Explain the term externality in an economic context in your own words.
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).
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).
Explain how negative externalities can contribute to a lack of sustainability?
Describe four externalities associated with carbon? Provide at least one example of a positive externality and at least one example of a negative externality.
Describe 2 additional situations where it might make sense to use a Pigouvian tax.
Describe 3 challenges associated with implementing a Pigouvian tax. Consider criticisms of Pigouvian taxes that you came across in the readings.
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?
Choose a carbon tax rate that you feel is appropriate (in dollars per ton) and justify that value.
Describe two alternatives to a carbon tax for mitigating the impacts of externalities associated with carbon. Explain why you think these options could be effective?
