TOPIC 11: ENVIRONMENTAL ECONOMICS ~ ECONOMICS FORM 5
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ENVIRONMENTAL ECONOMICS
Environmental economics refers to as a form of progressive economics trying to account for various forms of market failure to better market in the future and lead to more widespread forms among people.
restrict investment
encourage others.
i.) Economic performance
-Economic performance include things like increase in GNP, balanced trade and balanced of payment, and other economic aspects, therefore a country with sustainable development experience high growth of GNP and good position of balance of trade and payment.
NEGATIVE EXTERNALIZES
These are costs or disadvantages incurred by a party who did not agree to the action causing the cost. Negative externalize are considered as disadvantages people incur without their will mostly caused by a production process sometime even consumption.
Negative external is also called spill over cost or public bad.
Illustrative examples of negative external
When an industry cause pollution in production process,this is considered as negative external because the pollution impose cost/disadvantage to whole society e.g disease
Another example of negative external is when there is discharge of polluted or unclean water in water bodies from industries which results into the loss of living organism while there is no compensation claimed for the loss occurred.
IMPLICATIONS OF EXTERNALIZES
Standard Economic theory state that’’ Any voluntary exchange is beneficial to both parties involved in trade if it does not benefit both, however an exchange can cause an additional effects on third parties from the perspective of those affected these effects may either be positive (positive external) or negative(negative external) Welfare economics has shown that those who suffer from externalize implies no voluntary exchange in an economy.
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