We are all affected by externalities. Environmentalists would love to see any ty
ID: 1091559 • Letter: W
Question
We are all affected by externalities. Environmentalists would love to see any type of pollution banned completely. Do you agree with them? Or do you side with most economists, who argue that some pollution is better for society than none at all. To take this one step further, Phil Knight, as well as many others, has major production/manufacturing facilities located in some of the poorest regions of the world. Ever wonder why? Have you ever bought a NIKE article? Would you again and what do you say to those who disagree with you? Explain your answer carefully.
Explanation / Answer
Some pollution is in fact necessary for the development of the economy. There should exist a particular level of pollution where the production process continues without affecting the health of the economy. Protecting our environment does not have to put an end to economic progress. Free markets in permits to pollute, like free markets for other resources, can ensure that pollution is controlled at the lowest cost possible.
There are production and manufacturing facilities located in some of the poorest regions of the world. Pollution is necessary seeing as all fuel burnt must be converted into energy and other substances.
Thus, zero pollution level is not desirable for the economy.
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