A public good is a product or service that is freely offered to all the members of a given society or nation in such a manner that no individual can be denied access to the product or service whiles its availability cannot be reduced for other people as a result of the good being utilized by an individual (Arriagada " Perrings 798). A pure public good is a product or service that is both indivisible and non-exclusive in its human consumption. On the other hand, an impure public good is a commodity or service that is either partly divisible or partly excludable in its consumption such as, local public goods which cannot be easily provided by a single nation or state (Arriagada " Perrings 798).
Impure public goods are associated with a number of economic activities that affect other people who are indirectly involved in the economic activities. These effects are commonly referred to as externalities some of which include disease control and climate regulation mainly through watershed protection. Other types of externality associated with an impure public good such as biodiversity, include the availability of timber as well other private benefits such as fishing, medicinal plants, tourism, and recreation (Arriagada " Perrings 800). Moreover, tropical forests have other co-benefits or externalities such as microclimatic regulation, genetic information, as well as hydrological regulation. Adequate livelihoods, access to goods, availability of enough nutritious foods, as well as access to security and resources are also some of the other externalities that come with the use or existence of impure public goods.
Public goods can further be categorized in relation to the technology used in their supply as dictated by the demand of the public goods. As a matter of fact, developing proper incentives requires a critical conceptualization of the public goods supply technology. The three typical examples of the public goods supply technologies that are usually used include the best shot, weakest link, and additive technologies (Arriagada " Perrings 799). First, the best shot public goods supply technology is whereby the externalities felt are dictated and controlled by the most effective provider of the public good. A good example this concept is in the case where the USA government funds the Centers for Disease Control and Prevention which, nevertheless, provides the information they acquire to other affected nations. The weakest link public good supply technology is whereby the externalities are only limited and restricted to those provided by the least efficient supplier of the public good. The management of contaminable diseases is a good instance that best illustrates this type of supply technology. For example, in the control of tuberculosis and HIV, progress in the same is determined by the level of control of the disease in the least developed nations. Lastly, the additive public good supply technology is whereby the quantity of the socially accessible public goods equates to the sum of the separate volumes produced by each of the directly involved participants (Arriagada " Perrings 799). The sum of the separate amounts of produced public goods in this type of supply technology is analyzed in terms of a weighted sum and a simple sum. In simple sum, for instance in the sequestration of carbon, each of the produced units of the sequestered carbon have similar values irrespective of its place of occurrence. In weighted sum, for instance in the protection of habitats, each protected hectare makes a contribution that is relative to its characteristics.
Economic incentives are measures put in place to ensure that environmental assets are not abused or overused in a bid to avoid environmental damage. These economic incentives mainly consist of charges or taxes as well as other tradable ownership rights. According to past experiences, well designed and structured economic incentives are more likely to achieve the targeted environmental goals at a relatively lower cost compared to the conventional command and control approach (Bulte, Kooten, " Swanson 4). Economic incentives for the conservation of impure public goods can either be positive or negative as developed by the supply technologies of public goods.
The first type of economic incentive created for impure public goods with a different supply technology of public goods is the forest protection policy implemented by several governments around the world especially in high biodiverse regions with beautiful landscapes and watershed protection (Arriagada " Perrings 802). In a bid to achieve this, most governments employ a number of market-based instruments such as long-term forestry concessions, forest certification, financial and material incentives, development of markets for the non-timber forest products, as well as stumpage forest revenue systems.
Another positive economic incentive created for impure public goods is the development of an efficient multilevel structure of payments to enable the reduction of emissions that come from forest degradation and afforestation activities (Arriagada " Perrings 802). This strategy can be very instrumental in the creation of a financial value for the huge volumes of carbon that are stored in forested areas. Furthermore, offering such economic incentives can help in the overall conservation of the biodiversity as well as in the security of the other important distinct ecosystem services (Arriagada " Perrings 802). The creation of an efficient multilevel payment structure is an economic incentive created for impure public goods, in this case, forestry, with the help of the additive public good supply technology.
Another type of an economic incentive created with respect to impure public goods is the use of subsidies in a bid to achieve utmost conservation of the wildlife environment (Bulte, Kooten, " Swanson 12). An example of the implementation of this incentive is whereby harvesters are paid or subsidized to lower their rates of harvesting. However, this incentive is a negative type because it is likely to encourage more entrances into the harvesting sector that are likely to create bigger problems that will eventually compromise the objectives of the conservation (Bulte, Kooten, " Swanson 12). Subsidies constitute one of the poorest instruments that are used to regulate harvesting because it requires another policy that restricts the entry of new harvesters into the industry for it to successfully work. Nevertheless, subsidies are very efficient in the protection of habitat conservation, hence, indirectly promoting wildlife conservation. This is a good example of an incentive that has been created for an impure public good, in this case, wildlife, with the help of the additive public good supply technology.
The establishment and enforcement of property rights to recourses available in the physical space is also another economic incentive that is developed to ensure the sustainable use and conservation of the environment (Bulte, Kooten, " Swanson 12). This is a positive incentive because it will ensure the negative externalities are overcome while the other species within the physical space are saved from possible extinction. Through the implementation of the property rights, users will be able to spend less and still get the attention of the people with access to the given resource. Furthermore, the owners of the property rights will be able to realize the fruits of their investments and, as a result, enhance the sustainability and efficiency of resource management (Bulte, Kooten, " Swanson 13).
Works Cited
Arriagada, R, and C Perrings. "Paying for International Environmental Public Goods." Ambio. 40:7 (2011): 798-806. Print.
Bulte, E., G. van Kooten, and T. Swanson. “Economic Incentives and Wildlife Conservation.” Working paper. (2003).
