Economic Incentives and Wildlife Conservation - Essay Example

It is important to note that their benefits can be affected when the government decides not to offer the conservation. (Maxwell)

Ordinarily, an externality is the effect of an economic activity felt by those not directly involved in the economic activity. Positive externalities are often described as spillover effects to suggest their effects are felt by consumers who were not directly intended by their producers. The impure public goods such as marine biodiversity and other environmental amenities are not to be supplied privately because the provider cannot capture the benefits and therefore no one can be excluded, so free-riding is possible. Clearly, some aspects of marine bear the characteristics of a public good. Marine contributes to global biodiversity and enhances the well-being of the majority of people. (Bulte)

Ordinarily, no one has the appropriate incentive to provide marine habitat or otherwise protect marine as they cannot capture the full benefits from the needed investments. Market failure occurs because the amount of a public good is underprovided, and thus marginal social benefits exceed marginal social costs. In this case, more of the public good should be provided, but it is forthcoming only if society subsidizes a private supplier, or provides it publicly. (Bulte)

On the other hand, negative externalities that include the government regulations impose costs on society that extend beyond the cost of production as originally intended by the producer. A producer of a negative externality who does not have to worry about its full cost is likely to produce an excessive harmful amount of the product. Ordinarily, regulations and fines may deter the production of negative externalities. But the effects of regulation may be limited under conditions such as where negative externalities are so pervasive they encourage free-riding attitudes, where negative externalities are so pervasive their producers could never pay for their full cost, even if they are caught and charged and when negative externalities extend into the international system where rule enforcement is generally not possible. (Local)

Ordinarily, understanding the technology of supply of International Environmental Public Goods is critical to the development of appropriate incentives in marine conservation. The ‘best shot’ public goods here imply that the marine biodiversity is conserved by the USA funding through setting policies and enforcing them. This however comes to be a benefit to all citizens. On the other hand, the ‘weakest link’ public goods, the benefits to all countries are limited to the benefits offered by the least effective provider. This means that some parts of marine biodiversity can also be limited by the policy of the state. The best example of this is the control of infectious diseases. So for HIV and tuberculosis, the level of protection available to all countries is only as good as the control of the disease exercised in the poorest, most densely populated, and least well-coordinated country. (Perrings)

 Marine biodiversity may be overharvested with has to do with perverse government policies. One well-known form of policy failure is subsidization of harvesting or habitat conversion. As will become clear below, one way to address market failure is through the implementation of a tax or user charge. However, rather than charging users to exploit natural resources, there are many real-world examples where exploitation of natural resources is encouraged rather than restricted policies aggravate rather than mitigate pre-existing distortions. When the use of resources is subsidized, the marginal cost curve is pushed downwards and short-term supply expanded. (Bulte)

 A negative external effect can occur when consumptive use of marine reduces their numbers leading to population declines of marine. The total economic value to “preservers” falls. However, the consumers of marine products fail to take this into account in their decisions because there do not exist appropriate economic institutions and incentives to get “consumers” of

marine to regard the costs they impose on those deriving utility from conservation. This

is referred to as an externality. (Bulte)

There is a divergence between private and social costs of provision, because one of the inputs in production, namely the marine environment, is not appropriately priced. Normally, the environmental cost that relates to conservation is not taken into account. Normally, an increase in the price of this rationed impure public good by the state simply forces the consuming household to pay more for the rationed consumption level. Otherwise, the higher opportunity cost of the independent generation may cause the impure-public-good provision level to rise. (Local)

Ordinarily, the reason is that restrictions on use erode the incentive that people have to

Invest in the protection of the species for potential future harvesting. People have no incentive to invest in the conservation of the species. The result will be that the base resources on which marine depends for their survival (such as water) will be allocated to other, more profitable uses. The key insight is that taking away the short-term incentive to harvest may not be in the species’ best interests. In effect, this is another manifestation of policy failure. (Bulte)