This solution provides the market with theoretically 9  correct incentives (even if the tax or subsidy is only an approximation, not always easy to compute, of the effect of the activity in question on well-being), and then lets it produce the good in the most efficient way. The carbon pricing that is under discussion nowadays falls into this category.
Problems arise here too in the case of a global common good, since not all countries are willing to introduce the same measures (taxes, for example). The third solution is to establish rules, such as on anti-emissions standards. This is clearly a direct and potentially effective approach, but the inevitable inflexibility of laws may create inefficiency.