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Friday, April 5, 2013

Internalizing Externalities

The only sure way to ensure sustainable economic growth, which does not occur at the expense of the surround, is to pass the be of repairing any environmental damage on to those who ar responsible. Asides from preventing our environment from slipping into an irreparable state, this solution presents benefits to consumer, producer and government alike. As goods that are environmentally friendly will be accompany cheaper than those that are not demand for them will increase, while demand for those that are not will decrease. Since there will be less(prenominal) environmental damage to clean up, governments can pass many this money back to the public by reducing taxes. Its a known fact that the market mechanism is by c venerable the most efficient manner through which to distribute goods, function and money - far more efficient than government beaucracy would ever be. Perhaps most importantly it is the right thing to do. shortly we develop and prosper at the expense of the environment ? and that, obviously, cannot go on forever. One of the oddest aspects of government policy is the massive subsidies granted by governments to harmful industries. For example, in the US National woodwind instrument of Tongrass , Alaska the US Forest Service sells 500 year old trees to be pulped, and then made into throwaway nylon stockings.

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Promoting this ?vital industry the USFS spent $ 389 million building roads and providing other logging home to the logging companies. However, it only made$ 32 million forth it ? less than $ 2 dollars per 500 year-old tree. Already today the go of environmentally friendly goods is gaining momentum. For example, in the US the organic agriculture industry has grown tremendously in the last several(prenominal) years. However, environmentally friendly goods, such as organic foodstuffs, come at a premium. If, however, once were to way...

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