Extract F (Lines 4 – 5) Suggests That Public Goods Such as Flood Defences Have to Be Paid for by Somebody. Evaluate the View That the Provision and Maintenance of Flood Defences Should Be Paid for Solely by the Government.

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Government intervention is need when there has been a market failure due to a misallocation of resources. The government intervention is imposed to try and fix the negative externalities produced from the consumption or production of a good or service. In this case the market failure is resulting from the felling of trees for farming and wood purposes. The flood defences are a public good which is a good that is non excludable good and non-rival good. If the government were to pay to for the provision and maintenance of the flood defences, it would be using money from tax revenue from the population of the whole UK. The problem with this also is that you will get those that do not pay for the service benefiting from the service, called…show more content…
This is will difficult if there housing is severely reduced in value due to the risk that are there of flood. Therefore to increase profits and chances of breaking even, they should provide the initial flood defences for the housing. This will increase the saleability of the housing and profitability of the firms. It also provides social benefit for those that are buying the housing. Yet you could say that the cause of the flooding is not directly the housing estates firms fault and should not have to pay for the provision. In conclusion the negative externality that is created from the forestry and the farming firms should be paid for by them by indirect taxation on the products they are providing. It is similar to pollution permits given to firms by the government that could be blamed for the advancement of global warming. Yet the problem with flooding is that it is very difficult to measure the amount of flooding that the deforestation has actually caused. Natural floodplains do exist and to protect housing from it the government should provide a service to protect its citizens from structural damage. Due to the fact that it can be shown that cutting down trees in surrounding floodplains and tree in hills (Extract E:line 3) does actually increase the risk of flooding, the firms should pay for this negative externality. The maintenance of the flood barrier should be

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