Air Quality as a Common Resource
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Common resources often are renewable. Technically speaking, that means
that the resource increases over time, which allows people to consume a
portion (i.e. fringe units) indefinitely, as long as they do not consume or
damage the core portion (i.e. stock). For example, people can consume
water from a spring, fish from the ocean, or lumber from a forest indefinitely, as long as the amount taken does not cut into the maintenance
stock. There are also non- renewable common resources (e.g. oil, gas, and
minerals), but we will put off considering these for now. Economists often
characterize common resources as being relatively non- excludable (i.e. one
cannot prevent anyone from consuming it) but rivalrous (i.e. one person
using it prevents others from also using it). For example, I can’t prevent
others from fishing in the ocean, but a fish that I caught is no longer available for someone else to catch.
A major difficulty with common resources is that people are chronically
tempted to take more than their fair share of the fringe units for their own
use, even though doing so damages the common resources overall (Parks,
et al., 2013). This can be tempting because resources taken for one’s own use
are entirely for one’s own benefit, but the damage to the common resource
overall is spread out over all the possible users of the resource. A short- term
calculation of costs and benefits, therefore, can lead people to overuse the
common resource – a phenomenon known as the “tragedy of the commons”
(Hardin, 1968).
What happens when common resources get severely overused, with little
or no effective management? One possibility is the complete collapse and
destruction of the commons (e.g. overfishing leads to the extinction of the
fish, or at least a reduction of the core stock to a point that use of the common
resource is no longer possible). Another possibility to address a depleted
common resource is to intervene by placing limits on users – circumspecting
where, when, or how much of the resource can be taken. For instance, limits
can be put on how many fish one person can catch, how many trees can be
felled in a forest, or how much water can be taken from a river. This changes
a common resource into a club good, which means (in economic terms) that
the resource is now excludable (i.e. access is limited) and potentially nonrivalrous (i.e. rules specify how everyone can partake in the resource). There
are also club goods that do not derive from renewable resources (e.g. country
club memberships, cable television, and toll roads), but these are not the
focus here.
Yet another possibility, and of more interest in the present context, is
that some users intervene with contributions that allow the resource to be
maintained. The situation is, at this point, no longer just a common pool
resource but rather a public good. Renewable common resources become
public goods (at least partially) when maintaining core stock requires investment, and that investment is provided by the community of consumers. Both
public goods and common resources are non- excludable; anyone can benefit
from them. But economists consider public goods, unlike common goods,
137
1 3 7
Common resources often are renewable. Technically speaking, that means
that the resource increases over time, which allows people to consume a
portion (i.e. fringe units) indefinitely, as long as they do not consume or
damage the core portion (i.e. stock). For example, people can consume
water from a spring, fish from the ocean, or lumber from a forest indefinitely, as long as the amount taken does not cut into the maintenance
stock. There are also non- renewable common resources (e.g. oil, gas, and
minerals), but we will put off considering these for now. Economists often
characterize common resources as being relatively non- excludable (i.e. one
cannot prevent anyone from consuming it) but rivalrous (i.e. one person
using it prevents others from also using it). For example, I can’t prevent
others from fishing in the ocean, but a fish that I caught is no longer available for someone else to catch.
A major difficulty with common resources is that people are chronically
tempted to take more than their fair share of the fringe units for their own
use, even though doing so damages the common resources overall (Parks,
et al., 2013). This can be tempting because resources taken for one’s own use
are entirely for one’s own benefit, but the damage to the common resource
overall is spread out over all the possible users of the resource. A short- term
calculation of costs and benefits, therefore, can lead people to overuse the
common resource – a phenomenon known as the “tragedy of the commons”
(Hardin, 1968).
What happens when common resources get severely overused, with little
or no effective management? One possibility is the complete collapse and
destruction of the commons (e.g. overfishing leads to the extinction of the
fish, or at least a reduction of the core stock to a point that use of the common
resource is no longer possible). Another possibility to address a depleted
common resource is to intervene by placing limits on users – circumspecting
where, when, or how much of the resource can be taken. For instance, limits
can be put on how many fish one person can catch, how many trees can be
felled in a forest, or how much water can be taken from a river. This changes
a common resource into a club good, which means (in economic terms) that
the resource is now excludable (i.e. access is limited) and potentially nonrivalrous (i.e. rules specify how everyone can partake in the resource). There
are also club goods that do not derive from renewable resources (e.g. country
club memberships, cable television, and toll roads), but these are not the
focus here.
Yet another possibility, and of more interest in the present context, is
that some users intervene with contributions that allow the resource to be
maintained. The situation is, at this point, no longer just a common pool
resource but rather a public good. Renewable common resources become
public goods (at least partially) when maintaining core stock requires investment, and that investment is provided by the community of consumers. Both
public goods and common resources are non- excludable; anyone can benefit
from them. But economists consider public goods, unlike common goods,