Economics of Ocean Resources
Research in Economics of Ecosystems and Biodiversity is essential for drawing attention to global economic attributes. They include economic benefits highlighting the cost accruing from loss of biodiversity as well as ecosystem degradation. Consequently, the study will facilitate the drawing together of expertise in economics, science and those of policy makers in a bid to ensure the adoption of practical actions to propel the whole concept forward. Impure public goods have partial divisibility and are exclusive, and by treating them as private goods one can make them significant externalities. This makes it challenging to control their property rights. The paper provides a discussion of impure public goods issue and also of the establishment of a framework that understands the necessity of an environmentally friendly consumption.
To conduct an analysis of common source interface and issues of public goods on both public and private benefits, impure public goods concern the marine conservation. Impure public goods are the environmental assets that give benefits to both public and private entities, and they are also called mixed goods. An example of impure public goods is a whale, because, on the one hand, through hunting these mammals provide private benefits while, on the other hand, they provide public benefits through their contribution and existence to the marine food web and the ecosystem. Other instances of impure public goods include cetaceans like vaquitas and dolphins, sea birds and sea turtles as they provide both private and public benefits that have excludability and rivalry changing strengths. It is argued that common resources that are managed in a traditional manner for their benefits, now, must be managed for public and private benefits that will, in turn, need the kind of framework and policy tools that are discussed. Community-based conservation uses development of economy to maximize the private benefits that flow from impure public good as it increases the incentives of private economy for the conservation of public good (Bulte, van Kooten, and Swanson 22).
Wildlife provides two types of products that are products resulting in consumption and those for non-consumptive uses. Negative external effects are common and especially evident in reduced consumptive use of wildlife products and in decision making due to the absence of properly structured economic institutions as well as incentives for wildlife consumers to consider the cost they incur while deriving utility from conservation. This leads to externality which may be good or bad depending on the nature of impure public good at hand. Just like other international environmental public goods (IEPGs) biodiversity conservation is considered an impure global public good (Arriagada and Perrings 57). When there are numerous potential providers, every one of them provides local benefits from conservation endeavors and also benefits from the others’ conservation efforts. It is clearly evident that impure public goods comprise a cross-border spillover of externalities and hence the inter-boundary environmental externalities.
Numerous researchers have adopted the game theoretic approach in a bid to take note of the conditions in different countries, which either desire or are reluctant to cooperate in reducing transnational pollutants. On the one hand, symmetric externalities have been found to have an effect on all nations, for instance, international water bodies from which nations obtain their waters and to which some states could deposit pollutants. Besides, all countries prefer cooperation to retaining a status quo hence predisposing them to a reliance on specific reciprocity. On the other hand, asymmetric externalities are mainly unidirectional, for instance, an international river and effects on victims who are in the downstream. This kind of externality presents severe issues regarding enforcement (Arriagada and Perrings 62).
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International goods supply is dependent on either international cooperation or coordination. The beneficiaries of the public goods supply involve national states, non-governmental organizations, arising corporations and institutions. Understanding the technology of public goods supply is essential to initiation of necessary incentives. The major examples of technologies for public goods supply are the best shot, additive, and weakest link technologies. The additive case implies the socially available amount of a public good or the total sum of separate quantities that is produced by the number of participating states. For simple sum public goods like the carbon sequestration, every component of the carbon sequestered contains a similar value irrespectively of where it takes place. According to Arriagada and Perrings, in the best shot public goods, benefits accruing to all states are found by establishing the most effective provider (59). For instance, the Centers for Disease Control and Prevention usually gets funding from the US government, but they duly provide informative data regarding infectious diseases to all countries. The weakest link public goods technology provides benefits, but limited, to the states with the least effective provider. An illustration for this is the control of infectious diseases. Regarding HIV and TB, the protection accorded to all countries is good only when the mitigation measures are practiced in poor and densely populated states.
Costs and benefits are involved in the conservation and exploitation of wildlife in order to get an optimal outcome. Economic incentives and instruments are developed with the aim to achieve an optimal result. There are three categories of economic incentives: command and control (C&C0, common norms and values and market incentives that are also referred to as economic incentives. Examples of economic incentives include rights trading, taxes, subsidies, and contracts. Rights trading is defined as an entitlement, whether to a fish stock or wildlife species harvest quota or an ability to perform or develop other land activities such as harvesting and plowing before a given date. This gives a complete discretion to private parties over the actions that are taken. On the contrary, there is less discretion given by C&C regulations. It leads to inefficiencies in asymmetric information context between regulator and agent. Regulations may specify the standards that are technology-based and which may be used by regulated firms in wildlife case.
Economists have criticized the subsidies use for conservation achievement. For instance, where harvesters are subsidized to minimize their rate of harvest if these subsidies are enforced, they will definitely work if they want to minimize the harvesting level. The major potential problem with subsidies arises when the right to property is not perfect because the entry in the sector of harvesting is encouraged, which is being tried to be controlled by the government (Bulte, van Kooten, and Swanson 24). Subsidies will be poor instruments if, for example, there is no fixed number of harvesters to prevent new entries in this sector. When there is a well-established and defined property right, the quota is set by the regulator by taking into account external effects. On the contrary, if an agent that is private has property rights in physical space to the resource, it will not take the effects into account.
Optimal conservation needs explicit consideration of public and private benefits. Without taking into account the public benefits of the ecosystem, biodiversity, and their services, there is a low supply of public benefits. Externalities can be bad or good, but their impact is that the price of supplying does not reflect the true cost of the activity to society any longer. Economic incentives have potential to address wildlife management associated spillovers. They appear specifically helpful for many reasons. For example, firstly, they are able to achieve aims at a lower cost. Secondly, they encourage the use of resources efficiently thus having a small effect on the growth and development of the economy.