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20 August, 07:19

Some coal is mined by private companies on land owned by the federal government. Two economists writing in an opinion column argue, "The federal government should also take into account the economic consequences of burning coal when pricing this fuel. The price for taxpayer owned coal should reflect, in some measure, the added costs associated with the impacts of greenhouse gas emissions."

a. What do these economists mean by "the added costs associated with the impacts of greenhouse gas emissions"?

b. Do you agree that the price the federal government charges the coal companies should include this cost? Briefly explain.

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  1. 20 August, 10:30
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    a. What do these economists mean by "the added costs associated with the impacts of greenhouse gas emissions"?

    They are referring to the negative externalities caused by burning fossil fuels.

    An externality occurs when an economic activity has consequences for a third party, without those consequences being reflected in the costs and price of th eactivity.

    Burning fossil fuels causes greenhouse gas emissions which as a great number of negative externalities: climate change, sea-level rises, urban pollution, urban heat island effect, etc.

    The economists are arguing that the price of coal should be higher in order to reflect those externalities.

    b. Do you agree that the price the federal government charges the coal companies should include this cost?

    Yes, I agree with that view because as explained above, the number of negative externalities associated with burning coal is immense. Coal use should be discouraged by making it more expensive while coal is phased-out for cleaner energy sources.
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