Can the market solve the ozone problem Essay Example | Topics and Well Written Essays - 2000 words

Can the market solve the ozone problem - Essay Example However, it is not entirely impossible to say that a market solution is not possible to address the ozone problem. Although prices may be high, the market will still be free, with no official obstacles to the depletion of the natural resources or the pollution of clean environment. Since natural environment are consumed on a ‘first come, first served’ basis, contemporaries may be willing to pay a great deal and use these resources rather than trouble with conservation. (p. 135) In light of this, it is fundamental that in order to capture the full effect of pollution, there should be the existence of some link between the present and the future. How can we achieve this? The answer lies not in the agents of the market - the population in today’s generation – but on the firm, which has the capacity to live forever. This starts with the owner of the firms, there is a potential of taking responsibility by looking beyond their lifetimes. An owner is in a better position to see the ozone problem in terms of its long-term effect than what is currently experienced from the perspective of his firm. It is safe to say that, as an owner, he must take care that the firm survives for his predecessors and heirs. The consequences of future environmental damage are reflected in the firm’s price – maximizing value requires consideration of all future effects of today’s actions. The quality of the environment, wrote Partha Dasgupta and Karl- GÃ ¶ran Maler (1997), is part of the capital stock, just like bridges and buildings and that there is every reason to treat the environment along with other capital as relevant input in a firm’s production function. (p. 38) This is one of the major factors in the market solution to the ozone problem. The above argument underscores the uniqueness of the ozone depletion as an environmental problem for businesses. The effect of the ozone has a wider net