We are experiencing devastating effects on the planets water supplies, as more and more water stores are used up or diverted as a part of intensive farming procedures. Waste disposal is becoming a problem worldwide, and our oceans are slowly but surely becoming a giant waste disposal pit. It is estimated that over half of the plastic produced every year is single use – this means that it is used once, and then either thrown into landfill or finds its way into the environment. According to scientists, up to 12 million tons of plastic enters the ocean every year, forming giant floating garbage patches all over the world ⁵ .
The usual economic analysis of externalities can be illustrated using a standard supply and demand diagram if the externality can be valued in terms of money . An extra supply or demand curve is added, as in the diagrams below. One of the curves is the private cost that consumers pay as individuals for additional quantities of the good, which in competitive markets, is the marginal private cost. The other curve is the true cost that society as a whole pays for production and consumption of increased production the good, or the marginal social cost . Similarly there might be two curves for the demand or benefit of the good. The social demand curve would reflect the benefit to society as a whole, while the normal demand curve reflects the benefit to consumers as individuals and is reflected as effective demand in the market.