Public Good Vs Private Good

A Public good is defined as ‘a commodity which is consumed in equal amounts by everybody in a society’ (Common, 1996). The consumption of the good is not decided by an individual, but by society and taxes put on these goods (Oakland, 1972). Unlike a private good it cannot rely on safety, property rights and predictability (Kaul et al, 1999). There is a lot of debate around public goods and how as a society we monitor usage and lower the risk of a free rider problem. Where there is a public good there is the option of taking the position of a free rider, where one may not be willing to contribute to cost of production (Siebert,1995). For example, a public park is free for all to use and people may volunteer to clean it where as others enjoy

One way of doing this is by ensuring that the benefits and costs of environmental measures are well balanced (European Commission, 2015). Previously, integrating environmental sustainability and economic development was regional or local, but now it is global (Jeremic et al, 2014). There is a compromise between the environment and economic growth due to desire of high growth and excessive use of resources that eventually cause pollution in the environment. An example of this is in poorer countries they depend highly on rivers for water, soil for food and forests for fuel, due to the fact they need these natural resources desperately, they have little choice but to overuse these resources (Awan, 2013). The main question to ask here is how we can continue to be sustainable when higher economic growth leads to higher exploitation of resources (Awan, 2013). According to Jeremic in ‘The United Nations in the Age of Sustainable Development’, The United Nations will be more essential than before in having sustainable development as their critical strategy point to solve. Sustainable development has already become a crisis for every country; they face increased complex problems of energy, food and water security (Jeremic et al,

Overall the major difficulty for economic agents is how to price environmental resources and assess the correct value of the environment and the decision making process (Awan, 2013) For market based strategy it is incentive based and does not expect firms to morally choose to not pollute, but gives them economic reasons to do so. In regards to standard based measures, it sets standards for pollutions and firms and enforces this through regulation, which is costly. It is evident that the most effective measure to choose is a market based one. It will usually produce the best economic results than other systems, regardless of its faults (Field and Field, 2013). Furthermore, it is the most cost-effective system, which means it will be more welcomed from firms and governmental agencies (European Commission, 2015) Strong economic policies such as permits and taxes in market system reinforce and complement development (Awan,