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Ecosystem and biodiversity are facing increasing threats, and their loss affects the humans. In order to produce a varied ecosystem goods and services, humans depend on the natural system, and human involvement ranges from direct application of certain food spices or medicines to climate regulation. In the facing of growing populations and increasing human economic activity, biodiversity sustenance is a major challenge. Understanding the human behavior is an essential component to those who have an interest in conserving biodiversity. This paper aims at analyzing of incentives involved in marine biological diversity conservation in the context of impure public goods.
Impure Public Product
The term public goods is a general name for public goods and services, and it assumes the elimination and control of public products that have an adverse effect on the general welfare. Impure goods are defined as no excludable goods that are partially rivalrous, for example, park, and swimming pool among others (Bulte, van Kooten, and Swanson 6). These goods are somewhat exclusive and divisible and can be produced and treated as private goods, however, doing so would have fabulous social harms due to a number of externalities associated with impure public goods.
An externality refers to an effect of an economic activity experienced by those who have a direct involvement in the economic activity. These externalities can either be positive or negative, however, they are mostly negative and, as a result, it is the negative externalities that captures the attention of people. The positive externalities are defined as spillover as a way of suggesting their effects felt by consumers who do not have a direct intention of the producers. The following are some examples of externalities.
Substantial Externalities. These goods have significant externalities that make them impossible to control their governing property rights. For instance, the fees collected from a part are never close to covering the entire cost of the benefits that the park delivers. There are extensive beneficial externalities and it is only the collective consumption of this kind of goods that is economically effectual.
Diminishing Scale returns is another reason for tremendous social problems among impure public products. These products are subtle to inbuilt production and consumption limits that whereby extra production or consumption result in increased cost rahter than benefits. For example, fire service, garbage collection, and police, whereby only a limited use of these products is effective.
Growth Limits Problems. Goods that are non-replenishable, such as natural gas, fresh water, forests, imperiled species of animals that may fall within the geographic borders of a state pose the kind of externality that affects the whole region or globe (Bulte, van Kooten, and Swanson 12-23 ). There is no moral permission to the lawful owners of such resources to treat them as a typical market merchandises for sale to the best bidder. For example, the peasant farmers in the Amazon forest are not lawful allowed to clear or destroy forest by burning to create space for farming. In addition, selfish national exploration of natural resources that has an extensive cross-border externality is likely to bring about international pressure.
The other form of externality can be found under the Very Impure Public Goods. This goods category comprises of certain products and services that can be consumed or produced as private goods or public products. The externality, in this case, is the essential to life whereby such produced are close to being privately owned goods and can be manufactured on a private basis (Arriagada and Perrings 799-804). However, because they are essential to humans’ survival, their profit-oriented exploration process is likely to endanger the survival of other humans in the ecosystem. Some of the examples that can generate profits at the expense of society include electricity, water and sewerage, and medical care among others.
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Technology of Public Good Supply Best Shot and the Weakest Link
Contingent to the public goods supply technology countries that take part in the establishment of international environmental public products can widely adopt differing strategies. In general terms, the summation public products are associated with dilemma, chickens, and chicken games. The best shot with chicken games while west link with assurance games. The technology and the contributor’s effects on public goods supply are separate independent international environment properties the combination of the two contributors will affect the strategic behavior of individual countries.
The development of the weakest link in the concept of public goods is exciting in that it elegantly extends public goods concept and summation technology case. Public goods under the weakest link are characterized by case in which G = min{gi}, where G stands for the total quantity of the public good, and g represents individual and his or her contribution. A good example is the one that was put forward by Hirshleifer in 1983. Hirshleifer imagined the Anarchia inhabitants that is a low-lying island where people were threatened with destruction if the in case the sea level went high (Arriagada and Perrings 799-804). Each inhabitant can build a dyke to protect the increasing sea water, however, protection consumed by all equals to the lowest dyke.This implies that once a breach occurs in the most inferior barrier the whole island is flooded.
In the case of best-shot scenario, the entire quantity of public goods are equivalents to the quantity of the largest personal provisions level. For example, in search for disease cure such as aids, those team undertaking the task that puts the most effort is likely to succeed. Once the cure is found extra efforts to this task becomes redundant. However, public goods best shot can bring about coordination problems among nations. For instance, the case of semiconductors: it does not make sense to conduct superconductors in several countries despite their high cost. According to best shot efforts and resources, efforts should be pooled together where success prospects are excellent. Therefore, rational efforts of developed nations or forming a partnership among different participants to help the most likely candidates to succeed will be the best shot approach.
Supply Problems (Economic Incentives, both Positive and Negative)
Public goods have no rival in consumption, and they face supply problems that make them be referred to as a case of market failure. As discussed earlier, externalities arise when a person takes an action but fails to bear all the cost resulting from a negative externality and a whole lot of benefits leading to positive externality of the action. For instance, education has positive effects on the survival of a child in the society with a slow growing population. In contrast, once a river is polluted, human beings and nature can be harmed.
According to most economists, negative and positive externalities are differentiated by their negative or positive utilities to the third party. Therefore, the term public good is mostly applied to goods that have a positive utility and externalities. On the other hand, in case a general disutility takes place, the term will change to public bad. The public bad are public goods with a uniform cost across a group, for instance, water and air pollution or energy production. To some extent, public goods can be tied to purchases of private goods, thereby making the entire package more similar to private goods.
