What are the cost of lowering?
The cost of a reduction is the price that the company has to pay to deal with the damage it caused during the business. A common example is the costs associated with the installation of a trap for capturing pollutants in the factory so that they are not released into the environment. Another form of reduction costs may be the cost of soil rehabilitation when the factory is closed. The cost of reducing can increase business costs and can be handed over to consumers in the form of higher products that require further reduction. One of them is to remove the negative by -product of production or business, such as in a hospital where Biohazard material is collected and safely destroyed. The second approach is to reduce the production of negative by -products in the first place. Sometimes it's just no possibility; For example, the hospital cannot reduce the amount of biohahazard waste produced by Because this is an integral part of the services it provides. However, the hospital could install a timeA more inner incinerator, so if it needs to do less pollution, it causes less pollution. Both options come with the cost of reducing the problem of solving the problem.
things such as pollution that is generated in the process of operating the factory is called negative externalities. At the end of the 20th century, the growing number of governments began to put pressure on society to encourage them to reduce their negative externalities. This caused a reduction in the cost of reducing because businesses had to develop methods for dealing with negative by -products in the field of business. In addition, some governments have begun to collect what is sometimes called a Pigovian tax, a tax selected for negative externalities.
Such taxes are designed to penalize companies for the production of negative externality and reward them for a reduction. For example, a company may be taxed by the amount of carbon dioxide that it emits into the environmentannually. If the company can reduce carbon dioxide production, the tax will be reduced. Companies analyze their marginal cost of reduction, the cost of preventing the production of one unit of negative externality, such as Tuna CO2 to determine whether it is more cost -effective to decrease or disappear on reality.
The cost of marginal reduction is followed by a curve. In the beginning it is usually cheap and easy to reduce pollutants and other negative externalities. Over time, however, it is increasingly expensive to reduce one unit of negative externality. As a result, it may be more cost -effective for society to focus more on removal than a reduction.