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17 October, 13:15

What are ways the government can prompt a producer to internalize pollution costs that were previously external?

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  1. 17 October, 15:43
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    There are three ways to deal with negative externalities: 1. - taxation 2.-regulation and 3. - property rights. Taxaxion puts an adititional economic burden on polluting companies. Regulation can be in imposed when the government requires a technological fix or limiting the quantity of goods or pollution produced and the property rights solution is also called the Coase theorem. Because it is difficult to explain I will put an example that happened in Peru a big mining was polluting the environment specially some olive farms that complained to the company and the company agreed to pay certain amount. This agreement was reached without government intervention which is key to understand this solution: It is without government intervention.
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