Sunday, October 31, 2010

the Nagoya Protocol

United Nations member states agreed to a set of provisions - dubbed the Nagoya Protocol - aimed at reducing species loss. Read about it here at the NY Times or here at the Guardian.

A critical aspect of the negotiations relates to the property rights associated with goods and services derived from plants and animals. Suppose country A discovers genetic information from a species in country B, and then uses that information (coupled with other inputs, lots of R&D, etc..) to produce and sell a good that earns $X in revenue.

How does requiring A to provide B with a share of X address the basic economic cause of the extinction problem? Lots of topics from our course can be considered: discount rates, common property resources, the importance of property rights (Coase), negative and positive externalities, the distribution of costs and benefits and how that affects individual incentives.

There's some other interesting stuff here, including the requirement of payment for genetic info discovered in the past, the lack of an agreement on how to finance such payments, and the importance of biodiversity for economic growth.


Filorux said...

In a complete dodge of the questions Dr. Schuhmann poses...

I just read

which potentially raises an issue for the Nagoya Protocol. I imagine that there would still be some revenue to share from genetic extraction/development, but will it be enough to accomplish the goals of Nagoya without patents?

I have to admit that the idea that genetic information should not be patented is attractive to me. The article presents the argument from the premise that genetic information, as a part of nature, is a public good and shouldn't be eligible for patenting.

Consider this analogy - stories are information. We have a class of stories which are considered public goods, called 'public domain'. This class includes stories that predate copyright laws, and those for which their copyright has expired. What then, is your opinion of Disney's behavior in regards to Pinocchio? His story was originally written in 1881 by Carlo Collodi, later (1940) adapted by Disney and granted copyright. I have nothing against Disney taking an existing work, innovating, and then redistributing. However, should Disney be the only game in town for Pinocchio for the next century?

If you are not convinced from a public goods point of view, imagine now that the genetic information in question is your own. Say your code contains a mutation that could be the cure for cancer. Imagine what we are saying when someone other than you has exclusive right to that code.

If you look hard enough, you will likely find someone in this world who shares a name with you. It is conceivable even that a mistake could be made by the Social Security Administration such that you share a SSN with someone else - not to mention that SSNs are inadequate for identifying everyone in the world. The only primary key, or unique identifier, that anyone has is their genetic code. Is there any better candidate for private property than your identity? You may choose to sell that property, but should someone be able to "discover" your identity, or part of it, and then patent it for their own use? Shouldn't they have to license its use from you?

Todd Ebner said...

For example, country A having to give country B money for the exploits of new genetic material or something can can be profited from can help save biodiversity. I looked at it from the standpoint that if country B can make money from another country getting valuable information from its resources.It then becomes an incentive for country B to protect its wildlife and biodiversity for the future prospects of making more of a profit than it would have if the country just burned down, say a rainforest. With time, it gives country B an incentive to harness its own valuable information to garner even more profit if it can produce scientists or academia who can study and turn genetic material into pharmaceuticals or other valuable resources to sell and distribute without $X going to to country A.
It then becomes a higher priority to save biodiversity because profits from protecting it can be put into monetary terms instead of a rainforest that another country enters to exploit while we (country B) gets no benefit from preserving.

Kevin said...

If country A can use a resource in country B much better than country B can use it... Then country A should use that resource, however they should pay country B the value (or more) of that resource to country B. This seems similar to the tragedy of the commons. This seems to be a way of internalizing costs so that everything is taken care of more efficiently... When these costs are internalized, generally supply is shifted left which decreases the Q demanded, which could help combat losing biodiversity?

Ryan McKnight said...

The official draft of the Nagoya Protocol, seems to include the possibility of a Pigovian payment mechanism.

On page 23 of 25, one finds the following...

Monetary benefits may include, but not be limited to:

(f) "Special fees to be paid to trust funds supporting conservation and sustainable use of biodiversity"