Government, Public Policy, and Sustainable Business

Key Takeaways

• Market failures can justify government intervention.
• Private market failures related to sustainable business that government tries to address are externalities.
• Market failure correction efforts are the most relevant justifications for public policies that address sustainability.
• The absence of property rights for the atmosphere and environmental resources leads to externalities and market failures. While property right assignment to a public authority can help to restrict use and overcome the absence of property rights and the market failure, it often comes with significant costs.