Tragedy of the Commons - Big History

Transcript

1. Tragedy of the Commons Explaining history through economics Sathya Gopalakrishnan Department of Agricultural, Environmental and Development Economics Guest Lecture: Big History 10/28/2015
2. About me: •Joined OSU in 2011 •PhD in Environmental Economics from Duke University •Research: feedbacks between economic decisions and biophysical processes that impact natural resources •Coastal and marine resources, environmental valuation
3. Environmental economics: an oxymoron?
4. Cause for environmental problems is economic Environmental problems have economic consequences
5. Economics helps us understand the problem And devise solutions
6. Are renewable resources inexhaustible? Huxley (1883): “The cod fishery, the herring fishery, the mackerel fishery, and probably all the great sea fisheries, are inexhaustible: that is to say that nothing we do seriously affects the number of fish. And any attempt to regulate these fisheries seems consequently, from the nature of the case, to be useless.”
7. Atlantic Cod ‣Long-lived, slow to mature ‣Early fishers (e.g., Basque) claimed fish so dense you could walk from Spain to the New World on their backs. ‣Harvest ≈ 250,000 metric tons/yr through 1950s ‣Vital in feeding the world …and Massachusetts The Sacred Cod in MA State House
8. Fisheries around the world Overshoot and collapse Atlantic Swordfish Catch 0 1 2 3 4 5 1950 1960 1970 1980 1990 2000 Thousand Metric Tons/year Pacific Bluefin Tuna Catch 0 4 8 12 16 1950 1960 1970 1980 1990 2000 Thousand Metric Tons/year
9. Fisheries around the world Overshoot and collapse 0 15000 30000 45000 60000 1950 1960 1970 1980 1990 2000 US Atlantic Cod Commercial Landings (Metric Tons/Year) http://www.st.nmfs.gov/pls/webpls/MF_ANNUAL_LANDINGS.RESULTS Source: US National Marine Fisheries Service
10. Fisheries around the world Overshoot and collapse 0 200 400 600 800 1000 1200 1400 North Sea herring ban North Sea Herring Catch North Sea Herring Ban in 1977 Fish stock severely depleted even before policy intervention Mark Wise, Common Fisheries Policy of the European Community, New York, Methuen, 1984.!
11. What causes the “race to fish”? Time Annual fish catch Why this persistent trend of overshoot and collapse? Where do the incentives for sustainable harvest lie?
12. What causes the “race to fish”? Time Annual fish catch Why this persistent trend of overshoot and collapse? Where do the incentives for sustainable harvest lie? Greed? Myopic Behavior Overcapitalization -- too many boats Technology? Open access Lack of well-defined property rights Too many people chasing too few fish! Symptoms Cause
13. Tragedy of the Commons •Under open access, every individual has an incentive to extract the resource up to the point where there is zero profit •Over exploitation of the resource even though individuals know that they are collectively worse off. Why does this happen? Garrett Hardin (1915-2003)
15. A choice exercise for you • Suppose you have two options: Play 1 or 2 • You are randomly paired with a classmate • Payoffs: • Option 1: you receive 2 points and your partner receives 0 • Option 2: you lose 1 point and your partner receives 4 How many of you would choose Option 1?
16. Scoring Structure Option 1 Option 2 Option 1 Option 2 Player 1 Player 2 (1’s points, 2’s points) (2,2) (6,-1) (-1,6) (3,3)
17. Scoring Structure Defect Cooperate Defect Cooperate Player 1 Player 2 (1’s points, 2’s points) (2,2) (6,-1) (-1,6) (3,3)
18. Can we avoid this tragedy? Elinor Ostrom Nobel Prize in Economics 2009
19. Economics helps us explain human behavior
20. Questions?