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Negative externalities are a property rights problem. Who owns the air that the steel mill pollutes? Ronald Coase put forth the solution which is known as the Coase Theorem:

In other words, if there are negligible transactions costs, as long as someone owns the rights to the air around the steel mill, the efficient outcome will prevail. For example, if the steel mill owns the rights, then the individuals that live around the mill will be willing to pay the steel mill not to produce--up to the cost that they are incurring from health care, reduced aesthetic appeal of the air, etc. This amount that they are willing to pay becomes an opportunity cost for the steel mill if they produce. Thus they will cut production to the optimal level. On the other hand, if the people own the air, then the steel mill would have to pay them that same amount for the right to produce. Thus the negative externality is directly added to the steel mill's marginal cost.

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Enjoy proficient essay writing and custom writing services provided by professional academic writers. Air pollution problem and solution essay air pollution has always accompanied civilizations. Administrative division of. Air pollution has become a major issue in China and poses a threat to. It affects our longevity, affects the body metabolism and affects even the commercial interest. We provide excellent essay writing service 24. The flights are delayed, the. Chinese public health.

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Pollution are mainly of three kinds viz. Air pollution, water pollution and noise pollution. Pollution means mixing of unwanted substances into the environment. Gandhi This entire planet is our home. Largest database of quality sample essays and research papers on Best Essay On Environment.

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Read Air Pollution free essay and over 87, 000 other research documents. Air Pollution. Air pollution is defined as the contamination of the air by impurities.