Question

Suppose the Environmental Protection Agency (EPA) wants to mandate that all methane emissions must be reduced to zero in order to alleviate global warming in the United States.

 

Which of the following describes why most economists would disagree with this policy?

• Reducing methane emissions is desirable, but whatever levels of pollution firms decide to emit privately are already efficient.

• Society would not benefit from lower air pollution.

• The opportunity cost of zero pollution is much higher than its benefit.

• The environment isn't worth protecting.

Answer 1

The correct answer is 'the opportunty cost of zero pollution is much higher than its benefit'

Achieving zero level of pollution is socially undesriable in the sense that it means cutting back on production activities to almost zero and adopting greener technologies. The opportunity cost of zero poluution is the value of production activties cut down and large money spent on adopting greener technologies.

Instead of trying to set up a zero-pollution goal, governemnt should instead focus on reducing pollution levels step by step and that too efficiently.