Question

[4] Explain why it would not be desirable (from the point of view of economic efficiency) to eliminate all emissions of sulfur dioxide from electric power plants. Now suggest a setting in which zero pollution might be efficient

Answer 1

SOLUTION

WHY IT IS NOT DESIRABLE IN ELIMINATING THE EMISSIONS OF SULFUR DIOXIDE FROM ELECTRIC POWER PLANTS

Most marketable goods are produced by the manufacturing sector. Industry is no doubt, one of the main contributors of the economic growth and its products are the bases of today's lifestyles. The extraction of raw materials from natural resources is a part of a transformation process where industries introduces both the final products and the pollution to the society. The proportion of value added from manufacturing to the gross domestic product varied from 8.6 % in low income countries to 20.8 % in the middle high income countries.

Now withstanding the trend described, the negative effects of industrial activity on the environment which once where perceived exclusively as a local pollution problem, today are widely debated in the public policy aiming not only to prevent the environment but also to mitigate and adapt to the climatic change produced by greenhouse gases. Overall emissions from the sulfur dioxide from the electric power plants are higher in low income than in high income countries.

Chemical imbalances on the other hand create pollution in the form of nitrogen dioxide and sulfur dioxide which in turn produces acid rain which also creates a cyclic behaviour of pollution and economic growth.

ZERO POLLUTION BEING EFFICIENT

If economic considerations were not taken into account the socially optimal level of pollution would be zero. This is because no pollution would represent no cost to the society. The best level of pollution is the level that existed before industry raised it. The environment naturally pollutes the level it needs to exist