Theory of environmental policy, Public Economics

Theory of Environmental Policy

The neoclassical economics mainly deals with efficient allocation of resources through market mechanism. In the production process, in addition to the private (or public) good, public 'bad' also emerges in the form of solid, liquid, gas or noise pollution. For example, when production of cement takes place, there is emission of dust and harmful chemicals into the atmosphere. Neoclassical theory with its emphasis on market mechanism takes care of the production of cement (in this case) but ignores the management (production, pricing, control) of air pollution arising out of cement production. Public bad is produced not only during production activities but also in the course of consumption. For example, when we consume packaged food, we throw away the polythene cover (which is not biodegradable) here and there as a result of which land pollution takes place. The management of public bads is beyond the scope of the neoclassical analysis and therefore is usually ignored.

The main reason behind environmental problem is 'market failure'. Market failure in the case of environmental problems arise mainly due to lack of

i) Well defined property rights

ii) Proper valuation of 'public bad'

The problem of property rights will be further dealt with the management of common property resources (CPR). In the present Unit we concentrate on the issue of the divergence between social and private costs and the methods available in the literature to internalize the externalities, that is, development of mechanism through which the social cost of pollution will be borne by the polluters.

Posted Date: 12/18/2012 6:03:05 AM | Location : United States







Related Discussions:- Theory of environmental policy, Assignment Help, Ask Question on Theory of environmental policy, Get Answer, Expert's Help, Theory of environmental policy Discussions

Write discussion on Theory of environmental policy
Your posts are moderated
Related Questions
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Theory of optimal tax system is relevant for tax policy issue

Characteristics of IS Curve

The monetarist and fiscal controversy is still on. The recent history of the U.S. looks like a success story of the monetarists; but besides pure luck, it involved strong element o

what are the strengths and limitations of a pluralist society

Rules concerning disclosure of information and accounting change behaviour but only be drawing attention to certain facts. In the area of environment, Health, epidemics, and other

The purpose of this assignment is to provide you an opportunity to enhance your skills related to use of APA format to cite references and selection of research articles most relev

Sustainability, more recently referred to as ‘sustainable development', came from the idea of integrating economic development and environmental protection. The concept is based on

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

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