Final answer:
Pollution abatement costs are not considered a transaction cost incurred in the process of contracting to eliminate pollution externality. Other transaction costs include taxes on pollutants and gathering information on externalities.
Step-by-step explanation:
A pollution externality occurs when a firm's production of goods or services results in negative effects, such as pollution, on the well-being of others who are not compensated. In the process of contracting to eliminate pollution externalities, there are several transaction costs that can be incurred by the parties involved. However, one of the options provided is not considered a transaction cost in this context. The correct answer is pollution abatement costs. Pollution abatement costs refer to the costs associated with reducing pollution and are, in fact, one of the costs incurred to address the pollution externality. The other options, such as taxes on pollutants and gathering information on externalities, can be considered transaction costs in the process of contracting to eliminate pollution externality.