Chapter 10

What is your favorite example of a negative externality?  Could the problem be solved via negotiation (Coase Theorem)?  How or why not? Do you favor regulation to solve this externality?  Why or why not?  

I do have a favorite example of a negative externality. I did a research paper a few semesters ago on Factory Farming and its effects on the environment. The effects of Factory Farming on our environment and public health is enormous and our society is blissfully unaware. The waste run off from the animals before slaughter contaminates our ground water and nearby rivers; not forgetting to mention the waste from the slaughter itself. They have what they call lagoons that store and treat the waste before they release it into the nearby water ways. These lagoons frequently leak and overflow which causes toxic waste to flow into the surrounding areas before it is treated. Air pollution from the waste and the smells from the slaughter causes neighboring communities to suffer. I really could go on and on. There is constant litigation, and negotiations taking place but the reality is they are ineffective to the problem and the demand for meat in this country continues to increase. The problem is not being solved. 

Yes, I favor a regulation to solve this externality. The public might not like me very much after I say this but I would propose a $5-$10 (extreme, I know) environmental impact fee for every single fast food purchase made; every single restaurant in the country that purchases meat from large corporate farmers. Every single consumer of fast food/restaurants would have to pay this fee which would go directly to the area's that are impacted by the Factory Farms. I think it is time that people take accountability for there consumerism and pay for the impact of those purchases. If you love Big Mac's well then pay for what it costs to produce it. I would be willing to pay the fee, but I sure would cook from home more and shop from farmers that are more environmentally conscientious.  

We live in a county that throws away so much food, and the animals slaughtered at such an alarming rate......we need to educate our children and ourselves about this problem. Money is a way to always get people to pay attention and maybe take action for change.