Question

Are economists typically more concerned about the limits to growth imposed by environmental degradation or those imposed by resource scarcity? Explain, noting the role of negative externalities (costs imposed by individuals or firms on others without the requirement to pay compensation), in your answer.

Short answer

The economists will consider environmental degradation to be the primary cause of concern about limits to growth compared to resource scarcity as environmental degradation causes negative externality.

Step-by-step solution

Reason for giving environmental degradation as the first priority by the economists

The economists will be more concerned about environmental degradation than resource scarcity because over usage of resources can be controlled by escalating the price of the raw materials and final goods, which is not possible with environmental degradation.

Environmental degradation reduces the quality of the environment, and this is harmful to all the creatures on earth, including humans. Thus it can be considered as causing negative externalities.

Resource scarcity can be controlled by some alternatives or advanced machines, which can lessen the use of resources and cause no harm to any creature. Negative externalities from multifarious pollution activities can affect humankind, so economists must develop advanced methods to control environmental degradation.

Another reason the economists prioritize controlling environmental degradation is that the companies pay almost no heed to the harm they create upon the environment. Instead, they are mostly concerned about developing technologies to incur low costs behind resources.