Industrialization has made America one of the greatest superpowers in the world. But that economic growth and prosperity has come at a price. In the early days of the Industrial Revolution in America factories spewed millions of tons of pollution into the air. With the advent of air quality standards in the United States this industrial pollution has been significantly reduced.
1-Do the economic benefits of industrialization outweigh the economic costs?
It is a known fact that all industrial activities impact the environment adversely. It means that there is an environmental cost of every industrial activity; however, some industrial activities have environmental/economic costs, whereas other activities have smaller environmental/economic costs. For instance, Fast Fashion Industry is considered one of the most pollution producing industries. Similarly, the transport industry also produces enormous pollution; therefore, such economic activities have high economic/environmental costs. Studies reveal that the process of industrialization (expansion of industry) and industrial processes are the cause of the environment’s deterioration; however, the benefits of industrialization outweigh economic costs in the short run.
In the long – run, the economic costs (environmental and economic), of unmethodical industrialization and faulty industrial processes are immense. For instance, when the industry does not internalize a negative externality, it does not produce an output that is socially optimal. When firms are not producing socially optimal output, they recklessly employ resources and ignoring environmental deterioration.
3-Are there examples in place today of manufacturers and retailers who have taken steps to reduce their pollution impact, both air quality, and industrial pollution, on our environment while maintaining a viable place in the markets in which they compete?
In recent years, awareness regarding health and the environment (both subjects are related), has grown exponentially. People understand that pollution is undermining human survival and growth of human civilization. This concern is also reflected in the global population’s consumption pattern. Therefore, many firms have begun to address these concerns by emphasizing their production processes. Also, firms are projecting or advertising their rational behavior and delivering of Corporate Responsibilities, to increase their corporate prospects (Lee, 2013). Studies reveal that consumers tend to buy more from those firms, which they consider honest (Halo Effect). Also, strong environmental policies have also played a significant role in appropriating behavior of firms and pushed them to produce at a socially optimal level (The Economist, 2015).
It is essential to understand that firms have evolved their systems to remain competitive and low pollution companies/firms at the same time. In some cases, firms have used Halo Effect to remain potent competitors and low pollution producing firms simultaneously.
References
Lee, W. (2013, May 2). Companies spend millions to reduce air pollution. Retrieved from http://www.scpr.org/news/2013/05/02/37107/companies-spend-millions-to-reduce-air-pollution/
The Economist. (2015, June 25). The halo effect. Retrieved from https://www.economist.com/business/2015/06/25/the-halo-effect
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