Published Online:October 2025
Product Name:The IUP Journal of Law Review
Product Type:Article
Product Code:IUPLR031025
DOI:DOI: 10.71329/IUPLR/2025.15.4.30-44
Author Name:Laasya Adury and Rupak Das
Availability:YES
Subject/Domain:Law
Download Format:PDF
Pages:30-44
Environmental degradation is one of the core problems plaguing the global community, and studies have proposed various ways to combat it and mitigate its effects on people. In this backdrop, this paper explores the role of environmental taxation as a Pigouvian policy tool in addressing environmental degradation. It provides the Indian context for environmental degradation and highlights the need for economic policy as a corrective tool. As theorized by Arthur Pigou, environmental taxes aim to internalize negative externalities by recovering the social cost of pollution. Through detailed research, the paper examines the theoretical foundation of Pigouvian taxation, with real-world case studies from around the world. The paper critically assesses the effectiveness and application of these taxes to understand whether they remain only de jure. It also studies who benefits from the taxes and who ultimately bears the burden, especially when the costs are passed on to the consumers. The paper offers recommendations and concludes by highlighting the potential of such taxation to address environmental damage and promote sustainability.
The United Nations (UN) defines environmental degradation as the decline of the environment’s ability to meet social and ecological needs. Such deterioration of the natural environment is a result of biodiversity loss, ecosystem destruction, and the depletion of essential natural resources like clean air, water, and soil.