Recently there has been much controversy over the subject of sewage spills into the Springs' main watershed, Fountain Creek. The creek which runs north/south through the entire city, along I-25, has been affected by Colorado Springs Utilities accidental leakages of raw sewage into the creek. The utilities company has been fined and urged to address the issue as soon as possible and been mandated in some instances to take immediate action fixing the problem areas. However, a recent development in the issue has taken an interesting turn.
In order to deal with the water pollution in the creek, the utilities company has proposed that a giant inflatable dam be utilized in order to effectively stop the sewage. This investment for the city will cost the utility users an average of 25 cents a month on the wastewater bill. My question is in regard to the inefficient internalization of the pollution externality. When a company takes the full responsibility for the pollution, they would normally take care of the cost. How is it that the cost associated with this preventative action is passed straight to the consumer? Would it not just be easier to tax the users directly rather than the transfer of payments from the builder to the utility company and then to the users? It may be my naivity as a Jr. Economist, but it would seem that the cost associated with the pollution should be taken care of by those primarily responsible for it, not those who simply utilize the services.