Assume that the production of cement also produces a substantial amount of air pollution and that a technology is available

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QUESTION:

Assume that the production of cement also produces a substantial amount of air pollution and that a technology is available that can lower the pollution but with somewhat higher production costs for the cement. Because of the availability of raw materials in Lindertania, it produces large amounts of cement, and its exports supply most demand in Pugelovia. But the air pollution from Lindertania’s production blows into Pugelovia. Causing a noticeable deterioration in Pugelovia’s air quality. Although Lindertania suffers some harm itself from this air pollution, it does not now have any policy to reduce the pollution. The Pugelovian government wants to address this air pollution problem.

a. If the two countries’ governments cooperate, what is the best solution to address to problem? Explain.

b. If Pugelovia must come up with a solution on its own, what should the Pugelovian government do? Explain.


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