How do government subsidies aimed at promoting positive externalities of private goods impact social costs in an economy?

Government subsidies are financial support provided by the government to encourage certain activities or behaviors that create positive externalities, which are benefits enjoyed by others who do not directly pay for them. When the government gives money to businesses or individuals to promote these activities, it helps lower the costs for them, making it more likely they will produce goods or services that benefit society. For example, if the government subsidizes solar energy, it makes solar panels cheaper, encouraging more people to use renewable energy, which reduces pollution and helps the environment. This increase in positive actions can lead to a decrease in social costs, such as healthcare costs related to pollution, because more people are benefiting from cleaner air and a healthier planet. Overall, subsidies can help align private interests with social good, leading to a more efficient and beneficial economy.