Advantages of mbis, Public Economics

Advantages of MBIs

There are several advantages of economic instruments such as:

i) These are efficient in allocation of resources;

ii) They provide incentives for innovations in clean technology;

iii) They are more appropriate when policy emphasis is shifted towards a preventive measure,

iv) They can be an important source of revenue for the government.

In fact, the MBIs are considered to provide 'double dividend', in the sense that they control pollution on the one hand, and generate revenue on the other. The revenue generated through MBIs can further be utilized for environmental protection.

In order to achieve the objectives, MBIs use the market system to evolve two kinds of policy measures such as

i) Administered price, and

ii) Administered market.

In the case of administered price, existing price of polluting good is modified through policy measures to include the social cost of environmental degradation. In this situation obviously, environmental valuation quires special significance in advocating the administered price concept. Hence, administered price either creates price or modifies the existing price to reflect the environmental impact. Similarly, administered market creates a market for environmental pollution, which did not exist before. Tradable permits are the best example for this concept as it creates market for 'pollution abatement' (that is, removal of pollution) through emission trading. The flexibility of MBIs is reflected through selection of appropriate technology for pollution control which minimises cost of compliance but, without any interference of the regulatory authorities.


Posted Date: 12/18/2012 6:53:51 AM | Location : United States

Related Discussions:- Advantages of mbis, Assignment Help, Ask Question on Advantages of mbis, Get Answer, Expert's Help, Advantages of mbis Discussions

Write discussion on Advantages of mbis
Your posts are moderated
Related Questions
privatization can always decentralise economic power. critically discuss

what could I write for pharigraph 2 on why a bully bullies

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Q. Show the Redistribution Policy? We know that despite policy interventions the disparity of income has been increasing in nearly all the countries. United States is highly un

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

study guide for Magruder''s American Government. the tests are supper hard

The most significant area or tool for making a suggestion to a journalist or media is the press release, which is more available these days. One has to put, a press release is a ps

There has been a long history of research on ‘the policy process' which is ‘closely connected to efforts to examine the nature of power in society and to specify the necessary cond

Case for Improving upon the Market System   Unlike the "optimistic followers"  of the "classical school" who believed  that markets  would  "natural!yn  or "automatically" prod

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4