Flaws in conventional system - representation, Public Economics

Flaws in Conventional System - Representation

The measures like GDP and, NDP do not adequately represent the degradation of environment. Sometimes the expenditures incurred in restoring the environmental quality are accounted as increases in national income and product. For example, cleaning up of rivers, treating water for drinking, preventive expenditures to protect from ill effects of pollution all are shown as increases in GDP.

Thus, we see that the conventional/traditional system of national accounting implies that the environmental assets like air and water may be degraded due to economic activity, resulting in a reduction in social welfare. However the corresponding adjustment is not made in the accounts. This gives a false impression of increase in income while natural wealth is reducing. Further, ignoring the contribution of non-market value of environmental goods and natural resource depletion would result in misrepresenting the current well-being and would distort the economy's production and substitution possibilities. Thus the current measures of national income are inadequate as indicators of social welfare.

Moreover, these provide misleading information about whether an economy is using its resources in a sustainable manner. Thus the policy-makers are not rightly informed on the important link between economic growth and the environment. Hence environmental accounting can be useful in removing the current biases.

 

Posted Date: 12/18/2012 1:49:05 AM | Location : United States







Related Discussions:- Flaws in conventional system - representation, Assignment Help, Ask Question on Flaws in conventional system - representation, Get Answer, Expert's Help, Flaws in conventional system - representation Discussions

Write discussion on Flaws in conventional system - representation
Your posts are moderated
Related Questions
Case for the Market   With  the objective of maximising total value of output  focused on  observing real  factors of production, through the  logical  'tool  of marginal produ

Public Finance was always dealing with intervention through fiscal instruments, including federal relationships between different tiers of governments and later on it subsumed Publ

Question: (i) There are certain benchmarks for measuring the success of infomercials" what are those benchmarks in relation to the value of a product or service? (ii) It i

The essence of a national boundary is separate the ‘self' from the ‘other'. Thus natural boundaries, like all institutions have their own set of internal rules which govern their

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


Question 1: ‘Public Relations professionals must understand how public opinion is formed, how it evolves from people's attitudes, and how it is influenced by communication.' D

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

which fallacies best diiscribe this statement The restaurant in new is either buddy''s bistro or Clyde emporium

what is volume of production and the factors influencing them