Preference 1. Tax is just as effective as a regulation in reducing the overall level of pollution. The higher the tax, the larger the reduction in pollution Tax reduces pollution more efficiently. It places a price on the right to pollute, which allocates pollution to those factories that face the highest cost of reducing it 3. Tax is better for the environment. Under the command-and control policy of regulation, the factories have no reason to reduce emission further. By contrast, tax gives the factories an incentive to develop cleaner technologies, because it would reduce the amount of tax the factory has to pay 4. Conclusion: Unlike other taxes, e.g. income tax, distort incentives and move the allocation of resources away from the social optimum Tax raises revenue for the government, also enhance economic efficiency, the bystanders who are affected are also be caredPreference 1. Tax is just as effective as a regulation in reducing the overall level of pollution. The higher the tax, the larger the reduction in pollution. 2. Tax reduces pollution more efficiently. It places a price on the right to pollute, which allocates pollution to those factories that face the highest cost of reducing it. 3. Tax is better for the environment. Under the command-and￾control policy of regulation, the factories have no reason to reduce emission further. By contrast, tax gives the factories an incentive to develop cleaner technologies, because it would reduce the amount of tax the factory has to pay. 4. Conclusion: Unlike other taxes, e.g. income tax, distort incentives and move the allocation of resources away from the social optimum. Tax raises revenue for the government, also enhance economic efficiency, the bystanders who are affected are also be cared