Quiz 21: Environmental Justice

Business

The future looks promising, perhaps because of the few initiatives that have been taken in the recent past by major global economies. Markets have responded swiftly and automatically to deal with resources that are experiencing higher prices. Recycling is being done largely, green buildings are proliferating, new sources of renewable energy are being developed. The governments have to establish well defined property rights to encourage the market system to respond to scarcity. However, neither the private sector left to itself, would choose a dynamically efficient outcome nor the government can regulate all the behavior. Regulation involves huge costs and the present system works because only few people disobey the laws. The end of the civilization is coming is an extreme and pessimistic view. Instead, this is not the end but the beginning, not the decline but a transformation of civilization.

Markets have responded swiftly and automatically to deal with resources that are experiencing higher prices. Recycling is being done largely, green buildings are proliferating, new sources of renewable energy are being developed. However, neither the private sector left to itself, would choose a dynamically efficient outcome nor the government can regulate all the behavior. The presence of externalities poses a barrier in the transition to sustainability. The market process will not align the private cost and social cost and it will be biased. Case for the intervention by the government becomes compelling in the light of these deficiencies. The governments should establish well defined property rights to encourage the market system to respond to scarcity. Regulation involves huge costs and the present system works because only few people disobey the laws. Hence a high degree of voluntary compliance is necessary for the development to be sustainable and for the system to work smoothly.