What is the economic rationale for imposing a pollution tax?

Correct answer: Including the social cost of pollution in the producer's decision

Pollution often creates costs for people and ecosystems that are absent from the producer’s private calculation. A pollution tax raises the cost of emitting and encourages firms to reduce emissions, adopt cleaner technology or change production methods. It does not necessarily stop all production. Therefore, A correctly describes internalising the social cost and correcting a negative externality.