Impure Public Goods and Marine Biodiversity
Conservation of marine ecosystem is one of the issues that require a special concern. Biodiversity is indispensable for the successful functioning of the marine ecosystem, and its preservation is currently an important task for ecologists. Non-market public good nature of marine resources makes them a relevant topic for discussion within the framework of impure public goods. Marine ecosystem is one of the most important public goods that is consumed on a great scale and needs protection.
Public goods are usually defined as goods that cannot bring individual benefit. They can be consumed by all members of society without being used for personal profit because it is usually impossible or extremely complicated to make consumers pay for the usage of the good. Impure public goods are the goods the consumption of which reduces, but does not eliminate, the benefits they bring to the consumers. Impure public goods are partially competitive, congestible and often excludable (Cowen). This means that access to them can be easily controlled, and the consumption of these goods can be regulated by imposing certain limitations. However, impure public goods have not only the public impact, but they also affect the private sector. Sometimes they can have certain private effects, but they are normally independent of the goods themselves (Löschel and Rübbelke). Impure public goods include recreational facilities, such as parks, roads, or bridges. This term can also refer to natural objects and resources. Impure public good are sometimes called “quasi-public” since they do not always satisfy the criteria of definition of a public good, such as non-rivalry and non-excludability.
Marine biodiversity can be treated as an impure public good since it is a relatively limited ecological resource that can benefit the consumers without being eliminated (Cowen). Its consumption is inherently collective and independent of individual consumption rate. However, intensive consumption of marine resources endangers biodiversity and reduces resources of marine ecosystem. Excessive exploitation of the ecosystem and abuse of natural resources are the causes of reduction of biodiversity and the reasons why the problem of its conservation has become so vital for modern society.
Marine biodiversity, like the majority of other impure public goods, is associated with certain types of externalities. Externalities can be positive, negative, and technological. Positive externalities include benefits enjoyed by those who do not take an active part in an economic transaction. In respect to impure public goods, positive externalities can include appearance of additional facilities besides the main one, growth of their popularity or demand for them and so on (Cowen). Negative externalities imply costs paid by a third party that does not take part in a transaction. They usually are the result of unreasonable management of the resources and abusive consumption. Technological externalities include the factors that have a direct influence on consumption and have a general impact on the society.
Biodiversity itself can be considered a positive externality (Shogren). Biodiversity is the result of the successful ecological policy. It proves that the ecological situation is relatively stable. Biodiversity is used to measure the health level of a biological system. The balance between living and extinct species should be kept in order to maintain normal functioning of the ecosystem.
Negative externalities of biodiversity consumption include expansion of land for agricultural purposes, increasing pollution of the sea resulting from quickly developing industry. Unlimited exploitation of fishery and frequent cases of poaching have caused a great damage to the marine ecosystem. These factors have negative influence on biodiversity because of the reduction of natural habitat that makes the species decrease in number and variety. Active exploitation of ships and formation of regular waterways leads to the fragmentation of marine habitat. Consequently, certain species may become endangered because of the lack of food or space for migration. Technological factors also have negative influence on biodiversity. The appropriation of marine resources for industrial use causes considerable stress to the ecosystem (Shogren). Water and noise pollution that are inevitable consequences of technological progress are likely to cause significant harm to the ecosystem. As a result, biodiversity will be diminished.
Public good supply can be carried out by means of various technologies. The best shot technology is applicable to the situations when various teams compete with each other for a “victory” from which the winning team will benefit as from a public good. The common victory in such cases largely depends on the individual performance of each member of the team (Harrison and Hirshleifer). The best shot model is relevant in the situation when the conservation measures are applied to the whole ecosystem by numerous social organizations. The weakest link technology is relevant in the context where each member of a certain social group exercises a kind of “veto power over the extent of collective achievement” (Harrison and Hirshleifer). In respect to marine biodiversity, the weakest link technology would apply to the situations when conservation attempts are made by a social organization or institution and aimed at the preservation of a certain species or at the successive restoration of several segments of the ecosystem. This may also include a sequence of tasks that need to be performed, such as the clean-up of pollution, artificial cultivation of fauna and flora and so on.
Impure public goods supply is based on numerous economic incentives. These incentives can be positive and negative. Positive incentives are those that bring financial reward and give motivation for the further development. Negative incentives result in financial losses and serve as a punishment that gives motivation to change one’s model of behavior. In case of the best shot model of impure public goods supply, the most common negative incentive is the lack of the good in question. Each individual member of a team has motivation to perform as well as possible in order to avoid expansion of the group and make it possible to achieve equal division of the public good among the members of the team (Xu). Fair and proportionate distribution of the public good in this situation serves as a positive incentive. The members of the group are rewarded by the possibility to consume the public good without obstacles. In the context of the weakest link model of public good supply, the main positive incentive is the long-term result of the actions since the conservation in this case encompasses the biological system as a whole. The gradual improvement of the ecosystem as well as enrichment and abundance of the species are the long-term effects of the conservation activity. However, the impossibility to gain quick results can serve as a negative incentive since it can decrease the motivation to act (Xu).
As a conclusion, it is necessary to note that marine biodiversity as an impure public good requires much attention. Its conservation value is extremely high, and conservation is economically indispensable. In the recent years, there has been a significant decline in the biodiversity, and the marine ecosystem has suffered numerous losses inflicted by human activity. That is why its conservation should be one of the primary scientific concerns, and urgent measures should be taken so that the consequences of this decline do not become irreversible.