Can Pigouvian Taxation Internalize the Social Cost of Platinum-Group Element Emissions?

Abstract

Here we discuss the suitability of a Pigouvian tax on platinum-group element (PGE) emissions. Based on Pigou’s theory, we develop a proposal for a viable and efficient tax to curb the negative effects of PGE emissions. The proposed emissions-impacting tax derives from an analysis of the fundamental rationale underlying Pigou’s theory of internalizing the social cost of environmental externalities. The results indicate that sustainability of PGE taxation depends on the capacity of the tax to internalize the external costs of pollution and to enhance transition to environment-friendly technologies.