Wednesday, April 30, 2008

Tragedy of the commons

"Biologist Garret Hardin's now-famous metaphor for the deterioration or "tragedy" of the global commons begins with the notion of a pasture open to everyone in a given village. In such a situation, the herder who overgrazes the most benefits the most, and the person who grazes a herd that consumes only his "share" of the pasture's yield is effectively penalized. But eventually the entire pasture deteriorates. In this case, when overgrazing becomes the "rational" norm, you are punished for doing the right thing, rewarded for the wrong, and all suffer in the end. This outcome fulfills what philosophers going back to Aristotle have foreseen: "What is common to the greatest number has the least care bestowed upon it." Hardin's pasture, however, is not technically about a commons, but an "open access" system where anyone is free to take as much as they want. Commons have historically been extremely well controlled and regulated by the communities to which they belonged; not until colonization and industrialization have they been widely degraded and destroyed.
Nevertheless, the solution to Hardin's dilemma of a deteriorating open access system would be a pasture utility, one that operated independently of the specific grazing and herding needs of the villagers. The utility would be managed to maximize income from grazing fees, and therefore would have no economic interest in overgrazing, since any form of degradation would reduce the value of the utility to its owners. The pasture utility would monitor usage by grazers so that income was maximized. The utility would pay careful and constant attention to yield, growth, rotation, and fencing. The commons would not deteriorate under such a guardianship, and the natural predilection to overgraze would be thwarted.
The pasture utility is a useful model for a mechanism to guard our own commons, whether local or global. Such a utility can maximize the strenghts of both the private and public sectors, without succumbing to the failings of either. Utilities are hybrid enterprises because they combine two unusual features. First, they are regulated by their constituencies through public utility commissions or other forms of public sector input. In return for accepting regulation, they are given monopolies and are guaranteed a certain level of profit. In other words, by allowing some form of public control, they receive a guaranteed return on their investment, a relationship that allows them to create and execute long-term projects, and attract capital while paying low interest rates."

Paul Hawken, The Ecology of Commerce. A Declaration of Sustainability. (Chapter "Pink salmon and green fees").

An example of such a utility would be the Earth Atmospheric Trust (see also this post) for the global commons that our atmosphere is, and where the utility members would be every person on Earth !

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