Thursday, May 18, 2006

Global warming: A tragedy of the commons

Garrett Harding’s classic 1968 article The Tragedy of the Commons is well worth recounting when we think about the climate change problem:

The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy.

As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, "What is the utility to me of adding one more animal to my herd?" This utility has one negative and one positive component.
1. The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of the additional animal, the positive utility is nearly + 1.
2. The negative component is a function of the additional overgrazing created by one more animal. Since, however, the effects of overgrazing are shared by all the herdsmen, the negative utility for any particular decision­making herdsman is only a fraction of - 1.

Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another.... But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit -- in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.

The tragedy of the commons idea is interesting in its (mis)appropriation by both the left and right. The left tend to use it to point out flaws in capitalism and markets, while the right use it to argue for private property and against public ownership. The tragedy of the commons certainly shows that unregulated or unfettered markets don’t always produce good outcomes, but not markets per se. On the other hand, the commons idea does not suggest that public ownership is a problem – only that unregulated common ownership is a problem. As Harding states in the article, there are several possible solutions, only one of which is private property:
What shall we do? We have several options. We might sell them off as private property. We might keep them as public property, but allocate the right to enter them. The allocation might be on the basis of wealth, by the use of an auction system. It might be on the basis of merit, as defined by some agreed-upon standards. It might be by lottery. Or it might be on a first-come, first-served basis, administered to long queues. These, I think, are all the reasonable possibilities. They are all objectionable. But we must choose--or acquiesce in the destruction of the commons...

The earth’s atmosphere is the ultimate common resource. And, of course, private property is not going to be an effective solution to this problem: how do you allocate and enforce property rights to a stable climate when the problem is suffered by and contributed to by the actions of every person on the planet?

As Harding says:

In a reverse way, the tragedy of the commons reappears in problems of pollution. Here it is not a question of taking something out of the commons, but of putting something in--sewage, or chemical, radioactive, and heat wastes into water; noxious and dangerous fumes into the air, and distracting and unpleasant advertising signs into the line of sight. The calculations of utility are much the same as before. The rational man finds that his share of the cost of the wastes he discharges into the commons is less than the cost of purifying his wastes before releasing them. Since this is true for everyone, we are locked into a system of "fouling our own nest," so long as we behave only as independent, rational, free-enterprisers.

The tragedy of the commons as a food basket is averted by private property, or something formally like it. But the air and waters surrounding us cannot readily be fenced, and so the tragedy of the commons as a cesspool must be prevented by different means, by coercive laws or taxing devices that make it cheaper for the polluter to treat his pollutants than to discharge them untreated. We have not progressed as far with the solution of this problem as we have with the first.

The solution as Harding describes it is "legislating for temperance" or "mutual coercion mutually agreed upon". In the next post I’ll look at how international agreements – notably the Kyoto Protocol – are measuring up to the need to legislate temperance in greenhouse gas emissions.

1 comment:

Veggie Friendly said...

I guess this is also the rebuttal to the argument that Australia doesn't need to sign up to Kyoto because our CO2 production is neglible compared to the rest of the world.

Nice photo, BTW!