question_answer 8)

Explain how the opportunity costs of negative environmental impact are high.

Answer:

Opportunity cost is the cost in terms of foregone opportunities of doing things. There has been a reversal of supply-demand relationship for environmental quality. We are now faced with increased demand for environmental resources and services but their supply is limited due to overuse resulting from rise in population, affluent consumption patterns and industrialization. Many resources have become extinct and the wastes generated are beyond the absorptive capacity of the environment. This negative environmental Impact has high opportunity costs as explained below (i) The industrial development in past has polluted and dried up rivers and other aquifers making water an economic good. Cleaning up of polluted rivers and replenishing water resources require huge investments. (ii) The intensive and extensive extraction of both renewable and non-renewable resources are exhausted. Some of these vital resources and huge amount of funds need to be spent on technology and research to explore new resources. (iii) The health costs of degraded environmental quality are also present as decline in air and water quality have resulted in increased incidence of respiratory and water-borne diseases. (iv) Global environmental issues such as global warming and ozone depletion also contribute lo increased financial commitments for the government. Thus, it is clear that the opportunity costs of negative environmental impacts are high.