Thursday, March 02, 2017

Power or soft drinks?

Trade-offs are inevitable whenever factors of production are in short supply. Because the same factor of production can be used for making different items, we have to decide which items are to be produced.

Summer of 2017 is predicted to be sizzlingly hot. Water has already become scarce in many parts of Tamil Nadu. A petition was filed in the Madras High Court that in view of water famine the co-packers of PepsiCo and Coca-Cola must not be allowed to draw water from the Tamirabarani river. The court in all its majesty has held that the soft drink co-packers cannot be denied water supply. These packers together consume nearly 15 lakh litres of water every day.

At the same time, the Tuticorin Thermal Power Station is already partially closed because of paucity of water. Stoppage of entire power production is imminent if adequate water is not made available. It would make economic and ethical sense to prioritise consumption of water by farmers and electricity producers over consumption by co-packers of soft drinks.

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