This topic was mentioned last week on the Tutor2u blog and is very relevant to NCEA Level 3 and Cambridge A2 Economics courses.
The Maya Train is a 1,525-kilometre intercity railway in Mexico that traverses the Yucatán Peninsula. Construction began in June 2020 and the Campeche-Cancún section began operation on December 15, 2023, with the rest of the line to open later. The project aims to connect tourist destinations in the Caribbean with lesser-known sites inland, including historic Mayan sites from which it derives its name. Its construction is estimate to create 715,000 new jobs by 2030 in the 16 municipalities where the stations will be constructed. Economic growth will double around the route and the UN-Habitat predicts that poverty will contract by around 15% by 2030.
However, protestors have warned that the scheme will cause serious environmental damage, particularly along part of the route that runs though the Calakmul biosphere reserve, a Unesco world heritage site, where ancient pyramids erupt through the forest canopy. More than 100 species of mammal inhabit the forest, including the most important jaguar population in Mesoamerica, 398 species of birds and 84 reptiles, some at risk of extinction. Almost 3,000 households living along the route have been displaced.
- When there is a negative production externality, marginal social cost (MSC) exceeds marginal private cost (MPC), as in Figure 1.
- Firms take decisions on the basis of MPC, so the market settles at Q1, rather than at Q*.
- The shaded area represents the welfare loss for society in this position – i.e. the damage to the environment, species of mammals and the displacement of households. This is not reflected in the costs faced by the building of the railway.
Below is a video from the BBC on the project and its impact.
Source:
ECONFIX 