Which of the following may be classified as a 'Pigouvian tax'?

Options

A. Long term capital gain tax
B. Corporate tax
C. Carbon tax
D. Income tax

Answer

C

Explanation

A Pigovian tax is a tax on any market activity that generates negative impacts on the environment or society. The tax is intended to correct an undesirable or inefficient market outcome. A carbon tax is a tax levied on the carbon content of goods and services.