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

Monitoring any proposed legislation and regulations, Question 1: "The o...

Question 1: "The only social responsibility of business is to increase its profits" wrote Milton Friedman, Economics Nobel prize winner, in an article in the New York Times Mag

What problems are faced by developing economies, Question: Describe the...

Question: Describe the main measures of size and/or cutoff point below which economies are classed as small? In 1982 the Development Committee of the World Bank and the Int

Forestry, Normal 0 false false false EN-IN X-NONE X...

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

Uncertainties of the future and heterogeneity of agents, Introduce uncertai...

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

Public relations plan, Select a current political, social or environmental ...

Select a current political, social or environmental issue that is receiving coverage in the media, or choose an organisation you feel needs a better public relations approach, and

A model of fishery - bionomic model, Normal 0 false false f...

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

Ecommerse, #questioi hour classn..

#questioi hour classn..

Uses of revised indicators of national wealth, Normal 0 false ...

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

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

Theory of optimal tax system is relevant for tax policy issue

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