Pigouvian tax

plural Pigouvian taxes · alternative Pigovian tax

1. A tax on any market activity that generates negative externalities.

   Named after economist A.C. Pigou, a Pigouvian tax is a tax levied per unit of pollution emitted. Pigouvian taxes are meant to internalize ‘externalities’, generally understood to be positive or negative side-effects from economic production that are not reflected in the price of production.

   2016, Cinnamon P. Carlarne, Kevin R. Gray, Richard Tarasofsky, editors, The Oxford Handbook of International Climate Change Law, Oxford University Press, →ISBN