Read the article https://enviroliteracy.org/environment-society/economics/extern

Question

Read the article

https://enviroliteracy.org/environment-society/economics/externalities/

and watch the two videos

https://www.youtube.com/watch?v=6RhYY_4Wzls

https://www.youtube.com/watch?v=gjI5EZKzwI4

Imagine that we were to use policy to internalize all the external costs of gasoline (pollution, health risks, climate change, impacts from oil drilling and transport, etc.) and that as a result, gas prices rise to $13 per gallon. What effects do you think this would have on the choices we make as consumers (such as driving behavior and types of vehicles purchased)? What influence might it have on the types of vehicles produced and the types of energy sources developed? In the long run, do you think that internalizing external costs in this way would end up costing society more money or saving society money?

Please answer the following question in two well thought-out paragraphs.

Explanation / Answer

If the cost occured because of degrading environment, health of living organism, damages caused due to high concentration of pollutant gas in the atmosphere and thus its conversion into acid rain is added into gas prices then this will surely shift people inclement towards more greener sources of energy irrespective of their high cost becasue the overall cost (which includes the above mentioned cost to environment) would be less than the conventional gas price. Even if they the shifting is not entirely towards new greener resources then also automobile companies will go for some modification in their vechicle which will make these vechicles more energy efficient and thus decreasing the cost per mile.

Internalizing external costs in the above mentioned way will surely save society's money as people will go for sustainable utilization of energy resources which will save government cost in implementiong various methods to reduce pollution and thus the taxes occurred by citizens would be less thus saving society's money in general.

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