4. Producing Public Goods a) Explain what is meant by a debt for nature swap. Ho

Question

4. Producing Public Goods a) Explain what is meant by a debt for nature swap. How do they contribute to the production of public goods? b) Explain what is meant by ecotourism. How does ecotourism contribute to the production of public goods? c) Explain what is meant by bioprospecting. How does bioprospecting contribute to the production of a public good? d) Explain how a current user of land, to produce a private good such as agriculture or timber, can become a producer of a public good such as wildlife, biodiversity or carbon sequestering. 5. Financing a) In terms of producing a public good, why is this normally an activity that requires financing? b) Explai 1) Bonds in the NYC-Catskill example. 2) Stock in the "Down Under: How to Make a Numbat Turn A Profit" example. 3) Debt for nature swap in the "Bankruptcy and Biodiversity" example. in how the various financing options were used to produce public goods: 6. Explain how the public good problem of environmental services, where SMB>PMB, is due to nonrivalry and nonexclusion (otherwise called "free riding'). Using Ch. 3 (Markets and Ecosystems), Ch. 4 (Ecotourism), and Ch. 6 (Biodiversity) in Heal, explain how each of Heal's examples show how to establish exclusion or eliminate free riding. Explain the environmental service being commercialized or marketed by pointing out who are the buyers of the public good; who are the providers (sellers) of the environmental service; and how the suppliers are compensated for supplying the environmental service.

Explanation / Answer

a.The concept of debt for nature swap comes into play when a part of the debt incurred by a developing nation is swapped in exchange for the developing country's contribution towards environmental conservation.Environmental conservation can be in terms of promoting bio diversity,being cautious regarding use of limited environmental resources,recycling or banning deforestation.All these meausures contribute to maintain a nation's ecosystem and in return it may generate financial benefits too as by promoting bio reserves the tourism sector of the country gets flourished.In a nutshell debt for nature swaps provides better environmental benefits to every citizen of the country equally and this is how it promotes creation of public goods in terms of environmental benefits.

b.Ecotourism promotes natural areas with flora and fauna where environmental conservation has been done by the government of a nation to attract tourists and also to contribute to the economic development of the local people.These kind of tourism is promoted to raise funds for biological reservation and also for the general well being through employment or creating opportunites to be financially benefitted through promoting local art and culture for the local community.Hence,ecotourism plays a critical role for energy reservation ,water conservation and also promoting local heritage and this is how it contributes to the creation of public goods and services.

c.Bioprospecting is basically discovering new ingredients for a medicine or products from completely natural resources and use it for commercial purpose.Although it is also possible that the ingredient was already known to a particular lesser known community or a primitive civilization but was not accessible for the rest of the world.It involves the search for exotic ingredients from natural resources to use it for ground breaking medical research or medicinal purposes for the well being of the world as a whole and this is how it plas a major role towards creating public goods and services.

d.When a user of land produces agricultural goods in his private land he can become a catalyst to promote bio diversity or wild life.He can produce organic crops without usage of any kind of pesticide or petroleum based fertilizers.If he is a poultry owner then the animals or the birds should be given natural and organic food and should not be injected with an growth hormone.This will improve the local ecosystem and promote sustainable agricultural practices.He can also promote Carbon sequestering which is a process of carbon capture or storing carbon di oxide to create a greater impact in controlling global warming.Reforestation or replanting of trees and not using the agricultural land for any other purposes other than planting trees will help the carbon from atmosphere to be restored into biomass.

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