‘Tragedy of the Commons’ can result when common property rights exist for a scarce resource. For example, a fish swimming free in the open ocean is the legal property of no one. It is common property until someone catches it. Common property rights fail to create individual incentives to economize on the use of resources such as wild fish. A tragedy results when the number of fish caught each year exceeds the sustainable yield of the fishery.
Only by harvesting the common property, catching the fish, can an individual fisher benefit from it. Individual efforts to conserve the scarce common resource–such as limiting the type, size, or number of fish caught–do not directly benefit the fisher making the effort. Any other fisher is free to catch the fish that another refrains from catching. This imbalance of incentives between using and conserving the common resource can cause so many fish to be caught that the fish population decreases to a level too low for the fish to reproduce in commercial quantities.
Many species of fish have been or are being overfished, and many skies are being polluted. Although common property rights create the conditions for overfishing and overpolluting,changes in supply and demand can worsen the extent of both. Government policies can also help or hurt. Economic analysis helps us understand the many sources of overfishing and over-polluting and helps us design solutions to preserve the bounty of the oceans and the lungs of the planet."*
Creating private property rights to the earth’s atmosphere is at least as difficult as creating private property rights to the fish swimming in theearth’s oceans. How is air pollution an example of the Tragedy of the Commons?What are some of the market and non-market methods that might be used to address Tragedy of the Commons problems?