Theremaybeexternalitiesbetweennations

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Unformatted text preview: d to protect against undesired transfers of bio matters. Some mechanisms include: • Quarantines • Ban on transfers of certain materials. Compensation for the use of genetic materials are issues of policy concern. • How much should developing nations be paid for the use of their species in developing medicines, new crop varieties, and other products? • How should the royalties for genetic materials within nations be distributed? Shadow pricing and gain from Shadow smuggling smuggling US Labor market Mexico labor market Extra wage For illegal worker Global interdependency Environmental consideration leads to interdependency between nations. There may be externalities between nations: • Production externalities as in the case of acid rain. • Consumption externalities­­people are concerned about human conditions and other countries, hunger, genocide, etc. People are concerned with environmental conditions in other countries. Correction of externality situations may require policies besides trade. • Transfer payments to reduce pollution activities. • Aid to address undesirable situations (hunger, deforestation, etc.) . Humans share some resources globally. Without intervention to address free­rider problems, there may be nonoptimal uses of global common resources. • Destruction of fisheries demonstrate the failure of laisse­faire approaches for global common resources. • Addressing problems of ozone depletion and global warming require collective action between nations. • Example: The gradual use of bans on methyl bromide, ban on aerosols, and others Possible global common Possible problems problems Global interdependency Humans share some resources globally. Without intervention to address free­rider problems, there may be nonoptimal uses of global common resources. • Destruction of fisheries demonstrate the failure of laisse­faire approaches for global common resources. • Addressing problems of ozone depletion and global warming require collective action between nati...
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This note was uploaded on 03/18/2010 for the course ECON C125 taught by Professor Zelberman during the Spring '09 term at University of California, Berkeley.

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