Regulation of Industrial Pollution - Assignment Example

Regulation of Industrial Pollution Student's Name Instructor Date Introduction Every other society must always decide on how to best utilize the scarce labor, capital and the natural environmental resources for the production of both goods and services. In order to get the most out of the societies scarce resources, the processes of production and consumption have to be arranged in manners that will avoid inefficiency in the use of the scarce resources and also limiting the consumption of goods and services (Russel, 2009). Will examine to a large how the society as a whole rather than just but a single firm exist in a social and economic efficiency when the goods and services that the society needs are produced in the required quantities and consumed with very little or no wastes from either production or consumption on the other side. In order to get to these goals two main conditions of efficiency should be applied and that is productive efficiency and a locative efficiency (Pearce, 2002). Applying the reasoning of marginal analysis to solve problems of optimization is very effective; finding the optimal pollution level in the lake can also be found using the same method (Russel, 2009). Finding the optimal level of pollution in the lake is very important since it helps one demonstrating the power of marginal analysis. In order to find the optimal level of pollution in the lake, both the policy makers and economist must have the ability of measuring with a reasonable degree of accuracy both the benefits and the cost that affect the society for the different levels of pollution in the lake (Meadowcroft, 2002). As it has been clearly determined, finding the optimal level of pollution in the lake also determines the optimal level in which the firms within the lake that emit the crude has expend in attempting to reduce, prevent and control the pollution in the lake. Such thing done to prevent pollution are called pollution control or pollution abatement processes (Pearce, 2002). The benefit to the society that comes from reducing pollution is directly equal to the dollar value of the damages that are made by pollution that is avoided by the pollution abatement process (Bruyninckx, 2002). The measure of the damages to the society by the pollution includes all the costs that are attributable to the pollution in the lake, such as sickness to the humans, the value of the lost recreation and productive use of the environmental resources, the cost to the society due to the loss of the natural habitat and many others. The measure of the damage is a more complicated process as it involves many disciplines and complex analytical methods (UNEP, 2007). Finding the optimal level of pollution, there is the need to determine the marginal damage that is caused by the pollution. This means in addition to the total damages that are attributed to discharging or more units of the pollutant which is crude into the lake have to be determined first again (Pearce, 2002). From the figure above the curve that is labeled MD gives the marginal damage for the several of the pollution emotions into the lake. As it is illustrated it is very clear that the pollution in the lake has no damage till the threshold level of about 400 tons of the crude per year (Russel, 2009). After this threshold is crossed, any additional ton of the pollutant emitted causes a great damage to the society. The damage that is caused by about 600 tons of crude emitted into the lake estimated to cost the society about $20. In order to obtain the total damage that is caused by the pollution we add the marginal damage for all the units of crude that were discharged into the lake (Pearce, 2002). From the diagram above, reducing the rate of pollution always requires a lot of expenditures on the pollution control activities. Since the company owners which include the new established are also members of the society, their cost of reducing pollution have to be considered when the policy makers are making a determination on the optimal level of pollution(Pearce, 2002). As shown in the graph MAC, addition to the total cost of reducing the emissions by about more than a tone annually. The MAC curve intersects the emission axis at the uncontrolled level of emissions, which is the total amount of pollution if the companies emitting the crude do not make any profit to control the pollution (Russel, 2009).600 tons of pollutants per year may not be the optimal level of pollution since increase in the level pollution and reducing the amount of abatement reduces the total cost of the pollution to the society (McCarthy, 2004). The reasons why the companies have to increase the rate of pollution to more than 600 tons per year which reduces the cost of abatement is due to the fact that total damage rises with the higher level of pollution(Meadowcroft, 2002). If pollution is reduced to zero, that is according to the environmentalist that means the rate of production goes to zero too this is neither good for the society as the economy of the society will go down due to high demand of goods that are not available. This disapprove the idea of no pollution is good to the society (Pearce, 2002). From the cases above, if the new factory increases the amount of crude per unit of the output that is produced then that means the amount of pollution increases and the optimal level of pollution is raised compared to the former situation. Initially before the company came into being the optimal level is seem to be lower but with the rise in rate of pollution then the optimal level of pollution rises as shown in the figure bellow(Russel, 2009). Water skiing is one of the social activities with affects the optimal level of pollution. Skiing is an activity that increase the rate of pollution in the lake, this activity increases the use of water in the lake and additional pollutants from the engines of the jet skis used in the lake (Bruyninckx, 2002). This means that the optimal level of pollution in the lake will rise but in a small unit as the pollution may not be as high as that from the manufacturing companies emitting crude (Russel, 2009). Optimal pollution level before skiing activities. Optimal pollution level after skiing starts (Bruyninckx, 2002). The determination of the optimal level of pollution is very important to both the society and the government. It should be carried out from time to time so as to protect the society from the effects of the pollution. The cost of effects of the pollution prove to be more compared to the cost of controlling and managing the rate of pollution therefore determination of its optimal level is very important.Any government needs the data in order to be able to impose and regulate taxes from those who pollute the lake, this is therefore very important. It is the responsibility of the government to protect its citizens and also give them a good economic environment. Question 2. Regulation of industrial pollution The effects of industrial pollution are adverse to biodiversity. These effects have been increasing globally for the last two centuries. The toxification of environmental sites has led to the loss of some ecosystem services leading to the destruction of living organisms within the ecosystem due to the emission of poisonous gases to the atmosphere from industries. Toxic substances are harmful and poisonous thus bringing the adverse effects to the environment. In the United Kingdom, this has brought much concern to the government and other organizations to call for environmental regulation (Markowitz, & Rosner, 2012). The aim of this paper is to assess the relative strengths and weaknesses of using the following to regulate industrial pollution: conventional commands and control regulation and economic instruments such as emissions of taxes or emissions of trading schemes (ETS) (Ramis, 2012). (i) Conventional Commands and Control Regulation This is the direct control or regulation of industrial activities using the set rules and regulations commonly known as legislation. The legislation regulating industrial activities clearly states what is allowed and what not allowed regarding the activities of the industries. The conventional commands are the qualities and targets that must be met by industries as per the legislation controlling industrial activity. The control aspect here the negative sanctions or punishment extended to those industries that fail to comply with the set rules and regulations and can be in the form of prosecution (Lan, & Munro, 2013). Command and control regulation involves various methods that influence behaviour through threats, agreements, contracts, rules and incentives. This means that if the problem exists the answer for its regulation and established and accordingly implemented. Not only in the UK, the command and control regulation is applicable worldwide (Markowitz, & Rosner, 2012). Strengths and weaknesses of this approach Through implementation and enforcement of command and control policy, the desired results are achievable. It also has benefits to the government which is the regulator because the compliance when enforced is swift. It is cheap to administer and also ensures that there is reduction of industrial pollution to the environment (Testa, 2012). However there are weaknesses of this approach and they involve: Enforcement: there is a big challenge in enforcing the set laws because it is very expensive to administer and ensure that the rules developed are complied to. This occurs in most cases where there is a complicated nature of rules and regulation that lead to problems in the scope: Legalism: there have been accusations of enterprise and stifling related to command and control regulations. The rules are said to be complicated and the approach is hard to follow by industries.Hence calling for flexibility of the command and control regulations. Standard setting: there is a challenged when selecting the appropriate standards to be implemented by the command and control regulation. Proper selection and implementation is essential to ensure that there is no intimidation of the regulated ones. Capture: the interest of the public is likely to be neglected because the relation of the government and the industries may have contradicting concerns. (Ramis, 2012). (ii) Use of Economic Instruments to Regulate Industrial pollution The economic instruments that affect the regulation of industrial pollution referred here are the emissions of taxes and and Emissions of Trading Schemes (ETS). The assessment of the strengths and weakness economic instruments such as emissions of taxes and emissions of trading schemes are assessed using the table below: Strengths Weaknesses Conditions for favorable use Taxes or charges imposed on exploitation of natural resources The charges or taxes increase revenue and tend to equalize pollution abetment costs. Also continuous innovation reduces this abetment costs. The implementation also may be done using the existing rules and regulations. There are high monitoring costs and there is also uncertainty about the emission levels of pollution. Also the affected are the concerns of competitiveness and income distribution. There is also lower predictability of future adjustments. The favorable condition for use here is that of public-good market failure where there is no monitoring and information costs Taxes or Charges on proxy for pollution The benefit is that the implementation can be done through slight adjustments to the existing tax levels and also the cost of monitoring adds administrative costs can be minimized. In this case, usually there is loss of efficiency and dynamic relative to the charges at source and these in most cases apply in situations of distant proxy. Where the market is not dominated by monitoring costs and insufficient scope or the ability and capacity of the trade system. Cap and trade permit systems There are certainty over the level levels of pollution and once they are in place they are protected by the stakeholders ensuring that there are mechanisms that are natural to for the transfer of finances in the global aspect and also they tend to the equalization of the abetment costs and pollution hence raising revenues and continued incentives to innovate ways of reducing abetment costs. There is the potential of the volatility of the price and frequent adjustments to cap. Also there do exist concerns of competition and the distribution of income. There do exist the adoption of incentives that are lowered by costs by consumers and the producers. This leads to the steep learning curve and potential high start up costs like administration and transaction costs of environmental regulation. (Ramis, 2012). Limited pollution effects and damage depending on the amount of the pollutant in question. References Bruyninckx, H. (2002). 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