Environmental economics aims to find ways to achieve economic growth while minimizing negative impacts on the environment.

A pollution tax is a market-based policy instrument that charges polluters a fee for each unit of pollution they emit.

A cap-and-trade system aims to reduce the overall level of pollution, encourage innovation in pollution control technologies, and generate revenue for environmental protection programs.

A technology standard is a command-and-control regulation that requires polluters to use a specific type of pollution control technology.

Market-based policy instruments are more flexible, efficient, and effective than command-and-control regulations.

An industry-wide agreement to reduce pollution is an example of a voluntary agreement.

Voluntary agreements are less costly than command-and-control regulations.

Pollution, climate change, and loss of biodiversity are all examples of environmental externalities.

Market failures are the main cause of environmental externalities.

Pollution, climate change, and loss of biodiversity are all examples of market failures.

The main goal of environmental policy is to protect the environment, promote sustainable development, and improve human well-being.

Pollution tax, cap-and-trade system, technology standard, and voluntary agreement are all examples of environmental policy instruments.

Finding the right balance between economic growth and environmental protection, dealing with uncertainty, and addressing distributional impacts are all challenges in designing environmental policy instruments.

Higher prices for goods and services, job losses in polluting industries, and increased healthcare costs are all examples of distributional impacts of environmental policy.

The main goal of sustainable development is to meet the needs of the present without compromising the ability of future generations to meet their own needs.