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4.5. PRODUCT CHARGES

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Economic Incentives for Pollution Control


Product charges are imposed either on a product or some characteristic of that product. Products that are believed to have environmental disadvantages are taxed to reflect the added social costs they impose. Although some product charges may have a significant effect on behavior, most of them are intended primarily to raise revenue. Some product charges take the form of advance disposal fees (ADFs), or taxes on a product to fund its proper disposal after its use.


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