The Great Barrier Reef is one of the world's great wonders; however, it is facing serious threats due to pollution from coal and farming industries and climate change, which is raising the water temperature. As no one owns the Great Barrier Reef, there are no defined property rights, making it difficult to reach a private market solution to this misallocation of resources.
The farming and coal industries are producing a quantity that is above allocative efficiency due to their negative production externality. The industries are producing pollution that directly destroys the reef and are also contributing to causes of climate change. To make these industries internalize the external costs of their production, a Pigouvian tax by the amount of the external cost would shift the Private Marginal Cost curve to the Social Marginal Cost curve, resulting in the allocatively efficient output. The Australian government, however, is not looking at ways to make the industries internalize the costs of the externality, but is instead pursuing ways to increase water quality and reliance on renewable energy in an effort to save the reef.
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It is a tragedy that human induced climate change is killing the Great Barrier Reef. After reading your post, I researched the Australian government's stance on climate change due to the coal mining industry. Despite ratifying the Paris Agreement in 2016, the Australian government is not fully committed to combating climate change. The Australian Government's Department of Industry, Innovation and Science endorses the coal mining industry as a driving force for exploration in the Australian outback and industrial development for the country as a whole.
This conflict of interest displays how the Australian government receives a private marginal benefit in supporting the coal mining industry because it leads to industrialization that bolsters the economy. This private marginal benefit is greater to the government than the social marginal cost of climate change that is killing the Great Barrier Reef. The government then makes the economically rational decision to continue support for the coal mining industry which gives greater utility to the government than the Great Barrier Reef does. However, the Australian government still has a duty to curb emissions from the fossil fuel industry because of its endorsement of the Paris Accord. Strengthening the terms of the Paris Accord is one solution to ensure government action against climate change to prevent any future damage to reefs and other natural public goods.
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