Final answer:
The United States began taxing pollutant emissions in 1990 through the Clean Air Act Amendments, which targeted sulfur dioxide to reduce acid rain via a cap-and-trade system.
Step-by-step explanation:
In 1990, the United States began taxing a polluting substance as part of its environmental regulations. While the question does not clearly specify which particular pollutant was taxed, one notable environmental legislation from that period is the 1990 Clean Air Act Amendments, which established a regulatory mechanism involving the trade of emissions permits, sometimes referred to as a 'cap-and-trade' system for sulfur dioxide (SO2).
This market-based approach aimed to reduce acid rain by limiting the amount of SO2 that could be emitted by power plants, effectively putting a price on pollution and incenting companies to lower their emissions. The economics of pollution control can involve different types of regulation. 'Command-and-control' regulation typically involves setting specific limits on emissions and requiring certain technologies to be installed to reduce pollution, while 'market incentive-based' policies, such as taxes or tradeable permits, financially motivate firms to reduce their environmental impact.
The emissions tax on the quantity of carbon emitted by each firm is an example of the latter approach, leveraging economic incentives to drive environmental protection efforts.