20 - CHAPTER 20 EXTERNALITIES, THE ENVIRONMENT AND NATURAL...

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C HAPTER 20 E XTERNALITIES , T HE E NVIRONMENT AND N ATURAL R ESOURCES 1. A small African village may exist in a very delicate balance with its surrounding environment. Thus increased intensity of animal grazing may lead to destruction of the grasslands and encroachment of the desert. In an Indian city, the most pressing pollution problems may lie in the area of sanitation and garbage disposal, with consequent serious effects upon public health. In many communist countries such as China, it appears that the public commitment to industrialization, together with an absence of forums in which people could express their real interests, led to the neglect of the pollution caused by industrial wastes. In New York City, although there is concern for the environment, nevertheless the intense level of industrialization, auto traffic, and population lead to high levels of noise and atmospheric pollution, and crowding. 2. (a) The tax per unit of emissions should equal the money value of the damage caused by a marginal unit of those emissions. Of course this is easier said than done. It may be difficult to
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This note was uploaded on 04/14/2010 for the course ECONOMICS 2312 taught by Professor William during the Spring '09 term at 東京大学.

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20 - CHAPTER 20 EXTERNALITIES, THE ENVIRONMENT AND NATURAL...

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