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Government failures in environmental economics, specifically the inefficiencies introduced by poorly designed tax and subsidy schemes. Various types of policies, including economic development, trade protection, cost of living, and infrastructure, and explores how subsidies and price interventions can distort resource allocation. The document also highlights that price subsidies may not always be inefficient, as they can correct externalities.
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Government policies that increase the total external cost in private markets (i.e. Increase total environmental damage)
Where government action itself introduces inefficiencies
Pp 144-
Pooly designed tax or subsidize schemes may distort the allocation of resources in unintended ways.
Economic development policies
Trade protection policies
Cost of living policies
Infrastructure policies
Environmental policies
Subsidies Price of inputs (e.g. irrigation water)
Taxes (e.g. oil depletion allowance)
Subsidized Credit
Low prices on natural resources—e.g. Grazing fees on western rangelands
Subsidies of prices of domestic products
E.g. Sugar prices
