6 The efficient use of air and water resources is particularly troublesome for the market because it is often impossible to apportion these resources and determine ownership rights.

A system of emission charges (a pollution tax) is capable of inducing individuals to make wiser use of these resources. Emission charges

(a) increase the cost of producing pollution-intensive goods,

(b) grant firms an incentive to use methods of production that create less pollution, and

(c) provide producers with an incentive to adopt control devices when it is economical to do so.