Answer to Question #165850 in Macroeconomics for Dimakatso

Question

Consider the case of a chemical plant that discharges polluting waste into a river. Further downstream, this water is used for irrigation purposes by a group of farmers. Thereafter it flows harmlessly into the sea, where the pollutants are quickly dispersed. Which of the following would constitute appropriate intervention(s) to deal with any potential economic externalities?

Answer 1

Agriculture, despite being the single largest user of fresh water resources has become a victim of water pollution over the years. Sources of water tend to contaminate crops, and transmit diseases to consumers.

Measures aimed at dealing with potential externalities include;

• Education of communities about pollution impacts on the overall agricultural economy
• Proper sewage disposal from human settlement and of manure produced by intensive livestock breeding in order to prevent consumers from contamination by agricultural products
• Establishment of physical, chemical, and biological water quality criteria for agricultural water users, and for marine, and riverine ecosystems.