The free-rider problem exists in many different situations. There are different ways to deal with it that have been explored in the economic literature. A key approach to solving the mismatch between private costs and public benefits of an investment is to ensure coordination across private and public parties.
For example, the National Trust is a private charity that works to conserve land and property of national significance.[1]These properties and land are of cultural, historical and natural importance and therefore exhibit a positive externality—the benefits for the UK population are beyond the benefits for the owner of … Continue reading As a charity, the National Trust relies on membership fees, revenue from land and property, and government support to carry out its work.[2]The National Trust (N.D.), ‘Our acquisitions’. This combination of private ownership and some public support allows land and property of cultural, historical and natural importance to be protected.
One potential solution can be drawn from the role of the government in supporting and coordinating the management of other national assets that generate value for the UK. For example, there are parallels between English law and natural capital—just as English law facilitates economic activity, natural capital provides services that underpin the functioning of the economy (see Box 5.2). The UK government has recognised these issues and started working to protect and promote the value of UK natural capital. For example, 28% of the UK’s land area is protected in some way.[3]Joint Nature Conservation Committee (2020), ‘UKBI – C1. Protected areas’. Similarly, 25% of UK waters (21.8m hectares) are protected to some degree.[4]Ibid. In 2020, the government also launched an online resource for measuring natural capital.[5]UK government (2020), ‘Enabling a Natural Capital Approach’, January. The tool attempts to improve decision-making by taking into account impacts on the environment and natural capital.
