Tragedy of the Commons: The Environment
First introduced in 1968 by Garrett Hardin, the Tragedy of the Commons describes the situation in which some public property will continue to be used until there is no net benefit and instead leads to the detriment of everyone involved. Oftentimes there is a decreasing benefit function at play in the situation, which leads to unlimited consumption until this function equals zero. Hardin argued that to prevent this, there needs to be some restrictions to the amount of usage. In other words, to achieve the socially optimal maximization, property rights must be affixed.
Perhaps one of the most poignant examples of this phenomena occurs in situations leading to the destruction of the environment. In the SEED article about global climate change and energy, the Tragedy of the Commons comes into play in various scenarios. One example is the usage of freeways. When there aren’t that many cars on the road, the freeway provides a speedy and stress free route to travel. However, as the number of drivers increases, the time and effort involved in driving the freeway gradually increased until it reaches a critical point after which there is significant amounts of traffic and the net benefit becomes negative. As the cars sit idling and with their motors running, they contribute excessive amounts of emission to the atmosphere – this “extra” pollution occurs as a result of the Tragedy of the Commons. Pollution is also caused by another example – wastewater. As the number of households and companies increase and begin dumping their waste into the water, the water loses its ability to clean itself. This leads to highly polluted water flowing through land, leaving toxins behind and killing wildlife.
A solution to these problems is to affix property rights to the public spaces. For example, charging a toll to use the freeway or a tax for dumping wastewater would greatly reduce the number of users to only those whose benefit from continuing the practice outweigh the cost. This has the possibility of leading to a socially optimal maximum. It’s interesting to note that these examples all relate to the usage of public resources and lead to detriment to the public. This is precisely what Hardin argued in his groundbreaking article and we see it happening in many facets of society.
Source: http://www.planetseed.com/relatedarticle/tragedy-commons