Explain how the opportunity costs of negative environmental impact are high.
The opportunity costs of negative environmental impacts are high due to the reversal of supply-demand relationship for environmental resources.
In earlier times, the demand for environmental resources and services was much less than their supply. Pollution remained within the absorptive capacity of the environment, and the rate of resource extraction was less than the rate of regeneration. Hence, environmental problems did not arise.
However, with population explosion and industrial revolution, the demand for resources for both production and consumption exceeded the rate of regeneration. The pressure on the absorptive capacity of the environment increased tremendously. Today, there is increased demand for environmental resources but their supply is limited due to overuse and misuse. This makes the opportunity costs of correcting environmental damages very high.
Explanation
The answer draws directly from the textbook context which explains how the supply-demand relationship for environmental resources has reversed over time. The context clearly states that earlier, demand was less than supply and pollution was within absorptive capacity. But with population growth and industrialization, demand exceeded regeneration capacity, creating pressure on the environment. The opportunity cost is high because correcting this damage requires significant resources and effort when supply is already limited due to overuse.
Solution Steps
Step 1: Explain the earlier situation where demand < supply and pollution was within absorptive capacity
Step 2: Describe how population explosion and industrial revolution changed this balance
Step 3: Conclude with the supply-demand reversal making opportunity costs high