因为手头有更多的钱，增加项目投资的机会很大。然而，对污染征税可以被认为是一个棘手的立法和行政问题，涉及两个不同的政策制定者，即财政管理者和环境监管者(Foulger, 2009)。已经确定的是，排放贸易可以被认为是灵活和薄弱的机制。Metcalf(1999)认为，在计算税收价值与污染相关的社会损害相等的点时存在困难。环境税的递减已经被认定为穷人，因为与富裕人口相比，他们缴纳的税收不成比例，因此，有必要处理整个经济中的污染问题(Tietenberg & Lewis, 2000)。
The terminology of economics helps in the enhancement of pollution at a number of different resources such as water, land and air. Negative externalities based on land such as visual pollution, noise pollution, light pollution, radioactive pollution and transportation pollution, result in triggering water and air pollution. In the similar sense, externalities based on chemical pollution, air transport pollution, noise pollution and industrial pollution while promoting land as well as water pollution (Foulger, 2009). The link of connectivity, across several sources of pollution along with their impact resulted in the indication of a balanced combination of economic policies and reforms for the reduction of pollution.
In this context, taxes based on pollution can be considered as a potentially powerful tool for the management of environment. It had been argued by Wallace E. Oates (1995) that the base of tax should be the act of pollution itself, not any activity related to it, as there is an imposition of tax on emissions of waste while producing several goods raising the price of output services and goods (Agyeman, 2003). This involves the appreciation of hypothesis with double dividend in the taxation of environment. There can be suspecting of assurance related to gains of welfare in the cycle of revenue.
Considering the figure above, it depicts the urban population of EU nations in exposure towards air pollution at harmful levels. As stated in the figure, one third of the European population that live in cities are in exposure to harmful levels of air pollutant that exceed the quality standards of air across EU nations. Also, approximately 90 per cent of the European population that live in cities are in exposure to harmful levels of air pollutants that can be seen to damage the health of humans, as compared to the stringent guidelines of World Health Organization. Hence, it can be stated that the issue of pollution has huge prominence across the nation requiring strict standards to eliminate sources of pollutants in industrial activities.
There can be major chances for increasing the investment of project because of more money in hand. However, taxation of pollution can be considered a tricky issue of legislation and administration, where there is an involvement of two different makers of policy, namely, fiscal managers and environmental regulators (Foulger, 2009). It has been identified that trade of emissions can be considered as flexible and weak mechanisms. It has been accepted by Metcalf (1999) that there is a difficulty in calculation of point in which the value of tax is equal to social damage related to the pollution. Regressive of environmental taxes have been identified as poor for the payment of disproportionate taxes in relation with rich population, and hence, there is a significant need of dealing with the issue of pollution across the economy (Tietenberg & Lewis, 2000).