ECONOMIC WISDOM FOR BABIES # 8
ENVIRONMENT: ‘WANT TO LIVE? THEN, YOU GOT TO USE IT!’
W.A. Wijewardena, Deputy Governor, Central Bank of Sri Lanka
young people, both girls and boys, were in full spirits. “We‟ve to protectour environment at any cost. Otherwise, we all are doomed” They cho
rused after they had joined the Action Group to Protect Environment.They were all waiting for my endorsement of their action. The way they werestaring at me indicated to me that I should join their cause and fight along with them.Perhaps, unto our death!
I waited for sometime and said “Kids, you‟re both right and wrong” My response
appeared to have puzzled all of them, for they were now staring at me with eyes bulgingout of their sockets.
“We can‟t understand you” They chorused once again.
correct when you say that we all are doomed if our environment is
destroyed” I said. “But, when you plan to do it
at any cost
, you‟re wrong”
That response would have puzzled them more, because they were all waiting for alonger explanation.
“Look” I said. “for us to live we have to use all types of goods and services. Then,
those goods and services have to be produced and made available to us. Since thosegoods and services increase our happiness, we can really call them
are desired by us. But, along with the production of those
something undesired by us as well. That constitutes the waste matter that‟s produced as
an inevitable by-product of
Since the waste matter is undesired and reduces ourhappiness, economists call it
always come with
package. So, we can‟t reject
and accept only
If we do so, we have to reject
“So, what‟s your point?” One of them inquired.
I continued. “
You may wonder how
come together. Take a very
simple example like breathing oxygen. It‟s necessary for our life. But, it also produces an
undesired by-product or a
called carbon dioxide. If somebody prohibits us to producethis
then, we can‟t take oxygen as well. So, it‟s inevitable”
“You still didn‟t come to your point” Another one pointed out.
“Be patient till I explain” I said again.
which is undesired can‟t be keptwith us. It has to be dumped somewhere and we‟ve to find a dumping grou
nd for that
purpose. It‟s the environment which is used as this
. Every one of us hasto use environment to dump the waste matter that we inevitably have to produce when weundertake any economic activity like producing, distributing or consuming. So, werelease all gases and heat to the atmosphere, liquids to waters and solids to the earthitself. Hence, environment h
as to be necessarily used, if we‟re to enjoy all those good
things in life. As a result, environment is considered as the
fifth factor of production
without which no economic activity is possible”“Fifth factor of production?” They exclaimed. “Like other factors?”
“Yes, like other factors, but with a difference” I explained. “In the case of other factors, there‟s an owner who h
as the property rights to sell those factors in the market ata price. So, the user has to pay a price and it dissuades him to use it excessively. As a