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# Pollution

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Do you drive a car? Do you throw your plastic wrappers into the garbage? Do you consider where your dirty dishwater goes after it washes down the drain? There is the "out of sight, out of mind" phenomenon for most people. But, all the waste that we produce has to go somewhere. All the waste created by the production of goods has to go somewhere. Unfortunately, often it ends up in the environment as pollution. If you are curious about pollution, its impact on the economy, and some things that can reduce its impact and prevent it, you've come to the right place!

## Pollution Definition

Pollution is defined as the contamination of natural resources such as water, air, or soil, due to the leakage or disposal of hazardous and toxic materials. Pollution can occur when proper disposal methods for waste are disregarded, we engage in activities that produce pollutants, and if there is an accident that causes contamination of the environment.

Pollution is the contamination of natural resources due to the leakage or disposal of hazardous and toxic materials.

A pollutant is a substance such as smoke or fumes that poison or damage the natural environment and its resources.

Pollution can be anything from a candy wrapper on the ground to an oil spill in the Atlantic Ocean. It can be the sound emitted by aircraft that disturbs people and animals in their homes or the overgrowth of algae due to fertilizer run-off. Pollution can be anything that makes our surroundings dirty, dangerous, or generally unsuitable for their natural use.

## Causes of Pollution

Most causes of pollution are the result of humans and their desire to produce. For centuries the best business practices have been to produce as much as possible at the lowest cost to make the most profits. This is an incentive to pollute. A firm could cut production costs by disposing of waste freely into the air or nearby rivers rather than treating the pollutants. Modern regulations have greatly decreased this practice in developed nations.

Sign warning that the river is unsuitable for swimming because it is polluted with industrial waste, Wikimedia Commons.

### Types of Pollution

The 3 major types of pollution are air pollution, water pollution, and land pollution.

 Type Definition and Examples Air Pollution When dangerous chemicals such as carbon monoxide, sulfur dioxide, methane, etc., are released into the air in unnatural quantities, they negatively affect the air quality. Examples: Car exhausts, oil refineries, power plants, and wildfires. Water Pollution When substances enter a water source, it becomes unsafe for drinking, swimming, or any other activity. Examples: Fertilizers, sewage spills, parasites, bacteria, and trash. Land Pollution When land is contaminated by improper waste disposal such as littering, those substances enter the soil and degrade it.Examples: Trash, oil pipeline leaks, sewage spills, and illegal waste dumping.
Table 1. Types of Pollution, StudySmarter Originals.

There are more specific types of pollution other than the main three. Noise and light pollution are problems faced by densely populated areas that experience a lot of overland and air travel. Noise pollution has been linked to higher stress levels, lesser quality of sleep, and high blood pressure.1

### Common Causes of Pollution

Common causes of pollution are:

• Acid rain
• Fertilizer build-up
• Raw sewage run-off
• Smog
• Disasters

Acid rain occurs when sulfur dioxide and/or nitrogen oxides enter the atmosphere where they mix with water producing mild sulfuric and nitric acids that damage vegetation and water sources.2 Fertilizer build-up is a byproduct of farming and the use of soil fertilizer, causing salts to accumulate in the soil and water sources.3 Raw sewage run-off can happen when sewage systems are overwhelmed by rain or become clogged by debris. The sewage then overflows and enters the nearest body of water, such as a river or lake.4

Smog, Wikimedia Commons.

Smog is the combination of the words "smoke" and "fog." It describes reduced visibility due to a mix of air pollutants like nitrogen oxide, gasoline, and paint chemicals mixing with sunlight.5 Smog is caused by things like car emissions and manufacturing plants. Some more acute causes of pollution are disasters such as oil spills, nuclear reactor meltdowns, wildfires, and volcanic eruptions. Since these types of disasters are not a predictable occurrence, they are more difficult to manage, and their damage is more immediate, from one day to the next.

## The Economics of Pollution Controls

The economics of pollution controls concern how best to set policies to provide economic incentives for firms to cut pollution. Pollution controls are measures that reduce current and future pollution. These policies can be laws that set a limit on the amount of pollution a firm can produce. There can be fees or fines that are applied to those who over pollute.

### Legislative Standards

Legislative standards can control pollution by setting emissions standards that must be met by a company to legally produce and sell its product. Companies have to produce products that meet the standards set by the government. The downside of these emissions standards is that they are inflexible and inefficient from an economic point of view. The government can also make legislations to seek out areas of pollution and require the industries responsible for the pollution to pay for the cleanup costs, regardless of which company caused it.

A more market-based solution to pollution controls is tradable pollution permits. Pollution permits allow firms to release pollutants into the environment. Firms can either use the permits or sell them to another firm. There are specific levels and types of pollutants that can be released. In the US, the Environmental Protection Agency (EPA) gives all utility companies a set number of permits. For some firms, it is more profitable to reduce their emissions and sell their permits to other utility companies whose cost to reduce emissions is higher.

A pollution permit costs $200. It will cost Electrical Plant A$175 to reduce its emissions. Rather than using its allotted permits, Electrical Plant A can sell its permits for a profit to Electrical Plant B, whose cost for reducing emissions is $250. It is more efficient for Electrical Plant A rather than Electrical Plant B to cut its emissions. ### Pollution Fees Another market-based solution is putting a fee on pollution. Pollution fees are a form of tax on companies that emit pollutants. This incentivizes firms to reduce their emissions to avoid paying the tax. The tax is placed on a set quantity of emissions, such as$25 for every ton of methane produced. If a firm produces 100 tons of methane, it must pay $2,500 in pollution tax. For some firms, it will be cheaper to reduce and clean up their emissions rather than paying the tax. The fees and taxes must be high enough to where it is cheaper for most firms to reduce emissions instead of simply paying the fee. ## Pollution Impacts on the Economy Pollution impacts the economy because it influences our ability to produce due to a decline in resources and the productivity of the workforce. Pollution is an economic problem. If a population is unhealthy due to their environment, they cannot work, children will miss school, and the economy will also spend more on healthcare because of pollution-related illnesses. ### Production Declining health and educational achievements of the workforce lead to less efficient production and lower output. Pollution affects our health because it contaminates the air we breathe, the water we drink, and the environment that we live in. Harmful chemicals in the air cause an increase in illnesses like asthma and Chronic Obstructive Pulmonary Disease (COPD).5 This burdens the healthcare system and causes an increase in healthcare costs while causing a reduction in labor since the workforce is becoming more ill and unable to work. Illness also prevents children from consistently attending school and absorbing the material properly. Asthma inhaler, Wikimedia Commons. Pollution also affects the production of agriculture and fishing yields. Dirty air reduces a plant's ability to absorb light properly and develop into a high-yielding crop, meaning the farmer's harvest is less profitable. Poor crop yields push farmers to use more fertilizers which build up in the soil and run off into nearby water systems, which leads to further land and water pollution. Reduced fishing is another byproduct of pollution because polluted waters do not support large, healthy schools of fish for fishermen to catch and sell on the market. ### Tourism The tourism industry suffers because of pollution due to the destruction of previously pristine sites. Tourists are drawn to scenic places. If there is environmental degradation, words will spread. People will no longer travel there to spend their money, and the local economy will feel that loss of income. This is especially true in places where tourism makes up a significant portion of national income. Litter, Wikimedia Commons. ### Economic Growth On the one hand, economic growth has the potential to reduce pollution because it means we have more money to invest in finding and developing cleaner alternatives. On the other hand, economic growth indicates an increase in production which can increase pollution. In developing countries, it has been observed that as GDP per capita increases, pollution also increases but at a lesser rate. This begs the question: what is more important - growing the economy or preserving the environment of a developing country? ## Pollution Examples There are many examples of pollution, ranging from the aftermath of a major industrial accident to the consequences of everyday economic activities. ### Deepwater Horizon Oil Spill The Deepwater Horizon oil spill occurred in the Gulf of Mexico in 2010. An estimated 4 million barrels (134 million gallons) of oil spilled into the Gulf after an explosion on the BP deep-sea oil drilling rig caused the pipe to burst at its base on the sea floor.6 It took nearly 3 months to get the site under control, and cleanup efforts lasted much longer. The damage settlement that BP was ordered to pay was around$20.8 billion, the largest settlement of its kind so far.6

Satellite image of BP's 2010 Deepwater Horizon oil spill, Wikimedia Commons.

### Harmful Algae Blooms

Harmful algae blooms are the result of nutrient pollution in water sources such as lakes, rivers, and coastal areas where human activity, like farming, has caused an excess of minerals and chemicals like nitrogen and phosphorus to be present in the water.7 Along with sunlight and slow-moving water, harmful algae can flourish and produce toxins that can poison both humans and animals. The algae consume all the oxygen in the water, making it uninhabitable for other vegetation and fish, creating a dead zone.7

Toxic algae bloom, Wikimedia Commons.

### Smog in Beijing

In the 1990s, Beijing had some of the worst air quality due to the rapid expansion of the industrial sector and increased personal wealth, making it possible for more people to buy cars. The city was overrun by thick smog. In the early 2000s, officials were taking measures to clean up the city's air.8 Some measures were:

• Lotteries for obtaining license plates for fossil-fuel cars, incentivizing the purchases of electric vehicles
• Bike-sharing initiatives
• Increased subway system to nearly 435 miles
• Routing truck traffic around densely populated areas
• Limiting coal boilers and providing cleaner alternatives

Over 20 years, sulfur dioxide in the air decreased by 93% and nitrous dioxide by 38%.8 Although Beijing's air quality is still below standard, the impact of the anti-smog measures has been globally acknowledged.

## Pollution - Key takeaways

• Pollution is the contamination of natural resources due to the leakage or disposal of hazardous and toxic materials. The pollutant is the contaminating substance.

• The economics of pollution controls concern how best to set policies to provide economic incentives for firms to cut pollution.

• Emissions standards, emission fees, and tradeable emission permits are some ways that governments can intervene to reduce pollution.

## References

1. United States Environmental Protection Agency, Clean Air Act Title IV - Noise Pollution, 2021, https://www.epa.gov/clean-air-act-overview/clean-air-act-title-iv-noise-pollution.
2. United States Environmental Protection Agency, What is Acid Rain? 2022, https://www.epa.gov/acidrain/what-acid-rain
3. Kit Smith, The Perils of Over-Fertilizing Plants and Trees, https://mgeldorado.ucanr.edu/files/170168.pdf
4. American Rivers, How Sewage Pollution Ends Up In Rivers, https://www.americanrivers.org/threats-solutions/clean-water/sewage-pollution/
5. Kim Rutledge et al., Smog, National Geographic Society, 2022, https://education.nationalgeographic.org/resource/smog
6. National Oceanic and Atmospheric Administration, Deepwater Horizon oil spill settlements: Where the money went, 2017, https://www.noaa.gov/explainers/deepwater-horizon-oil-spill-settlements-where-money-went
7. United States Environmental Protection Agency, Harmful Algal Blooms, https://www.epa.gov/nutrientpollution/harmful-algal-blooms
8. United Nations Environment Programme, Beijing's battle to clean up its air, 2022, https://www.unep.org/interactive/beat-air-pollution/

Pollution is an economic problem because if a population is unhealthy due to their environment then they cannot work, children miss school, and the costs of healthcare will increase.

Pollution impacts the economy because it influences our ability to produce due to a decline in resources and the productivity of the workforce.

Pollution is the contamination of natural resources due to the leakage or disposal of hazardous and toxic materials.

Yes and no. Economic growth means that there is more funding available for developing cleaner alternatives but it can also indicate an increase in existing production methods that are harmful.

The three main types of pollution are air pollution, water pollution, and land pollution.

## Final Pollution Quiz

Question

What is pollution?

Pollution is the contamination of natural resources due to the leakage or disposal of hazardous and toxic materials.

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Question

What is a pollutant?

pollutant is a substance such as smoke or fumes that poison or damage the natural environment and its resources.

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Question

What is an example of air pollution?

Examples of air pollution are smog, car exhaust, oil refineries, and wild fires.

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Question

What is considered water pollution?

All

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Question

Give an example of land pollution.

An example of land pollution is the illegal dumping of waste and trash.

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Question

What is meant by cheaper production cost being an incentive to pollute?

If a firm can cut production costs by dumping their waste into rivers or burying it in pits, then this incentivizes those firms to pollute rather than disposing of their waste properly.

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Question

What is acid rain?

Acid rain is rainwater that has been mixed with acids like sulfur dioxide and nitrogen oxide and chemicals like gasoline fumes in the atmosphere. It damages vegetation and waterways.

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Question

How can sewage runoff happen?

When storm drains become clogged or sewer systems become overwhelmed they overflow and the waste water finds its way into the nearest body of water.

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Question

What are 3 economic controls for pollution?

3 economic controls are legislative standards, pollution fees, and tradeable pollution permits.

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Question

How do legislative standards remedy pollution?

Legislative standards set a maximum limit of emissions that can be produced. Once that standard has been set, firms must meet it to be able to continue production.

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Question

A pollution permit would cost a company $300, and the cost of reducing its pollution is$365. Should the firm keep polluting and purchase more permits or should they reduce their pollution?

From a profit standpoint, it is more profitable for the company to keep polluting because the cost of the permit is lower than the cost of reducing pollution.

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Question

Why are low pollution taxes and fees ineffective?

Pollution taxes and fees must be high enough to where it is more profitable for firms to reduce their emissions rather than pay the pollution fees.

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Why does poor health resulting from pollution affect production?

It affects production because an unhealthy workforce cannot perform at the same level of production as a healthy one when people have to call out sick or are less efficient.

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Question

How can pollution affect agriculture?

Pollution can shrink agricultural yields because dirty air reduces a plant's ability to absorb light properly and develop into a high-yielding crop meaning the farmer's harvest is less profitable.

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Question

Which of the following is an example of a pollutant in a lake?

Oxygen

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