Campaigners criticise frequent use of storm overflows when parts of the country were in drought for months
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Scooped by
Graham Watson
onto Microeconomics: IB Economics March 26, 10:56 AM
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Evidence of the extent to which the UK's water companies are responsible for generating negative externalities, with news that there were nearly 300,000 sewage pollution incidents last year, albeit that's a reduction on the previous year. The companies will claim that they are investing record amounts into stopping this sort of thing; however, if I were caught emptying my rubbish bins into your garden I'd be liable for criminal prosecution.
Economics is all about incentives, and yes, I accept that the equilibrium level of sewage spills isn't zero; it occurs where the marginal cost of investment in the sewage network equals the marginal benefit. However, stiffer penalties for water company executives would focus the mind slightly more, I feel.