Using the items on the survey that are of concern to the citizens, ask students to make suggestions on what the City Council might do to ensure that the new resource recovery plant does not have a negative impact on the community. Indirect or spillover costs that occur in our daily lives such as the example with the orange peels in the classroom often require no need for government intervention to correct the problem. However, some problems such as air and water pollution may require government action to reduce the indirect or spillover costs involved. Government uses essentially regulation, taxation and subsidies to reduce indirect or spillover costs. Regulation, passing laws, is the most common means used to correct indirect costs.
Government can also tax the business creating the indirect cost.
However, a tax may be used to help a business purchase special equipment to eliminate indirect costs. A community's tax dollars are used to provide subsidies that cause an increase in tax expenditures. Have students compare their recommendations with those of the president of city council as listed on the handout. The president's comments are just some of the methods that can be used to reduce indirect costs involved with locating the plant in Hazelton. Students will suggest others.