First report / Royal Commission on Environmental Pollution.

  • Great Britain. Royal Commission on Environmental Pollution
Date:
[1971]
Catalogue details

Licence: Open Government Licence

Credit: First report / Royal Commission on Environmental Pollution. Source: Wellcome Collection.

    15/66 (page 5)
    16. This characteristic of pollution has three main consequences: (a) Output of goods and services which give rise to pollution tends to be pushed beyond the socially optimum point. Also, expenditure to reduce pollution will often be inadequate. This is true not only for private firms or individuals: it is true also for public authorities. For example, it is hardly surprising that a large proportion of the many sewage works in this country are inadequate, since it may well be that the benefits from better installations—in the form of cleaner effluent and hence cleaner rivers— would be enjoyed only by communities living further downstream. In such cases all the benefits are external to the sewage authority, which therefore has little inducement to improve its plant. (b) There is generally not enough incentive to reduce the amount of pollution per unit of output of the goods and services responsible, so that not enough resources and effort are devoted to this objective. For example, if it becomes cheaper to distribute milk in plastic containers instead of glass bottles, this will be done whether or not the production and disposal of plastic containers impose higher pollution costs per unit of milk consumed than does the use of glass bottles. It is true, of course, that technological innovation in some industries has reduced the amounts of pollution per unit of output; for example, the switch from coal to other resources of fuel over the last two decades has greatly reduced the amount of certain kinds of airborne pollution per unit of industrial output. But this benefit to the environment has been fortuitous; we cannot rely on technological innovation automatically to reduce environmental pollution. (c) Insofar as pollution costs are not borne by those who cause pollution or by the purchasers of their products, but by people who happen to be the victims of the pollution, some of the total welfare resulting from the economic activity of the community is being redistributed away from the victims of pollution in favour of other groups in the community. Manu- facturers whose production gives rise to pollution make greater profits than they would if they were obliged to bear the full social costs of their production, and purchasers of their goods buy them at a lower price than they would if the price had to cover the full social costs involved. Therefore both manufacturers and purchasers gain at the expense of other members of the community who may suffer in one way or another from the pollution. Pollution abatement versus other claims on resources 17. None of this implies—as is often believed to be the case—that all forms of pollution must cease. All production involves some costs, whether they are borne by the polluter or are external costs borne by others; but this is not a reason for stopping all production: £10 of external costs are no more costly to society than £10 of the normal costs of the labour or capital that are used by firms in the ordinary course of business. The fact that some pollution costs are not borne by those who make or purchase a product merely reflects the particular institutional arrangements of society. Consider, for example, the costs of purifying polluted water: these costs would be no less if sewage authorities and the users of rivers were united in some common body (as they are not at present) so that the costs