Question

Correction for environmental damages involves opportunity costs. Explain.

Answer 1

1. Opportunity cost is the cost of the next best alternative that is sacrificed when a choice is made.
2. Correction of environmental damage involves a high opportunity cost because the government has to spend large amounts of money on finding cleaner and more efficient alternatives.
3. Heavy use of renewable and non-renewable resources also creates the need to search for alternative resources, which requires large investment.
4. The introduction of CNG in Delhi to reduce air pollution is a good example.
5. The government had to spend heavily on promoting CNG, developing the required facilities and creating awareness among consumers.

Therefore, correcting environmental damage involves a high opportunity cost because resources that could have been used for other purposes have to be spent on pollution control and environmental protection.