Common access resources & sustainability
Syllabus: Explain, using examples, common access resources.| Definition: Common access resources are natural resources including forests and pastures, fisheries, oil and gas fields, national parks, grazing lands and irrigation systems, which are characterised by the difficulty of excluding people from using them. |
Syllabus: Apply the concept of sustainability to the problem of common access resources.
As a result of the inability to exclude people from using them and therefore to charge a price for their use, over-consumption, degradation and depletion of these resources occur. Indeed, the use by one individual or group of the resource will mean that less of that resource is available for use by others. This distinguishes common access resources from pure public goods, which exhibit both non-excludability and non-rivalry in consumption.
Syllabus: Examine the consequences of the lack of a pricing mechanism for common access resources in terms of goods being overused/ depleted/degraded as a result of activities of producers and consumers who do not pay for the resources that they use, and that this poses a threat to sustainability.
The consequence of the actions of producers and consumers, who do not pay for the resources they use, creates a threat to sustainability and, therefore, the availability of common access resources for future generations (babies yet to come).
Syllabus: Discuss, using negative externalities diagrams, the view that economic activity requiring the use of fossil fuels to satisfy demand poses a threat to sustainability.
In the diagram on the left,
which should be very familiar to you, the vertical difference between
the Private Cost (MPC) curve and the Social (MSC) curve is the
externalç costs.
This time the external costs
are borne by future generations as current production and/or
consumption depletes the amount available now while the resource is not
able to be renewed until well into the future.
The origin of the study of common access resources dates back to medieval land tenure in Europe, where herders were entitled to graze their cows on common parcels of land for free. The result was over-grazing and the degradation of the land. The problem was described and analysed by Garrett Hardin in his article 'The Tragedy of the Commons', which appeared in the Science journal in 1968. Hardin explained that it was in each herder's interest to put any additional cows he acquired onto the grazing land, even if the quality of the common was damaged for the whole community. This was considered to be a rational economic decision by the individual herder, because each additional cow added to the individual's 'marginal utility', while the damage to the common land was shared by the entire group. However, the consequence of these individual rational economic decisions was market failure because these actions resulted in the degradation, depletion or even destruction of the resource to the detriment of all users and, therefore, society in general.
Think of the Onceler in The Lorax (Singing) - If I didn´t do it then someone else would! Now that´s a very good point...Mr Onceler
Syllabus: Evaluate, using diagrams, possible government responses to threats to sustainability, including:
- legislation,
- carbon taxes,
- cap and trade schemes, and
- funding for clean technologies.
