Pollution credit

A pollution credit is a payment or incentive by a government to a private corporation (or another level of government) that encourages waste of raw materials, natural resources, energy, or results in pollution or other human health hazards. When payments are made directly by governments to polluters, this is called a dirty subsidy. However, many such incentives are hard to track, and not obvious subsidies. An example is the tax-paid support for road use by private automobiles and trucks, which usually does not include all health care costs of accidents nor smog.

Green economics often focuses on the impact of eliminating such subsidies, and implementing what is sometimes called full cost accounting although the notion of a "cost" is so political as to render this phrase almost meaningless. Green politics focuses on actually eliminating the subsidies by seeking change to agricultural policy and industrial policy, as well as tax, tariff and trade rules that favor imports from jurisdictions that offer such subsidies.

See also: accounting reform, Natural Capitalism