Common Property Resources: Theory and Practice Emily J. Wornell

 What are common pool resources  Problems associated with them ▪ The tragedy of the commons  Main perspectives on how to deal with common pool resource problems  Private property and government intervention  What are externalities  Alternative perspectives on common pool resource problems  Complexity of these issues

Maximum utility = positive elements + negative elements Positive = = 1

Maximum utility = positive elements + negative elements Negative = shared between farmers = <-1

Maximum utility = positive elements + negative elements Maximum utility = 1 + (-.25) =.75

Tragedy of the commons

 Characteristics of CPR  Size and carrying capacity  Measurability  Temporal and spatial differences  Amount of storage in the system  Physical movement  Regeneration  Impact of harvesting technologies

Private property rightsGovernment intervention Increased conservation Efficient use of resources Reduced transaction costs

Private property rightsGovernment intervention Prohibition Restriction Incentives/ sanctions

18.2 million in million in 2012

Externality: Factor of production not under the direct control of of the producer - unintended consequences, positive or negative

Externality: Factor of production not under the direct control of of the producer - unintended consequences, positive or negative

Externality: Factor of production not under the direct control of of the producer - unintended consequences, positive or negative

Externality: Factor of production not under the direct control of of the producer - unintended consequences, positive or negative

Externality: Factor of production not under the direct control of of the producer - unintended consequences, positive or negative

Externality: Factor of production not under the direct control of of the producer - unintended consequences, positive or negative

Private property rightsGovernment intervention Decrease negative externalities Benefit from positive externalities

Private property rightsGovernment intervention Decrease negative externalities Benefit from positive externalities What happens when they fail?! Love Canal

Original plan: done in $4.3 billion Newest estimate: done in $13.4 billion Most optimistic timeline: cleanup finished 2063, which is longer than the plant was in operation.

 Alternative perspectives  Open access and group property rights Elinor Ostrom

 Alternative perspectives  Open access and group property rights

Increased population Overexploitation Tragedy of the commons Environmental disaster Increased vulnerability

PopulationEnvironment History Society Politics EconomicsDemographicsGeography