Final answer:
A production technology that minimizes pollution is known as abatement technology, with pollution taxes incentivizing firms to seek cost-effective pollution-control methods or face the tax as a penalty.
Step-by-step explanation:
A production technology that reduces or prevents pollution is commonly referred to as abatement technology. To address pollution, there are various strategies, including direct government action to preserve environments and clean waterways, as well as using cost-benefit analysis to evaluate different approaches. However, a notable method of incentivizing firms to reduce pollution is by imposing a pollution tax, which encourages the adoption of effective pollution-control measures.
Firms with access to cheaper pollution reduction methods will utilize these to minimize taxes, while those facing higher costs may choose to pay the tax instead. This ensures that reductions of pollution will occur where it is most cost-effective, without creating unfair advantages or loopholes. Additionally, providing modern pollution-control technology to lower-income countries can also play a role in global pollution reduction efforts.