Because of environmental externalities, market prices may not reflect the true social costs and benefits of particular technology adoption choices. Governments can play a role in improving environmental quality, not only by internalising externalities, but also by correcting market failures in the provision of information. Improved production techniques and management practices can improve efficiency and cut both waste and pollution, in effect replacing other, more polluting inputs with clean input information. However, information has certain aspects of a public good, and it is difficult for individual suppliers to restrict its use to only those who have paid for it. Consequently, private markets may undersupply information about environmentally beneficial technologies.
Insufficient information can also constrain the adoption of new technologies by farmers.
In such cases, the government may be able to improve efficiency by collecting and providing information about resource-conserving practices.