 
2. Provide an example of a positive externality which does not involve carbon. It should be well thought out and provide enough detail for the reader to fully understand your example (2-3 sentences). 
3. Provide an example of a negative externality which does not involve carbon. It should be well thought out and provide enough detail for the reader to fully understand your example (2-3 sentences). 
4. Explain how negative externalities can contribute to a lack of sustainability? 
5. Describe four externalities associated with carbon? Provide at least one example of a positive externality and at least one example of a negative externality.  
6. Describe 2 additional situations where it might make sense to use a Pigouvian tax. 
7. Describe 3 challenges associated with implementing a Pigouvian tax. Consider criticisms of Pigouvian taxes that you came across in the readings. 
8. Explain whether or not you think that a Pigouvian carbon tax is a good option for internalizing externalities associated with carbon. Consider economic, social and environmental factors.  Are you in favor of a Pigouvian tax in other situations?  
9. Choose a carbon tax rate that you feel is appropriate (in dollars per ton) and justify that value. 

4 months ago

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