Government Intervention And Its Effect On The Environment Essay

In the economy, the government plays a minimalistic role and intervenes only when necessary. However, there is an issue defining the amount of government intervention which should occur. The Coase Theorem provides guidelines when dealing with externalities; government involvement is not needed when ownership of property is defined clearly, only a small number of people are affected, and bargaining costs are insignificant. In cases such as pollution, private bargaining can not remedy the negative externality, and government involvement becomes unavoidable. One type of pollution which has required the government to arbitrate is emissions because the emissions are released into the air, a large number of people are affected, and the environment is affected.
To begin with, government regulation is required because emissions are released on community property. There are many different types of emissions which are released from various sources such as power generation, responsible for about 70% of sulfur dioxide emissions, 20% of nitrogen oxide emissions, and 40% of mercury emissions released into the air (Human Health and Environmental Effects of Emissions from Power Generation). So, who is responsible? The air is not privately owned, thus no one is likely to take on the sole responsibility of maintaining its purity (tragedy of the commons). Therefore, reduction of air pollution falls on the government’s shoulders (Air Pollution). The United States Environmental Protection…