Pigouvian tax

A pigouvian tax is like when your mom tells you to clean up your toys because they're creating a mess in the house. The government does the same thing with companies that create pollution or damage the environment.

See, some companies don't care about the environment and might pollute the air, water, or soil while they're making money. This is bad for everyone because it can make people sick, harm animals, and damage the earth.

So, the government creates a pigouvian tax, which is a special fee that companies have to pay if they pollute too much. The tax is designed to make the companies think twice about causing damage and to encourage them to find ways to be more environmentally friendly.

For example, if a car company makes cars that use a lot of gas, the government might charge them a pigouvian tax to encourage them to make cars that use less gas, so they don't pollute as much.

Overall, the pigouvian tax helps keep our home- the planet cleaner, healthier and happier!