Answer the questions and discuss it. You may cite references if needed.

Government pursue various policies to remedy the inefficiencies caused by externalities. Sometimes, the government prevents inefficient activity by regulating behavior. Other times, it internalizes an externality using corrective taxes. Another public policy is to issue permits. For example, the government could protect the environment by issuing a limited number of pollutions permit.

Give an example of a negative externality that could be solved or mitigated by any of these policies and explain why such policy is effective in deadline with such negative externality. Share you insights, and discuss your answer long.