Introduction
Wildlife conservation, especially to help maintain biodiversity, is something that most citizens would likely support, and they would probably spend hours enjoying the animals as they lived and played in their habitat. However, conserving wildlife and providing a habitat for them is not a given, and it requires incentives for someone to provide the resources for conservation and habitat maintenance. Economists believe that, for the most part, the best way to conserve wildlife and wildlife habitat is to support the efficient and sustainable use of these resources (Bulte et al. 2). There are a number of ways these resources – wildlife and wildlife habitat – can be used, and to settle on conserving wildlife and providing the land and space for their habitat would require economic incentives that would make this use of wildlife and land more attractive than some other use. Such economic incentives may be too limited and too weak to make wildlife conservation and habitat conservation attractive as a private good. Both of these resources are likely to fall into the realm of public goods, and even then they may be too often undersupplied.
Public Goods
Public goods and private goods differ on two distinct properties. Private goods are rivalrous, i.e. only one person can consume it. Second, private goods are excludable; those who do not pay for the good are excluded from consuming it (Borooah 2). Public goods, on the other hand, are non-rivalrous in that two or more people can simultaneously consume the good. Public goods are also non-exclusive – no one is excluded from their consumption (Borooah 2). A public good is a commodity or a service offered without profit to all citizens of the society. In most cases, a public good is something that the citizens of a society need, but its provision is not worthwhile for a private provider to assume. Consequently, the government usually becomes the provider of the public good. This is very true of wildlife conservation and habitat protection, which is usually provided by the U.S. government on national forest land. And, it should be noted that no one can be excluded from enjoying the benefits of this public good (Arriagada and Perrings 798).
There are two types of public goods – pure and impure. A public good is considered pure when it is both non-rivalrous and non-exclusive (Arriagada and Perrings 798). Pure public goods can be consumed by more than one person at a time, and no one is excluded from their consumption. Impure public goods exist when they are either partially excludable or partially rivalrous (Arriagada and Perrings 798). Impure goods usually start out being pure, but after a certain number of users, congestion may set in and cause some users to be excluded and miss consumption of the good (Borooah 3). Wildlife conservation and habitat conservation are impure public goods.
Impure public goods are affected by externalities. An externality occurs when a benefit or a cost of consuming a good affects people who are not really consuming the good (Sanders 1). Impure public good externalities can be either positive or negative. A positive externality benefits people who are not even using or consuming wildlife and habitat conservation. These people get a benefit just because of the externality. On the other hand, a negative externality represents a cost that people who are not using or consuming wildlife and habitat conservation must incur. These people simply have to bear the cost even though they are not responsible for it (Sanders 1). An example of a positive externality attached to an impure public good is the impact of my education on people in the future. People who do not even know me or will never meet me may be positively affected by an invention realized as a result of my education. An example of a negative externality is pollution. People who do not own a car must deal with the exhaust pollution that my car ejects into the atmosphere daily. For some of these people, the pollution externality may be quite toxic if they have respiratory problems (Sanders 1).
Technology of Public Good Supply
There are three basic public good supply technologies. The first is termed additive (Arriagada and Perrings 799). In the additive case, the socially available amount of a public good is the sum of the separate amounts of the public good produced by the participating countries or public agencies (Arriagada and Perrings 799). In the additive case, several producers are producing the public good. And, in certain cases, such as habitat protection, a weighted sum measures the contribution of each producer based on its characteristics (Arriagada and Perrings 799).
A second public good supply technology is labeled ‘best shot’. For ‘best shot’ public goods, the benefit to all countries is determined by the most effective provider of the public good (Arriagada and Perrings 799). Not all providers are necessarily equal at providing an impure public good. The provider that can be most effective at supplying the public good will also provide information and experience to other providers as they develop over time. Finally, the third public good supply technology is called ‘weakest link’ public good (Arriagada and Perrings 799). ‘Weakest link’ public goods work the opposite of ‘best shot’ public goods. The benefits of ‘weakest link’ to all countries are limited to the benefits offered by the least effective provider (Arriagada and Perrings 799). Control of infectious diseases is a good example of this supply technology in that the level of protection for all countries is only as good as the level of protection in the poorest and least well-coordinated country.
Economic Incentives for Public Goods
When it comes to impure public goods, the government has three economic incentives (EI) available to use to achieve the outcome it desires rather than the outcome that would occur without intervention. The first EI is common values and norms, which are often stated a moral suasion (Bulte et al. 2). The state can attempt to use moral suasion to convince economic agents to act in a socially desirable fashion so that the outcome is acceptable. This may include trying to convince citizens to report wrong doing and misconduct among economic agents or public good providers.
The second EI is command and control. This is nothing more than government regulations set up to control the outcomes associated with the public good (Bulte et al. 2). In the absence of adherence to common values and norms or market incentives, the government may turn to regulation to force the outcomes it wishes to occur. Finally, the third EI is market incentives (Bulte et al. 2). Economic incentives and command and control are often used together to secure the government’s desired outcomes for the public good. Within these three EIs, there are other economic incentives that can be used to influence the public good and people’s reaction to it.
- Arriagada, Rodrigo and Charles Perrings., “Paying for International Environmental
Public Goods. Ambio 40: (7). Pp. 798-806. 2011. Print. - Borooah, Vani K. “Pure Public Goods.” Power Point Presentation, University of Ulster.
2015. Electronic. Wed., Feb. 10, 2016 - Bulte, Erwin H., G. Cornelis van Kooten and Timothy Swanson. “Economic Incentives
And Wildlife Conservation.” Working Paper. 2003. Print. - Sanders, Nick. “A Brief Discussion of Public Goods and Externalities.” Economics Class
Handout. UC Davis Graduate Department of Economics. 2005. Print. Sat., Feb.
13, 2016 http://njsanders.people.wm.edu/1A/PublicGoods.pdf
