Environmental Public Goods

Chapter 8 considers the conservation of environmental public goods. The nonexclusive and nonrival nature of public goods provide an incentive to free-ride on the efforts of others. The result is that such public goods are systematically undervalued and the underlying environmental assets—such as watersheds, habitats, and ecological communities—are underconserved. It shows how individuals determine their contribution to public goods (via a Nash-Cournot reaction curve), and compares the result to the contribution that would be made if resources were being allocated efficiently from the perspective of society. Types of environmental public goods considered include additive (climate change), best- and better-shot (defence), weakest- and weaker-link (infectious disease control), and local public goods (common pool resources). The chapter also shows how strategic behavior by the beneficiaries of public goods may lead to socially undesirable outcomes (such as prisoner’s dilemmas).