Public bad - Definition and Overview

A public bad, in green economics, is a good that produces socially undesirable results. Pollution is the most obvious example. There are less obvious examples. A public golf course, for instance, could be seen as a public good insofar as it provides recreation to those who might not otherwise get it. But deforestation, excess water use and pesticide use to maintain it might well be seen as public bads, externalizing harms on future and current generations.

Most green economists advise measuring such impacts back to the present from the seventh generation. Thus in the golf course example, both the recreation and the negative impacts from deforestation, associated habitat and biodiversity loss, and pesticide toxicity would be estimated across those generations and some amortization applied to determine whether the golf course was a public benefit or a public bad from the point of view of that seventh generation.

Green economists argue that the costs of public bads are hidden from the businesses that cause them - meaning the market is not working correctly. The legal challenge is to create a system that takes into account these costs. The Environmental Protection Agency in the USA is an example of an attempt to make sure the costs of public bads are taken into account, although some groups on the right and left have criticized the value of its efforts.

See also

• Waste
• social cost
• externality