Pigovian tax

A Pigouvian tax (named after the economist Arthur Pigou) is a type of tax that's meant to fix a problem caused by something called a 'market failure', which might happen when people or businesses don't think about the effect their activities have on the environment or society. For example, companies might release pollutants into the air without thinking that it can hurt the environment. The Pigouvian tax is supposed to encourage those companies to be more responsible with what they do by making sure they pay a special tax if they don't follow the rules. This way, the government can use that tax money to pay for things like cleaning up the polluted air.