Abstract: The world of public goods has changed radically in the past quarter century, rendering some textbook discussions and examples quite dated. This is a good time to take a fresh look at both the nature of public goods and the policy options for managing their provision. Privatization and technological advances have combined to change the very nature of public goods provision in many respects. In the environmental field, in addition, there exists a growing volume of privately produced global public bads, such as pollution. In response, Heal suggests using markets to foster the private provision of public goods. If properly structured, markets can solve the problems posed by this type of good. The chapter describes how a global market in pollution permits could reduce pollution levels while assuring an efficient and equitable distribution of the costs of emission reductions. In a second example of the power of markets to overcome cooperation dilemmas, Heal describes how early actions by large firms or countries can accelerate environmental reforms by smaller actors through a process of adoption spillovers.

Keywords: adoption spillovers, environment, global public goods, international environmental treaties, market, provision of public goods, technological change,