Friday, February 29, 2008

Solving Environmental Problems

This arises out of a discussion (more an agreement) I had the other day with one of my tutors...

The fundamental problem with the environment is that people usually act in their own interests. If there is a publically available resource (for example, air or the sea), then costs caused by damage to that resource are shared between everyone, but benefits arising out of use of that resource belong to the person who used it. Hence cost/benefit analysis for any one individual or small subgroup (e.g. a country) tends to be skewed towards exploitation of the resource.

In order to prevent such environmental problems happening, we need to find a way of making the personal interest of the individual coincide with the best interests of humanity, as Adam Smith nearly did with capitalism where the interest of the individual coincides with the wealth of society as a whole, which is why it is such an effective way of making countries richer. And in the case of states such as China, we need to find a way to make the best interests of the government coincide with the best interests of humanity.

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