Special Topic 11. Difficult Environmental Cases and the Role of Government.

Business

Shortening the fishing season is not the solution to deal with the "tragedy of commons." Similar attempts by the government aggravated the "tragedy of commons" and led to competition to fish as much as they could. This resulted into depleting the stock of fishes on the one hand. On the other hand, it increased the rate of fatal accidents in high seas. Therefore, across the globe, now the most preferred system to arrest the dwindling stock of fishing is enforcing property rights through granting Individual Transferable Quotas (ITQ) or Individual Fishing Quotas (IFQ). ITQ is the granting of ownership of a share of the annual catch allowed by the government. This has dispelled the fishers' fear of losing the quotas to their competitive fishers and led to decline in the "race-to-fish." As the fishers have the incentive to fish at their own speed so as to maintain the value of the fishing rights in the short-run and even in the long-run also.

National parks are natural resources, but maintenance of them involves cost. If everyone is allowed to enter national park freely without paying any cost, then the result will be mismanagement of national park. National park if operated without property rights means that there will not be proper flow of information which market provides in the form of prices. There will be weak incentives to operate and maintain national parks. As a result, there would be less expenditure on the maintenance which could have increased the value of national parks in the eyes of visitors. If a national park is maintained according to the wants of visitors, then visitors would be willing to pay the fees to visit national park. This will help the managers of national park in covering the cost of maintaining and providing benefits to the visitors raising the efficiency of using national parks.

Economist disagree with the statement because the estimated opportunity cost in terms of slowdown of economic growth is very high, however, the benefits received from reducing the greenhouse gas emissions is uncertain, distant, and very less. Moreover, government regulation to check the build-up of carbon in the atmosphere leads to involvement of special interest like scientists. This special interest group might not want enforcement of property rights and markets to self-regulate the carbons level as they derive their livelihood from this. Further, atmosphere getting warmer by each passing decades does not mean that it only has disadvantages. It may also have advantages in the form of increasing the growth rate of plants. Economists too are concerned about the future but they emphasise on reducing the cost of pollution in proportion to the benefits. For this they advocate focussing on spurring the economic growth and development; and taking action immediately to reduce the risk related to global warming, namely malaria, hunger, coastal flooding, and water shortages.

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