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
(1) The federal government is considering selling tracts of federally owned land to private developers and using the revenues to provide aid to victims of an earthquake in a foreig

U=4X+G where X is private spending and G is public spending. what is the marginal rate of substitution between public and private


Pigovian Analysis   The starting point of the Pigovian welfare analysis is the notion that there  is a resource allocation  problem  that can be  optimally  solved. Through  hi

Q. What do you understand by Policy Process? Begin from theoretical frame work of policy making and proceed breaking various assumptions and introducing heterogeneity of agents

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

3 voters, A, B, and C, will decide by majority rule whether to pass bills on issues X and Y. Every of the two issues will be voted on indiviually. The change in net profits (in dol

An economy has two agents and two goods. Utilities are given by UA=min{xA,0.5yA} and UB=min{xB,0.5yB}. The total amount of X in the economy is 10. The total amount of Y is also 10.

Introduce uncertainties in attainments of policy outcomes, winning of elections, optimistic and pessimistic expectations of agents and relate it to various adjustments and converge

Q. Who permits government whatever it does? The simple answer can be: people in a democracy and the monarch/dictator in a monarchy/dictatorship. But neither monarchy exists in