Natural Resource Economics

Business

Quiz 20 :
Toxic Substances

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Quiz 20 :
Toxic Substances

The model of population control where everyone is entitled to produce only one child has many disadvantages and several advantages. The model does take into the account the possibility of immigration and migration. For this reason, the country may end up in having more population than expected even though the crude birth rate remains zero. Equally important is the fact that since certificates are tradable/transferable, everyone places a different value on the child. For some, the child is inevitably a future investment and for some it is not. In case of pollution permits, some firms are more equipped so they can abate more pollution than the other. In this sense, the government can be a buyer of the certificate as well. Mortality rates also affects the birth rate and so the birth rate may not be zero. In the United States where the baby boom generation is retiring and the current workforce is unable to pay for the Social Security, this scheme is inappropriate.

It has been stated that every molecule of a non - renewable resource used today precludes its use by future generations. Therefore, the only morally defensible policy for any generation is to use only renewable resources. It would not be right that only morally defensible policy for any generation is to use only renewable resources. It is right that non - renewable resources used today would not be available for use by future generation but that does not mean that we cease to use the non - renewable resources. Contrary to that if sustainable use of non - renewable resources is undertaken then not only resources would be available for meeting the needs of the present generation but are also be available in adequate quantities for future generation as well. Moreover, this sustainable use of non - renewable energy sources would also be morally as well as ethically acceptable. However, for achieving sustainable usage of resources following principles has to be adhered to - 1. While using non - renewable resources, full cost of usage should be paid by the user so that quantity used of non - renewable resources could be reduced because it has been seen that due to payment of lower than full cost, excess resources are used than are required. 2. Rather than common property resource, non - renewable resources should have exclusive property right as it has been witnessed that exclusive property rights induce preservation and sustainable use. 3. All current uses of non - renewable resources should be compatible with the requirements of coming generations and present value criterion should be used while allocation so that sustainability criterion could be met. 4. Every citizen should be fully informed about the impact of their current decision to use non - renewable resources on future availability of such resources so that they can also participate as fully as possible in the transition to sustainable use.

It has been given that future generations can cast neither votes in current elections nor dollars in current market decisions. Therefore, it should not come as a surprise to anyone that the interests of future generations are ignored in a market economy. It is right to state that market economy will ignore the interest of future generation because in market economy resources are allocated on the basis of demand for and supply of them. Since, future generations cannot influence either demand or supply it would be understood that market economy will not take into account the requirements of future generations while allocating resources especially non - renewable resources. However, if present generation themselves understand the situation that would be faced by the future generations then in that case current generation can tweak its demand and supply in such a manner that market undertake efficient allocation. Efficient allocation here implies that market allocates resources especially natural or non - renewable resources in such a manner that sustainability criterion could be met. This implies that not only needs of present generation get adequately met but ample resources remain so that needs of future generations could also be meet sufficiently.