1. Ecosystem Services, Information, and the Tragedy of the Non-commons

2. Announcements Mexico course
Start reading Local Politics of Global Sustainability

3. Brief Outline Description of ecosystem services
What do we need to know about resources before we can decide how to allocate them?
Tragedy of the non-commons defined
Solutions proposed

4. Ecosystem goods Raw materials = ecosystem structure
Timber, fish, minerals, fossil fuels, etc.
Required for all economic production
Benefits generally privatized
Scarcity price increase innovation of substitutes

5. Ecosystem services Structure generates function= ecosystem services
Life support functions, Nutrient cycling, Water regulation, Climate regulation, Erosion control, etc.
Benefits equally distributed
Loss of structure = loss of function
Scarcity  price increase  innovation

6. Market relevant characteristics of resources

7. Excludability Excludable resource regime Non-excludable
One person/group can prevent another from using the resource
Necessary for markets to exist
Non-excludable
No enforceable property rights
Can’t charge for use
Is this a policy variable?

8. Rivalness Rival resources Non-rival My use leaves less for you to use
My use does not leave less for you to use
Inefficient to ration through prices

9. How do We Allocate?

10. Non-rival, congestible
Allocation Matrix
Excludable
Non-Excludable
Market Good:
Ecosystem structure,
Waste absorption capacity (e.g. SO2)
Open Access Regime:
Unowned ecosystem structure, waste absorption capacity (e.g. CO2)
Rival
Tragedy of the non-commons: patented information
Pure Public Good:
Street lights, national defense, most ecosystem services, unpatented information
Non-rival
Non-rival, congestible
Club or Toll Good

11. Private property and ecosystem structure
Inefficient: Owner ignores critical ecosystem services
Unjust: Ecosystem services are public goods, destroyed for private gain
Unsustainable: Profit maximization may still lead to extinction

12. Example: Brazil’s Atlantic Rainforest
Ecosystem services of rainforest valued at $2006/ha/year
World’s highest biodiversity humid forest converted to pasture yielding $20/ha/year
Causes droughts, floods, erosion, biodiversity loss, microclimate change, etc.
Greedy self interest creates invisible foot

13. Private property and information
Inefficient:
Creates artificial scarcity
Patent = monopoly
Research ignores public goods
Unjust
Knowledge is cumulative
Raises costs for research that promotes the public good or serves the poor
Example: Golden rice, AIDS medicine

14. Patents and distribution (cont.)
Samuel Slater, “Father of American Industry”
Developed countries own 97% of all patents

15. The “Tragedy of the Non-Commons”
Occurs when private ownership is ecologically unsustainable, socially unjust, and/or economically inefficient
Any privately owned resource that provides non-rival benefits

16. Solution
Community ownership and provision of non-rival benefits

17. Allocation of Ecosystem Goods/Services
Macroallocation socially determined
Prices must adjust to socially determined supply, since ecosystem resilience and fecundity cannot adjust to prices

18. Allocating Information
Public financing of research on technologies that preserve or provide public goods
What percent of inventors are independent?
No patents on publicly financed research, or future research that uses it
Eminent domain applied when necessary

19. Conclusions
Solution to “tragedy of the non-commons” is public ownership
We cannot decide how to allocate until we understand nature of scarce resources
Rivalness is critical to allocation
Private ownership appropriate for rival resources
Common ownership more efficient, just and sustainable for non-rival resources
Socialism or capitalism is question of objective analysis, not ideology