How would you talk about public goods in the following question? (1 Viewer)

[astab]

Discuss the economic concerns that the government takes into account when formulating policies to manage the environment.

It's a past HSC question. I checked the markers' comments and it said that better students addressed issues like market failure, which is a no-brainier, but public goods? This may arise from some confusion as to why public goods are an issue - is it because the government needs to provide them (in which case I'll need examples where the government has provided public goods eg. Libraries, parks in recent budgets) or is the government's sole purpose to prevent free riding (I'll need examples of how it's done that)?

Appreciate the help.

 

[Raymondo]

I've done notes on Environmental Sustainability but I haven't really looked over them afterwards- went ahead and did macro + micro. So feel free to give me some constructive criticism.

But in regards to this question-


Governments must directly intervene in the economy by providing public goods due to the notion that goods/services which facilitate negative externalities are over-produced and that goods/services which facilitate positive externalities are under-produced, due to the disregard of social benefit by both producers and consumers. (If negative externalities actually impacted producers & consumers, then the price would rise as a result of higher natural costs of production and a lower supply from private producers. On the other hand, if positive externalities actually impacted producers & consumers, then the price would also subsequently rise due to shift in demand from consumers.) Hence government's must provide public goods as a result of a lack of supply of positive-externality goods provided by private producers.

 

[Ekman]

I've done notes on Environmental Sustainability but I haven't really looked over them afterwards- went ahead and did macro + micro. So feel free to give me some constructive criticism.

But in regards to this question-


Governments must directly intervene in the economy by providing public goods due to the notion that goods/services which facilitate negative externalities are over-produced and that goods/services which facilitate positive externalities are under-produced, due to the disregard of social benefit by both producers and consumers. (If negative externalities actually impacted producers & consumers, then the price would rise as a result of higher natural costs of production and a lower supply from private producers. On the other hand, if positive externalities actually impacted producers & consumers, then the price would also subsequently rise due to shift in demand from consumers.) Hence government's must provide public goods as a result of a lack of supply of positive-externality goods provided by private producers.

You discussed about why public goods are provided by the government, but you didnt discuss how public goods are used to preserve the environment.

In terms of the question itself, it is hard to see how public goods may preserve the environment. I guess parks, wetlands and heritage sites are ways to prevent deforestation and other detrimental effects of industrialisation. Other than that I can't think of any other public good that preserves the environment