Water Pollution: an Economic and Environmental Issue

By Dipayan Banerjee

Over the past few weeks, I have been trying to find a possible solution for the issue of water pollution in my community. I considered externalities and monetary concerns while trying to find the best solution. My final solutions are listed below, as well as the solution I chose as the best.

Solution 1: Start a government-funded cleanup program.

Unfortunately, this solution does not meet many criteria. First of all, this would take a large amount of government money. Secondly, this solution would take a large time to implement because many of the people who make decisions wouldn’t agree on the specifics. Also, this solution does not do anything to stop the continuing pollution of water; it simply gets rid of the pollution present at the current time. On the other hand, this would be very beneficial to businesses that depend on water for profits. The public may also view the government more favorably because the government took initiative to clean up a public good.

Solution 2: Impose larger fines for individuals and businesses caught polluting rivers/lakes/oceans.

                This solution meets more criteria than the first solution, because it would be cheaper to implement. The local government already fines individuals caught littering roadways, so it would be easy to expand this into bodies of water as well. However, this solution will probably not be met with public approval because most people don’t want to pay fines, especially in this economy.

Solution 3: The government will give monetary incentives, such as small tax reductions, to businesses which pass an inspection which evaluates if the businesses follow environmentally safe business practices.

                This solution meets more criteria than the other two solutions. It would not be as expensive to enforce as the first solution. It would also boost the economy by helping businesses, which would lead to public approval. It also has many positive externalities such as the fact that it boosts the financial market because businesses are more profitable.

                Overall, I think that Solution 3 is the best to implement to help reduce water pollution. It is relatively cheap to implement, and it provides many beneficial externalities which will help businesses and the community to move forward.