Pollution taxes are a sound environmental instrument. The principal means of controlling pollution in the United States is by command and control regulation, setting standards or limits on emissions and requiring particular pollution control technologies. Command and control regulation of pollution, while necessary to assure pollution reductions, has its limits. While much more certain of reducing pollution than pollution taxes would be, controls tend to be set only at levels that are politically acceptable. Seldom are the full social costs of pollution eliminated in pollution control standards, except where particularly noxious products are banned outright, such as the prohibitions against use of asbestos, DDT and lead in gasoline in the United States. Furthermore, when standards are adopted, there is no incentive provided for emitters to exceed those standards or to develop better pollution control technologies.
Richard L. Ottinger & William B. Moore, The Case for State Pollution Taxes, 12 Pace Envtl. L. Rev. 103 (1994), http://digitalcommons.pace.edu/lawfaculty/257/.