The leather tanning industry in Kanpur, India, is estimated to process over 50 million hides each year, employing more than 250,000 people directly. Global and domestic demand for leather goods continues to rise. However, the tanning process releases large volumes of untreated toxic chemical effluent, including heavy metals like chromium, directly into local waterways and the Ganges river. This toxic runoff contaminates agricultural soil and drinking water, causing severe skin ailments, agricultural yield losses, and long-term health complications for local residents, particularly young children and the elderly.
With reference to the information provided and your knowledge of economics, assess the extent to which the costs of tanning leather in Kanpur are external costs.
