Unit 2.8 · Market Failure: Externalities and Common Pool Resources
Government Responses to Externalities
AO2AO4Diagram required
Syllabus Requirement
Includes Pigouvian taxes, carbon taxes, legislation, subsidies, public provision, tradable permits, education, and international agreements.
Assessment Objectives
AO2Application and Analysis
AO4Use of Appropriate Skills
Summary
This topic discusses how governments can intervene to address externalities and common pool resources through various methods. Understanding these interventions is important for analyzing how they can lead to more efficient market outcomes and reduce negative impacts on society.