The dumping of your nuclear waste into the pond turned out to, uh, not be such a good idea. Those glow-in-the-dark fish and the three-headed snakes that crawled out of it were interesting...until they turned on you and made you dinner.
If you pollute into waters, and you get nailed, the government has a particularly bad slot for your in the courts (huge liabilities with treble, or 3x liabilities as a warning shot to others to not mess with Flipper). Jail time with Bubba comes after you run out of money with which to defend yourself.
So...give a hoot; don't pollute.
Related or Semi-related Video
Econ: What are Property Rights and the R...6 Views
And finance Allah shmoop What our property rights and the
rule of incentives to finding property rights can sometimes help
groups of people solve problems Property rights are the rights
of legal ownership of a certain resource or property like
when you own a tree one that's throwing shade onto
another property Well that's legal shade throwing from one neighbour
to another The shade is an example of what we
call an externality to side effect from one party's activity
that affects another If the shade is considered a bonus
well nobody likes skin cancer you know Then it's a
freebie something they didn't pay for but are glad to
have Anyway I eat It's a positive externality If the
shade is considered a problem by the neighbour like go
well if they want to get their tan on well
then it would be considered a negative externality Well we
usually focus on negative externalities since people don't like them
A common example of a negative extra analogy in economics
runs when factories pollute nearby residential areas whether by making
the air quality horrible or leaking chemicals into ground water
which results in early deaths and dork while jaw dropping
medical bills and all kinds of other sadness Well positive
externalities air important too since they can result in moochers
mooching hard core If you've ever put more than your
fair share of work into a quote team unquote project
you know the drill You work hard only to see
other people than taking credit for work they didn't do
We call this the free rider problem where one group
gets benefits without paying any expenses or costs for those
benefits which fall on someone else You know we've all
been there on one side or another negative and positive
externalities both cause what we call dead weight loss which
measures how inefficient things are for society We prefer no
dead weight loss which would mean that everyone's paying for
what they're getting People who have to deal with negative
externalities would get paid for those externalities and people with
positive externalities would pay for the freebies they're getting When
it's clear what belongs to whom It's easier to work
out externality problems like the problem of the Chocolate River
use in Willy Wonka's Chocolate Factory Let's break it down
One group of people Loompas Chako Loompas make chocolate which
requires the Chocolate River Another group of Oompa Loompas Gobstopper
Loompas used the chocolate river for Transportacion Will the Chako
Lupas don't like that The Gobstopper Loompas are using the
river since they're polluting it that pollution is a negative
externality for the Chako Loompas Well the Chaka Loompas feel
like they were minding their own business Just making chocolate
you know that you eat And then the Gobstopper Loompas
just started polluting the river Well they have to take
extra time now in money to clean the pollution out
of the Chocolate River which they don't think is fair
Another reason that Chaka Loompas are mad is that the
Gobstopper Loompas are just using the river as transportation for
free Where the Chaka Loompas CIA Free Rider Problem The
Gobstopper Loompas CIA positive externality As long as nobody says
anything Polluters air incentivized to keep pollutant without paying for
it and moochers r incentivized to keep on mooching At
the Opal Opal lunch all things got tense before violence
broke out One Loompa Loompa who works with the squirrels
said You guys should just property rights so Mr Wonka
doesn't have to get involved again And that's just what
they did the belugas All agreed that the Chako Loompas
should have the property rights to the river and that
the Gobstopper Loompas should hey to use and well to
pollute the river The fees paid went towards paying for
the pollution filtering of the chocolate River I eat that
negative externalities The fees accounted for them using the river
as a positive externality too Since the Gobstopper Loompas had
to actually pay to use the river Now they were
more conservative with how they transported their gobstoppers resulting in
less pollution in the river for the Chaka Loompas toe
filter out as well as well the money to pay
for it resulting in an efficient market outcome This is
an example of how private property rights can solve externality
problems without public solutions and all kinds of congressional mandates
needed for public solutions are government interventions like the popular
cap and trade thing For example the idea that you
can internalize an externality with property rights and no need
for government intervention is thanks to Nobel Prize winner and
very smart human being Ronald Coast the coast there um
under the coast here um it doesn't matter to whom
property rights are assigned as long as they're assigned to
someone If they are then poof gnome or externalities Well
unfortunately the Coast serum of setting property rights to get
rid of things like negative externalities doesn't always work For
instance it's easy to assign property rights to a river
But what about to the air Well pollution start small
than spreads all the way across the globe No one
owns all the air so yeah it's a problem This
is what we call the assignment problem when it's hard
to ask Sign property rights to a thing There's also
something called the holdout problem Well what if some of
the Temple Loompas were stubborn and couldn't reach an agreement
on what to do when there's shared ownership There's the
potential for someone in the group to hold out because
they disagree with everyone else Congress Sorry just coughing Excuse
me There's something else that happens sometimes when you try
to use property rights to fix things transaction costs and
negotiation issues right Well the Coast theory assumes that negotiating
doesn't cost anything Big corporations might have the time and
money to go through court to settle disputes about the
pollution they're doing and not paying for But families don't
Which is why class action lawsuits are ah thing Transaction
costs are rial and can be a serious barrier when
there are problems You know like the assignment problem the
holdout problem and too high negotiation costs Well we turn
to public solutions than over private ones to solve those
externality issues If only things were as simple in the
real world as they are in Willy Wonka's chocolate factory
life would be better provided you keep away from the 00:06:06.407 --> [endTime] squirrels Of course Yeah they'Ll get you
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