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What problems do environmental issues create for economists, and what solutions might an economist suggest for the problem of more and more cars using the roads.

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Introduction

Economics essay A) what problems do environmental issues create for economists B) what solutions might an economist suggest for the problem of more and more cars using the roads. Environmental problems are different problems the environment is facing due to new technologies. These problems are pollution of the nature around us through smoke with harmful chemicals or due to loud noises from speakers or radio etc or from refrigerators and air conditioners at home which give out CFC chloro-fluro carbon which damages the ozone layer. Cutting down of trees to is environmental damage as each tree cut down is destroying shelter of a bird, the shade we could get from it etc. Environmental issues are major problems for economists who study the depth of problems which can affect the economy and environmental problems do affect the economy to a great extent. The following are the problems caused by environmental issues to the economists. 1) negative externality - externality occurs when full cost of production or full cost of benefit is not taken under consideration. This is when a good is produced taking into consideration only its private cost ( cost of producing the good ) and not considering its external cost ( that is the extra cost of the damages the good has caused while production). ...read more.

Middle

The causes of these problems are difficult to locate therefore the economists cannot find possible solutions to the pollution caused. As per the example the Malaysian government might be unaware of the pollution being caused by the Indonesian chemical plants. So the government doesn't know how to treat the problem even after it has taxed its own resources. The economists may fail to study the depth of the problem of the pollution caused because of problems caused while locating the cause of pollution. 4) These environmental problems may also lead to issues for the economists because often the cost of the damage caused in a country has to be paid by that particular country even though it is not the polluter. Taking the above Malaysia example the price of the damage caused by Indonesian chemical plants have to be paid by Malaysia who is taxing its own plants for the damaged. Therefore if it is difficult to locate the polluter then the country which is polluted has to pay the price. All these are the various problems caused to an economist with regard to environmental problems it is a negative externality that is the social cost is greater than the private cost, the cost of the damage may cause problems in the future, it is difficult to locate the cause of the pollution, the cost of the damage is paid by the non polluter. ...read more.

Conclusion

People will prefer to travel in something besides cars in order to avoid the heavy taxation. 3) Taxing car parking areas. this would discourage firms from providing car parking lots or spaces and as a results would not let the motorists achieve their objective that is if there is no car park motorist may find it tedious to get parking space and therefore the motorists would prefer not traveling by car. 4) Improve the public services is also an option to reduce use of cars. If the public transport are made more efficient and convenient then people would prefer traveling by public transport rather than paying so many taxes on traveling by car. You could also minimize the cost of traveling by public transport and therefore allow more people to travel by it. Also the taxes collected by the cars can be used in the development of the public transport. 5) Increase taxes on cars, by increasing the prices of the cars by taking into consideration the social cost and not only the private cost. Make the consumers pay the external cost caused by the cars. Therefore discouraging them to buy cars in the first place All these are ways put forward by economists for reducing people from using cars by taxing complementary goods like petrol and also by taxing car parks and then by improving and subsidizing public transport and by having road pricing policies to have a license or electronic devices to put prices on cars ...read more.

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