Market-based resource management policy and environmental uncertainty: outsourcing risk calculation

[Extract] Markets and market-based instruments (MBIs) are promoted through contemporary policy and academic discourses as solutions to all manner of social and environmental problems. From improving health and aged care services to mitigating biodiversity loss and climate change, market-based approaches are presented as the most efficient and effective of available policy options. Thus we find tradable permits to emit greenhouse gases identified in virtually all key reports and international agreements on climate change mitigation as the instrument of choice (Garnaut 2008). Tax-based measures are seen to have some merit while regulatory interventions, incentive schemes and programs of direct action evoke notes of caution. Echoing the UK's Stern report, the Garnaut Climate Change Review commissioned by the Australian government to estimate the impacts of climate change and recommend policy frameworks to deal with it argued that non-market measures will be less efficient, impose unnecessary costs, distort investment decisions and result in no additional reduction in emissions across the economy (Garnaut 2008). The task, it argued, is to fix market failures, not pick winners