Tragedy of world’s climate commons
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By now, the danger from climate change and other forms of environmental degradation is so evident that it seems crazy to ignore it. And yet the world has failed thus far to devise an adequate response to the problem.
Our first stab at a solution, the 1997 Kyoto Protocol, set only modest goals and failed to include the world’s biggest polluters. The effort in Copenhagen in 2009 to craft a more potent global agreement ended in a breakdown of negotiations.
Our collective failure to take action is not the result of having chosen leaders who are insane or irrational. The reason we seem incapable of coming together to protect the climate is known as the “tragedy of the commons” — a shared resource tends to be rapidly depleted because no single actor considers how their actions affect other users.
In other words, because you reap all of the benefits, but suffer only part of the costs, you are tempted to over-exploit the resource. And, so far, there is little reason to believe that we are on track to find a way to ensure a happier ending.
The soon-to-be-endangered Atlantic bluefin tuna is one example. We have a shared interest in preventing the species from being fished to extinction. And yet individual fishermen have little reason not to catch as many tuna as possible, as any animal that escapes their net will likely end up in another’s. A similar logic applies to countries considering fishing quotas; as a result, bluefin stocks are running low.
One approach to ending the tragedy of the commons was devised some 50 years ago by the economist Ronald Coase.
His solution was to assign property rights to the shared resource, compensating the losers. With private ownership established, market mechanisms could restore efficiency.
Such a solution might work for fish, provided that migrating populations could be tracked; but it is far harder to apply it to something like the climate. How, after all, would one assign property rights to atmospheric composition?
Alternative approach
The alternative approach — embodied by the Kyoto Protocol — is to implement quotas limiting individual actors’ permissible greenhouse-gas emissions. Only then is a market created to allow actors to buy the emissions permits they need and sell those they do not use.
In theory, this approach provides an incentive for the participants to cooperate, as the arrangement’s breakdown would accelerate the depletion that all have agreed to avoid. In practice, however, these types of deals are difficult to conclude and often are violated.
For starters, domestic politics can pose an obstacle to participation in international treaties, especially when policymakers facing re-election are dependent on the support of interest groups with goals that run counter to the public’s welfare.
Decisions made during US President George W. Bush’s two terms in office offer an illuminating contrast.
In 2001, during his first 100 days in office, Bush blocked or overturned many laws and regulations protecting the environment, and he put a definitive end to American participation in the Kyoto Protocol. The mining and oil industries — important sources of support for his next presidential election campaign — had gotten their money’s worth.
Once Bush’s re-election was secured, however, he had less incentive to seek the support of these powerful lobbies. During his second term, Bush created the world’s largest ocean preserve: a 360,000-square-kilometer area around the Hawaiian Islands.
Another impediment to cooperation is geopolitical. If conflict over valuable resources is unavoidable, as examples throughout history suggest, there is little reason for a country not to exploit a given resource to the maximum possible extent prior to the emergence of scarcities. To the extent that some countries believe that resource-based conflict is inevitable in the future, negotiations to limit resource depletion become more likely to break down in the short run.
Of the two obstacles, domestic interest-group politics is the more easily surmountable. Over the past two centuries, political leaders have become more accountable to constituencies within and outside of their countries’ borders, and voters have become less susceptible to lobbying groups and the media.
The geopolitical concerns are more difficult to address. The challenge of persuading certain countries to cooperate is similar to the one governments have often faced in inducing their citizens to contribute to the common good; everyone benefits from good roads, but most people would prefer not to contribute to the cost of their construction.
Petros Sekeris is principal lecturer in economics at the Department of Economics & Finance, Portsmouth Business School. Copyright: Project Syndicate, 2015.www.project-syndicate.org. Shanghai Daily condensed the article.
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