Discussing incentives to conserve marine biodiversity conservation Essay

Discussing incentives to conserve marine biodiversity conservation within the framework of impure public goods - Essay Example It is important to note that their benefits can be affected when the government decides not to offer the conservation. (Maxwell) Ordinarilly, 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 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.Ordinarilly, 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