The world is on its last legs. Approximately 5.2 trillion plastic particles are currently floating in the world's oceans, and human activities emit 24,126.1 million tons of CO2 each year. Many people have been involved in climate action, participated in environmental service initiatives, and raised awareness through digital platforms as a response to this global concern, but what can be done by the government?

A government is in charge of all aspects of a country, including law, economy, and people. As a result, even tiny government decisions can have a significant impact on a country's well-being. When it comes to environmental deterioration, governments can use a variety of economic incentives, which can be broadly classified as taxes and subsidies imposed on producers and consumers.

Governments can first impose taxes on producers. This reduces pollution emissions and the use of nonrenewable resources by motivating producers to employ environmentally favorable alternatives. Taxing consumers is a second economic policy that governments can apply. When the government imposes a tax on the consumption of a particular commodity, customers' motivation to use it is immediately reduced.

One example of an environmental tax on consumers is the plastic bag tax. Though currently utilized by many nations, when Ireland implemented legislation to tax plastic bags in 2002, the country witnessed a 90-95% reduction in plastic bag use. As seen in the graph below, Ireland saw an immediate decline in the number of plastic bags compiled as litter. 

Source: Institute for European Environmental Policy

Finally, governments can subsidize producers to encourage output and support sustainable development projects. Governments can also subsidize consumers to use eco-friendly products. Such subsidies can commonly be implemented in the form of direct grants from the government or reductions in pre-existing taxes.
 

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