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Questions on negative externalities

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Robots and income inequality: utopia or dystopia?

Policies for the environment

The topic of the environment has been highly contentious in recent years. Demonstrators in many countries have been vocal in highlighting a wide range of issues that threaten the planet, supported by scientific evidence and high-profile documentaries. But how can these issues be tackled? Peter Smith looks at some economic measures that may help

■ Figure 1 is a reminder of the effect of a negative production externality caused by pollution resulting from a production process, which was discussed in the centrespread in the November 2022 issue of ECONOMIC REVIEW.

■ The welfare loss shown as the shaded area arises because firms take decisions on the basis of the private costs that they face, so do not take the external costs into account.

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Previous

Questions on negative externalities

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Robots and income inequality: utopia or dystopia?

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