Environmental Policy

  • Brian Harvey
  • John D. Hallett
Chapter

Abstract

If environmental problems are the result. of resource misallocation, the spotlight of potential reform falls most obviously on the decision-making processes. Where are the decisions made and on the basis of what information? If, as in the case of the externalities described in chapter 5, relevant information has been left out pf account, a ready solution suggests itself. It should be possible to influence the decision by modifying the information which is fed into the decision-making process. The term ‘information’ is interpreted widely here. In a market economy, taking the business enterprise as the major source of resource allocation decisions, the market prices of labour, materials and finished products clearly constitute relevant information. According to market theory these adjust automatically to reflect changing supply conditions and consumer preferences. These price signals could be modified by the introduction of taxes or subsidies. But prices represent information only in the most obvious and narrow sense. Decisions, even in an era of computers, are not taken by calculating machines. They are the outcome of the behaviour of people in the context of a legal, social, institutional and cultural framework. Modification of this framework could take various forms: appeals to save energy, new regulations on pollution, changes in the law relating to property rights, and so on.

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Copyright information

© Brian Harvey and John D. Hallett 1977

Authors and Affiliations

  • Brian Harvey
    • 1
  • John D. Hallett
    • 2
  1. 1.Department of Adult EducationUniversity of NottinghamUK
  2. 2.Department of EducationTrent PolytechnicUK

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