As noted earlier, the production of
global public goods may entail several actors, both public and private.
For example, the definition and assignment of new property rights (e.g.
pollution permits) and the creation of new markets (for pollution permit
trading) could contribute to the production of "climate
stability". In this case, market forces would help strengthen each
country’s incentive to conserve resources, such as rainforests, by
recognizing their appropriate "scarcity value." Thus, developing
countries would have assets to sell to the rest of the world—possibly at
a market-determined price, a more desirable scenario than the current de
facto practice of exchanging these assets for foreign aid. As
mentioned earlier (in the answer to question 17), the use of aid to
finance global public goods diminishes aid resources devoted purely to
development assistance.
For instance, the case studies by
Castro and Cordero or by Perrings and Gadgil show how developing countries
can provide carbon sequestration services or genetic information to
industrialized countries. Because they are latecomers in the
industrialization process, they still possess many resources in these
areas. Carbon sequestration services and genetic information could thus be
recognized as national (excludable or private) goods and services that
could be allowed to fetch a scarcity price, just like gold and diamonds.
However, unlike the trade in gold and diamonds, trade in national goods
and services would provide benefits to both buyer and seller in the long
run, as it helps ensure a more stable climate.
In addition, an important finding
of the book is that provision of global public goods has both efficiency
and equity dimensions. For example, if financial stability is
underprovided, both rich and poor are affected, but the poor will likely
face the brunt of its costs. Similarly, if the HIV/AIDS epidemic goes
unchecked, poorer countries with lesser resources will likely suffer
higher casualties than richer countries whose populations may have more
means to pay for the necessary drugs.
