What is the role of government in addressing environmental externalities?

Economics Environmental Externalities Questions



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What is the role of government in addressing environmental externalities?

The role of government in addressing environmental externalities is to regulate and mitigate the negative impacts of economic activities on the environment. This can be done through the implementation of policies, regulations, and incentives that encourage businesses and individuals to internalize the costs of their actions on the environment. Governments can also promote sustainable practices, invest in research and development of clean technologies, and enforce penalties for non-compliance with environmental standards. Additionally, governments can play a role in raising awareness and educating the public about the importance of environmental conservation and the consequences of externalities.