Dangerous Pollution

Rich Countries Drive Pollution in Poor Countries

The article "Rich Countries driving pollution in poor countries" addresses the issue of rich countries in the west, externalizing their pollution costs in third world countries. This creates negative externalities for these countries and for our world. Now environmentalists are trying to raise awareness among the international community through the use of negative advertising with the hope of decreasing the serious pollution problem.

Many industries in the west are not accounting for the full costs of the pollution that their factories are producing. The pollution that is emitted from these factories negatively effects the workers and society as a whole. Now that governments have started to tax polluters, many companies in the west have decided to move their production sites to third world countries that have no pollution policies. This creates a negative externality of production for the society because the producer places external costs on a third party that is not involved in the market transaction. Companies are often drawn into exterailizing their costs because it keeps their own costs down and ...

Negative Externality of Production




This graph illustrates the negative externality of production in the polluting industries. The marginal social cost is higher than the marginal private costs which means that society is forced to pay a higher price for the pollution created by a private producer. In order to correct this problem environmentalists like the NGO Blacksmith and the Green Cross Switzerland have started an advertising campaign to raise awareness among the international community. This might mean that they are trying to decrease demand of the private consumers or they might want to create awareness among governments and influential organizations so that supply decreases. This graph shows the decrease of the marginal private costs which would bring supply closer to the socially optimal level also known as the marginal social cost.

The Tragedy of the Commons

1. What is Garret Hardin most concerned about?

Garret Hardin is most concerned about the idea of private property and the commons. In his essay he states that the commons negatively effect our environment, because people do not hesitate to overuse these resources.

2. How can "the commons" best be defined?

The "commons" are land that is not owned by anyone. Examples of "commons" are: the atmosphere, the oceans, the rainforests, etc.

3. Are individuals who overuse "the commons" acting irrationally? Explain.

No, individuals that overuse the "commons" resources are acting quite rational, because the overuse of these resources are not restricted in any way and they are not regulated by anyone. Although the overuse of public resources affect the environment and society extremely negatively, the "over users" are not acting irrationally.

4. Besides the "common pasture", what other resources does Hardin identify as "commons"?

Besides the pastures, Garrett Hardin also identifies the national parks of America and the oceans as commons.

5. What are some of the possible solutions he suggests for the problems faced by America's National Parks?

He suggests that the national parks should be privatized, aka. sold to private owners.

6. How are air and water different from pastures, the oceans, and national parks in the "tragedy" presented by the common resources?



7. What are some of the possible solutions Hardin suggests for the "cesspool" tragedy represented by the pollution of our air and water?

He suggest coercive laws and taxing devices to, that would make it cheaper for the polluter discharge the treated pollutants than the untreated pollutants.

8. How does the tragedy of the commons lead to market failure?

The overuse of the commons negatively affects everyone living on our planet. The resources that are destroyed and overused can never be recovered which does not only affect the polluters but also everyone else, this is what makes it a negative externality and therefore a market failure.

Commentary 2

Articles

1. Cars firms try to reduce emissions

I think that could possibly be a good article for my second commentary. This article discussed the failed car market and that the car industry is trying to reduce the CO2 emissions by 50%. They see this as a very important goal because the amount of cars is predicted to tripple by 2050.

2. Destruction of the Rainforest

This article discusses the deforestation of the rainforests. There exists an over allocation of resources towards the production of certain goods. This is a negative externality because it harms the environment and the people living in the rainforests. The article also suggest a solution to this problem by taxing the firms who are deforesting and by subsidizing the communities living in those areas.

3. Dangerous Pollution Problems

This article discusses the ten most dangerous pollution problems. It talks about rich countries contaminating third world countries by mining and producing in their countries. The pollution created through the production of certain goods causes many health problems and death. Environmentalists are trying to work against these firms by increasing awareness among the international community. They are trying to stop the pollution with the means of negative advertising for pollution.

Fuel in Uganda

The article from the allafrica.com deals with the fuel shortage in Uganda. Consumers are accusing suppliers of holding back the fuel in order to increase the prices for fuel. But since fuel is inelastic consumers are forced to continue to consume the fuel at high prices.

Supply and Demand of Organic Food

Demand for organic food growing faster than domestic supply


Economics Commentary 1 on Demand for Organic Food in the United States



The article “Demand for organic food growing faster than domestic supply” from the Bayjournal concerns itself with the shortage of organic food in the United States. The article explains how the demand for organic food is growing rapidly and why so few farmers are willing to change their farming techniques in order to produce organic foods.
The demand for organic food in the United States has increased dramatically over the past few years. Demand is the amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. It has come to the point where supermarkets have to deal with a shortage of organic food because farmers cannot supply such amounts of food. Supply of a product is the total amount of a good or service available for purchase; along with demand which is one of the two key determinants of price. The organic food market has opened many new opportunities for farmers and has also caused many difficulties for them. On the one hand they want to supply more organic food for the nation but on the other hand they are not willing to change their cropping methods in order to grow organic food, which is grown without pesticides. Farmers would need to stop using chemicals to grow their food and wait longer for things to grow. Not every farmer is willing to do so and that is how the shortage for organic food is developing. But not every farmer acts in this manner. Many farmers have seen the opportunity in growing organic food and being able to charge higher prices and taken initiative to change their businesses to purely organic.

Customers also play a big role in the development of organic foods in the United States. They are the main reason why there is such a struggle to supply enough food that is grown without chemicals. Many Americans have started to realize that naturally grown food is way healthier than chemically grown food. Their tastes and preferences have changed their whole lifestyle and the producers are having difficulties supplying enough organic food to the entire nation.
If one looks at the development of organic food on the demand curve, then one can see that there has been a dramatic shift in demand. The current problem is that although demand is increasing drastically supply is not showing the same growth. The demand curve below illustrates what should be happening in the market for demand. As explained earlier many farmers are not willing to change their farming techniques and are therefore unable to keep up with the demand for organic food.

At this point in time many farmers are still hesitant towards the thought of having to change their entire crops in order to produce organic pesticide free food. But I believe that these farmers will soon realize that there exists a huge niche which they could fill and make a lot of money with. Since there is such a huge shortage in this area, market farmers are able to charge higher prices and make a lot of money. I think that this will inspire many more farmers to take the risk of not being successful without pesticides and start producing more organic food.

Market for Organic Food