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Outline and assess the extent to which market-based policy instruments provide effective solutions to public policy problems. Provide reasons for your answer and draw on policy developments in at least TWO policy domains - Essay Example

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One of the criterions used for instrument assessment involves relative efficiency that represents the degree to which instruments…
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Outline and assess the extent to which market-based policy instruments provide effective solutions to public policy problems. Provide reasons for your answer and draw on policy developments in at least TWO policy domains
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Extract of sample "Outline and assess the extent to which market-based policy instruments provide effective solutions to public policy problems. Provide reasons for your answer and draw on policy developments in at least TWO policy domains"

Download file to see previous pages Some of the primary market-based instruments considered include taxes as well as tradable permits. In real essence, command-and-control regulations condition firms to bear responsibility on identical shares of the burden through the use of uniform standards for firms. In this case, the most common regulations are technology-based and performance-based. Such command-and-control regulations lead to freezing and development of technologies that result into greater levels of control (Mulholland, 2008).
Market-based instruments offer potential advantages for environmental policy makers compared to traditional command-and-control approaches. Some of the advantages include cost effectiveness as well as dynamic incentives for technology innovation. Market-based instruments leads to implementation of desired level of pollution clean-up at lowest possible cost. Communities within different regions at some point experience environmental challenges depending on their sensitivity towards sustainability (Stavins, 1991; Bovenberg and de Mooij, 1994). Sustainable status is possible when the ability to maintain stocks of renewable resources is improved. The extraction level should not exceed the levels of regeneration. In most instances economic growth is dependent on sustainable development since GDP normally depends on natural capital. Decrease in the availability of resources prevents anticipated growth of various economies meaning that sustainable development is a prerequisite to economic growth. The changing interest of consumers is also one of the good indicators revealing necessity of sustainability within economic growth (Figge, 2005; Stavins, 1996).
In this case, sustainability considers conditions through which countries view production and manufacturing processes in relation to products that leads to increased production based on responsibility. ...Download file to see next pagesRead More
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