Environmental Economics Case

Imagine a factory located upstream that pollutes a river. It produces steel for the automotive industry. Downstream, local fishermen find they catch less fishes due to the pollution. Both are flourishing businesses that produce wealth and prosperity for the community.

Both industries are major contributors to the community prosperity and its inhabitants are really fond of them. In my opinion it should be resolved by a democratic way i.e. referendum. People may not know what is the whole story about, and this were the authorities should get involved and educate the community inhabitants. More objectively the better.

As a former ecological party member (a debate we did in class), I would ask the people of the community what is the most important issue for them? Wether they prefer to become a prospering industrial city or they would prefer to live in peace with nature and have a better quality of life. They have to understand that they won’t be able to continue developing both industries. The factory that is located upstream is destroying the fauna and in future they may not be any fish left. Another important matter is that probably in the future steel won’t be an important material for the car industry. The community has to decide…

Both sides are equally permitted to use the river, but conscious polluting should be penalized. It’s exactly the same action as someone would start to destroy some historical monument, which belongs to the whole society. I believe that the authorities should regulate this matter by imposing taxes on pollution or simply to forbid the factory from polluting the river or face financial consequences. It would motivate the automobile company to decrease their pollution. The authorities should also make a projection, which industry would be more profitable in the future. It can be done using the cost benefit method or the cost efficient method. It could give precise numbers and results what will be more beneficial for the community. After such an evaluation people may still be no pt decided, because the problem is tackling environmental issues, on which it is difficult to put price.

Of course in the real world such communities doesn’t exist and the situations and issues are far more complex. Normally the authorities has to take decisions on their own. This is why in the case of that small community I thought, that a referendum would be a good idea. Its inhabitants know the reality and with a bit of new knowledge they will be able to make a reasonable decision.

Comments Off on Environmental Economics Case / 27 Nov 2011 por Piotr Adam Lubiewa-Wielezynski
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