Building a Green-Belt - Assignment Example

The steps that the policy-maker might adopt ideally in this case, in order to reduce the number of harmful emissions from the power plant are - 1. Build a green belt around the plant premises.2. Impose a tax on the power plant for polluting society.3. Subsidize the society to compensate for their loss.Benefits and Costs of the StepsBuilding a green belt might be an ideal way to compensate for the pollution. But, since the process is an expensive one, it won't be feasible to implement unless the production involves a necessary item.

Again, the imposition of taxes might not be an ideal way for a necessary good since it discourages the production of the same. On the other hand, subsidizing the general public might be able to compensate them financially for the time being, but, the harm that befalls their health is permanent in nature and cannot be corrected in any way. Level of PollutionEven though policies are undertaken, there must be some restrictions on the amount of pollution. An ideal way to decide the optimal amount of pollution is to find out the point of intersection of the marginal benefits and marginal costs of the production of the commodity on the society.

This method is by far the best-known method to decide the optimal level of pollution since it takes into account both the benefits of production and the corresponding cost of a negative externality (Campbell, Stanley & Campbell, 2005).