Micro-economic Applications of Pollution Control - Essay Example

The paper "Micro-Economic Applications of Pollution Control" is a good example of an essay on macro and microeconomics. The Environmental Management Agency expects an economic incentive to be useful in controlling pollution that does not fall under the legislation. Not all amounts of pollutions are can be judged under the law; some minimal amounts are excluded because life cannot progress without such pollutions (Segerson 23). Authorities encourage citizens to reduce the number of solid wastes by recycling, composting, and proper disposal.

Economic incentives have been devised to reduce pollution; however, these incentives have not been effective in changing behavior towards pollution. The first economic incentive is the promotion of voluntary programs such as XL, Energy Star and Waste Wise (Segerson 31). The problem with this voluntarism is that most of the citizens are not ready to volunteer in most cases. Second, the United States Environmental Protection Agency requires a deposit on beverage containers in order to encourage recycling.

Companies that are lazy in recycling than paying the deposit find it easier to pay than to recycle; pollution thus continues. Third, companies are required to pay for air emission permit depending on the quantities of emissions. Some companies have the potential for large amounts of emissions, implying that pollution does not stop with economic incentives (Segerson 14). Fourth, EPA imposes liability on natural resource damages that are caused by oil spills. When oil spills occur, the pollution is labeled accidental and no one is liable.

EPA needs to revise its economic incentives and provide strict machinery to eliminate even minimal pollution.Sulfur dioxide constitutes the most common pollutant in my area. Sulfur dioxide is released from fuels containing sulfur. These fuels include diesel fuel, coal, and oil. Coal and oil are mostly used for firing power plants, steel mills, pulp, and refineries. The largest releasers of Sulfur Dioxide are nonferrous smelters. High concentrations of Sulfur Dioxide aggravate cardiovascular and respiratory diseases.

Sulfur Dioxide leads to acid rain that acidifies lakes and streams, and damage trees, historic buildings and statutes. The annual mean of Sulfur Dioxide in my area is 0.03 ppm, the daily average is 0.14 ppm while the three-hour average is 0.50 ppm (Segerson 24). These values are slightly lower than the national mean.Controlling the amount of pollution would mean closing down some industries. The industries that would be most affected include steel mills, coal, chemical manufacturing plants and oil refineries.

These economic sectors have employed several people working as engineers, administrators, managers, accountants, cleaners, drivers, and marketers. Terminating operations of the Sulfur dioxide-releasing industries will increase the amount of unemployment by 9 percent (Segerson 23). The amount of pollution released by these industries is within the socially optimal level of output. Some amount of pollution must be tolerated because human beings cannot survive without the products manufactured by these industries.

The best way to control pollution is by introducing pollution permits. A pollution permit can be applied to limit the amount of pollution regardless of whether emissions occur. Firms can be given the choice of purchasing permits to offset pollutant emissions, install emission controlling technologies, or reduce the reduction in order to maintain the minimum level of emissions. Firms will compare profits gained when producing the minimum quantity, using advanced technology or paying for the pollution permit.

The option that promises the highest economic gains will be selected.