Sustainable finance
Public Good
Definition
A public good is one that is non-excludable (no one can be prevented from using it) and non-rivalrous (one person's use does not reduce another's). Clean air, a stable climate and biodiversity exhibit public-good characteristics; because free riders can benefit without paying, markets and individual states underprovide them, justifying collective provision through government or international cooperation.
References
Source imported for editorial provenance.
This reference provides supporting context for how “Public Good” is defined and used.
Overview
How it is used
Public good theory underpins environmental economics, the rationale for regulation and public spending, and the design of multilateral environmental agreements and global funds.
Why it matters
Most sustainability problems are, at root, public-good provision failures; the concept explains why voluntary markets alone cannot deliver environmental protection.