Final answer:
A tax meant to counter the effect of a negative externality is known as a pollution charge or a pollution tax, intended to make firms responsible for the social costs of pollution they create.
Step-by-step explanation:
A tax meant to counter the effect of a negative externality is typically known as a pollution charge or a pollution tax. This type of tax is imposed on the quantity of pollution that a firm emits and is designed to incentivize companies to reduce their environmental impact. For example, when a firm's activities, such as the production of electricity by a power plant, result in pollution, that pollution is a negative externality impacting third parties not involved in the transaction. Without government intervention, like a pollution tax, the social costs of pollution are borne by everyone, not just the producer or buyer of the good or service causing the pollution. This tax policy encourages firms to internalize the external costs and helps align private costs with social costs. Hence, an optimal level of production and pollution that reflects the true cost to society can be achieved.