Two Possible Approaches to Addressing Externatlities Essay

Better Essays

1. Hawken, Heal and others discuss the facts that the market doesn’t deal well with the differences between private and social costs (externalities). What are the two possible approaches to addressing externalities, illustrate by economics Pigou and Coarse? What are the policy implications of each?

The two possible approaches to addressing externalities explained by economists Pigou and Coarse are cost incorporation and bargaining.
Under Pigous approach, he discusses that creators of pollution did not bear the full costs of production of the environmental and damages they have produced. Pigou studied the inadequacies that came from the difference between social and private cost actions. Pigou’s externality suggested that the …show more content…

Briefly summarize the main points from each of these three authors, particularly in relation to the roles of government and business. What ideas do they have in common? What do you think about what they are saying?

The meaning of “Restoring the Guardian” is essentials to protect our environment and society, and not change to the desires of businesses.
Hawken suggest that the government has been taken over by commerce, and this is causing detrimental damages to the environment and societies. For instance, Libby folks were a prime example of the lack of government control. The ramifications were irreversible and many Folks passed away due to the lack of regulations. Commerce has taken over the role of government and dictated the system. The guardian and commerce need to work together in order to restore the environment and protect humanities.
“Jared Diamond’s argument that our attitude toward government may actually compromise the quality of life we all value”. What Diamond is suggesting is that when individuals are resisting the government’s involvement in executing laws on zoning boundaries, they are diminishing natural resource, destroying the environment, and harming natural habitats.
Porter believe in order to be “Green and Competitive”, there needs to be rules set in the amount of pollution that is created. He suggests when businesses find new innovated ways to minimize or annul

Get Access