Externalities are market imperfections that are caused by the inability of the market to bring about justice to every action. In this case, the externality being talked about is that of pollution through various harmful elements such as mercury, dust from Africa, haze, and ozone from factories and power plants in Asia and Mexico. The externality is detrimental to the health of U.S citizens. Harmful elements are produced in other countries outside the U.S and find their way into the U.S. According to Lewin, the atmosphere has no boundaries, and there is no way the U.S can restrict their deposit in the country (207).
We will write a custom Critical Writing on Pollution Externalities Role in Management Economics specifically for you
807 certified writers online
The U.S has restricted the emission of harmful gases and other substances in the country. However, the marginal social cost that U.S. citizens incur due to the pollution of their atmosphere and environment is high. For instance, the country incurs high healthcare costs resulting from the settlement of dust from the Gobi desert in Africa, and China, among other countries, settles in the U.S. Dust contains microscopic particles that when inhaled go directly into the lungs hence causing poor health conditions and death (Lewin 221).
Los Angeles is one of the potential danger spots in which inhabitants smoke dirty air. The Federal government is the U.S. has moved fast to limit the number of emissions from the factories and industries. In the U.S., this is because a substantial amount of pollution is from U.S. industries. The government has enacted legislation that aims at reducing power plant emissions in the U.S. by 61% by 2015. However, it has been argued that an increase in imported pollution in the country could derail efforts to restore natural visibility in places such as the Glen Canyon National Recreation area in Arizona.
Major steps undertaken include the treaty that was signed between the U.S. and Canada in the year 2000 to help the two countries reduce the emission of ozone-forming gases. However, the U.S has opposed the signing of a treaty that could help reduce the emission of mercury from coal power plants. In order to clean up pollution in national parks, the U.S. would like to incorporate other countries, although there have been no global treaties signed (Hirschey 215).
Hirschey, Mark. Management economics. 12 Edn. Ohio, OH: Cengage Learning. 2008. Learner. “Demand,” 2010. Web.
Lewin, Peter. Pollution Externalities: Social Cost and Strict Liability. Cato Journal, 2.1 1982: 205-229.
Rostow, Walter. The Strategies of Economic Growth. 2 Edn, London: Cambridge University Press, 1971.