The debate among economists rages stronger then ever: whether the Coase Theorem or a Pigouvian tax works more effectively in cases involving environmental use and misuse . “Pigouvians” accuse “Coasians” of being ultra right-wing conservatives who would provide the rich and powerful with unfair advantages in the use of common or public property. “Coasians” claim that “Pigouvians” are disloyal to the fundamental economic principle that well-defined property rights always bring about the most efficient and economical use of a resource. Economists must decide which theorem or problem of how well the property rights are defined. They must also decide what, if any, are the transaction costs, and how many people are actually touched by the problem. Do some on-line research to learn more about both of these approaches to environmental concerns. Then write an ending to a story that advocates one approach over the other.
Task List
You are about to explore on-line information that will help you understand and reach some conclusions about one of the modern world’s most perplexing and serious problems. How can modern men and women provide for the needs and wants of the world’s growing population while holding destruction of our productive resources to a minimum? You will learn about two hotly debated approaches to this problem: the Coase Theorem and the Pigouvian tax method. After you have developed an understanding of these concepts, complete an ending for a story advocating one approach to successfully resolve the issue.
Read Student Handout 1, Fish Till You Drop vs. New Sense, Inc. To decide on an ending for this story, visit the following web sites and read two different opinions concerning how this pollution problem might be solved.
After you have read the articles, decide which approach would be most successful and efficient for cleaning up Lake Smiley. Write an ending to the story using the approach you support.
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