Flaws in conventional system - representation, Public Economics

Assignment Help:

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.

 


Related Discussions:- Flaws in conventional system - representation

What is the optimal tax rate, Jack and Jill live alone on  an island. Their...

Jack and Jill live alone on  an island. Their labour supply schedules are  identical and given by L = (1 - t)w, where t is the income tax rate and w denotes the wage. Jill's wage i

Economic system, how do a traditional economy, a market, a centrally planne...

how do a traditional economy, a market, a centrally planned economy, and a mixed economy differ?

Sttages and various coordination mechanisms involved, stages and various co...

stages and various coordination mechanisms involved in policy processes..

Summary of environmental policy, Normal 0 false false false...

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

Annotated bibliography guidelines, The purpose of this assignment is to pro...

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

Improvement in seea over the sna , Normal 0 false false fal...

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

Opportunity cost of everything increase, Earlier than the Civil War, the So...

Earlier than the Civil War, the South graded with the North and with England. It sold cotton and bought manufactured goods and food. Throughout the war, one of Lincoln's first acti

Indifference curve, eiplain why indifference curve are convex to the origin...

eiplain why indifference curve are convex to the origin

#titlTaxation, Theory of optimal tax system is relevant for tax policy issu...

Theory of optimal tax system is relevant for tax policy issue

Show the traditional decision analysis, Q. Show the Traditional decision an...

Q. Show the Traditional decision analysis? Traditional decision analysis rests on the key assumptions about the type of information available to the decision maker. Powerful B

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd