Topics: Pollution, Pigovian tax, Externality Pages: 6 (2084 words) Published: May 4, 2014
PART B – Case Study

Pollution is a predominant issue that the world faces every day. Pollution is the release of harmful substances or products into the environment. This essay will cover the topics of why polluters should pay the price for polluting, market failure in relation to polluted stormwater, the affects of pollution on the economy, local households contributing to stormwater pollution, the carbon tax is only for big polluters, the negative externalities, the marginal-cost and marginal-benefit analysis on the system of fines and pollution taxes impact on the level of pollution, and discussing policy alternatives on pollution control regulatory systems.

Currently in Australia there is a carbon tax on Australia’s biggest polluters, although households and small business are exempt from paying a carbon tax, the biggest polluters in Australia’s account for around 60% of pollution in Australia (Australian Government, Clean Energy Future, 2013).

“Be Warned: Pollute and Pay the Price” by Catherine Hockley suggests that polluters should pay the price for polluting, so that pollution can ultimately be reduced. Stormwater has been recognised as the major source of pollution in streams and coastal waters of Australian cities (Duncan et al. 2010). If polluters are not penalised for polluting the environment they will continue to pollute without hesitation. Imposing fines on polluters can reduce and restrict the amount of pollution created and force the polluters to create or use more efficient processes.

The market system has failed to provide adequate protection for the environment resulting in market failure. As polluted stormwater has already entered rivers, lakes and the sea causing serious environmental damage from various manufacturing industries, the market system has only acted once the damage has been done. As for small businesses and households there is no accurate way to measure where the pollution is coming from. The market system needs to establish a policy or regulations to deter small businesses and households from polluting stormwater drains. Regulations need be created for both sources of polluting, if only one source is controlled, i.e. the manufacturing industries, and not both the damage to the environment will continue to grow. The market system needs to protect the environment before it is too late.

Pollution not only harms the environment but can have a negative effect on the economy as well. The more pollution created the more greenhouse gases is created which effects climate change. As a result of climate change the world will endure increased temperatures, and sea level and floods, droughts, heat waves and other extreme weather events will become more severe and more frequent. These natural disasters cost the economy billions of dollars in lost output. The flooding in Queensland and cyclone Yasi cost the economy 12 billion dollars in lost output affecting the agriculture, tourism, mining and insurance sectors (Australian Government, Clean Energy Future, 2013). As cyclone Yasi destroyed a substantial amount of crops, it affected the nation’s fruit and vegetable supply and the price for these products increased dramatically. Bananas in particular rose from $1.98 per kilogram to $5.98 per kilogram (Financial Review, 2011). Reducing pollution now reduces the affects it has on the environment and economy in the future.
Whether it’s a large company, small business or household, we all contribute to pollution in some way. Households and small business contribute to stormwater pollution by putting harmful products down the sink, toilet or stormwater drains. Substances such as petrol, grease oil pesticides and herbicides, solvents (paint strippers) are difficult to remove in the sewage treatment process and cause pollution problems in the local waterways, downstream and the ocean. Large businesses are taxed on pollution and are forced to cut their pollution by finding...

References: Australian Government, Clean Energy Future, 2013, Carbon Price, viewed 19 August 2013, http://www.cleanenergyfuture.gov.au/clean-energy-future/carbon-price/
Australian Government, Clean Energy Future, 2011, Securing a clean energy future, viewed 14 August 2013,
‘Banana price doubles as supplies get scarce’ 2011, Financial Review, 4 February 2011 viewed 23 August 2013. http://www.afr.com/p/national/banana_price_doubles_as_supplies_uXqSs9bmHcQsNlRf2TXcVI
Francey, M, Fletcher, T, Deletic, A, & Duncan, H 2010, 'New Insights into the Quality of Urban Storm Water in South Eastern Australia ', Journal Of Environmental Engineering, 136, 4, pp. 381-390, Academic Search Complete, EBSCOhost, viewed 2 August 2013.
Horngren, C, & Waters, J 2011, Cost Accounting: A Managerial Emphasis / Charles T. Horngren ... [Et Al.], n.p.: Frenchs Forest, N.S.W. : Pearson Australia, 2011
Queensland Government Department of Environment and Heritage Protection, 2006, Water Pollution: Wastewater, viewed 18 August 2013 http://www.ehp.qld.gov.au/water/monitoring/wastewater.html#how_can_i_help
Sloman, J, Norris, K, Garratt, D, & Alhashimi, H 2010, Principles Of Economics / John Sloman, Keith Norris, Dean Garratt, n.p.: Frenchs Forest, N.S.W. : Pearson Australia, 2010
Uren, D 2013, ‘Emissions drop signals fall in carbon tax take’ The Australian, 23 January 2013, viewed 26 August 2013,
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