1. Goals of today’s lecture Understand the “tragedy of the commons” and its application to environmental issues (and other issues). Look at different approaches to addressing the tragedy of the commons. Introduce Selfishness Week!

2. Synonyms: Self-interested, self-centered, self- absorbed, shortsighted (myopic), looking out for #1. Not hating people (being misanthropic) or caring only about money. (Traffic analogy.) For this set of lectures we will assume that people are and will always be selfish. Theoretical reason: A world full of angels is always going to turn out heavenly—that’s boring. Practical reason: People are mostly selfish. Welcome to Selfishness Week!

3. How much time do most people spend thinking pretty much just about themselves? 1.0-20% 2.20-40% 3.40-60% 4.60-80% 5.80-100%

4. “Individualism and shortsightedness are the greatest problems of the current social system… and the deepest cause of unsustainability.” 1.Strongly Agree 2.Agree 3.Neutral 4.Disagree 5.Strongly Disagree

5. “Freedom to ____ is intolerable” 1.Graze 2.Breed 3.Pollute 4.Consume

6. The main metaphor in “Tragedy of the Commons” is about… 1.Over-grazing 2.Over-fishing 3.Over-polluting 4.Over-consumption

7. Hardin’s solution to the “Tragedy of the Commons” is… 1.“Mutual coercion” 2.“Invisible hand” 3.“Education” 4.“Appeals to conscience” 5.“Vigilante action”

8. Tragedy of the Commons Individual incentives can sometimes lead individuals to make choices that are bad for the group as a whole. Example: The commute game. Imagine a simple world where everybody just goes back and forth between work and home. Only two options: drive or take the bus. Only one goal: shortest possible commute.

9. The commute game If everybody takes the bus, the commute takes 20 minutes (including 10 minutes to walk to the bus stop and wait for the bus). If everybody drives, the commute takes 40 minutes because of traffic jams. The bus gets stuck in traffic just like every other vehicle, so you can always get to work 10 minutes faster by driving.

10. Which is a better social outcome, i.e., outcome for the whole group? 1.Everyone takes the bus. 2.Everyone drives.

11. The commute game If everybody takes the bus, the commute takes 20 minutes (including 10 minutes to walk to the bus stop and wait for the bus). If everybody drives, the commute takes 40 minutes because of traffic jams. The bus gets stuck in traffic just like every other vehicle, so you can always get to work 10 minutes faster by driving.

12. “Invisible hand” “Education” “Appeals to conscience” “Vigilante action” “Mutual coercion”

13. “Invisible Hand” Monday: How are you going to commute to work this morning? 1.Take the bus 2.Drive my car

14. What if the commute takes 140 minutes (up from 40 minutes) if everyone drives, and still just 20 minutes if everyone rides the bus? 1.Take the bus 2.Drive my car

15. “Invisible hand” “Education” “Appeals to conscience” “Vigilante action” “Mutual coercion” Objection to using the “invisible hand”? Sometimes individual incentives can lead people to make personal choices that are bad for the group as a whole.

16. “Education” Tuesday: You must not understand, so let me explain… 1.Take the bus 2.Drive my car

17. “Invisible hand” “Education” “Appeals to conscience” “Vigilante action” “Mutual coercion” Objection to using “education”? Sometimes problems can’t be solved by education alone. (Gasp!)

18. “Appeal to conscience” Wednesday: Don’t be a selfish jerk! 1.Take the bus 2.Drive my car

19. “Invisible hand” “Education” “Appeals to conscience” “Vigilante action” “Mutual coercion” Objection to using “appeals to conscience”? People often act like selfish jerks. (Gasp!)

20. “Vigilante” Thursday: Ride the bus or Big Tony will break your kneecaps. 1.Take the bus 2.Drive my car

21. “Invisible hand” “Education” “Appeals to conscience” “Vigilante action” “Mutual coercion” Objection to using “vigilante action”? Do you really want Big Tony in charge? And what ever happened to democracy and freedom, and stuff like that?

22. Mutual coercion Friday: Ride the bus or Officer Tony will fine you $500. 1.Take the bus 2.Drive my car

23. Vote on Proposition 1: Anyone who drives will get a $500 fine. 1.Yes 2.No

24. “Invisible hand” “Education” “Appeals to conscience” “Vigilante action” “Mutual coercion” Objection to using “mutual coercion mutually agreed upon”? “But what about my freedom?” Garrett Hardin’s response: “Freedom is the recognition of necessity.”

25. The Tragedy of the Commons has two parts 1.It’s better for the group as a whole if everyone makes Choice A rather than Choice B. 2.Each person individually prefers to make Choice B. Under the hood is a negative externality: when I choose B, it hurts you, and when you choose B, it hurts me.

26. Example: Traffic congestion 1.It’s better for the group as a whole if everyone takes the bus. 2.Each person individually prefers to drive. Negative externality: My driving creates an external cost by creating congestion that slows down everyone behind me.

27. Example: Common areas in dorms or group houses 1.It’s better for the group as a whole if everyone cleans up after themselves. 2.Each person individually prefers to leave their dishes in the sink. Negative externality: I create external costs by leaving dirty dishes for my housemates.

28. Example: Splitting the bill at a restaurant 1.It’s better for the group as a whole if everyone orders a moderately priced dish instead of the expensive steak. 2.Each person individually prefers to order the filet mignon. Negative externality: I create external costs by ordering the steak because I only pay 1/n of the cost of my meal.

29. Example: Overfishing 1.It’s better for the group as a whole if everyone limits how much they fish so that there will be enough fish next year. 2.Each person individually prefers to maximize their individual profits by fishing like crazy. Negative externality: When I catch fish, I create external costs by reducing your ability to catch fish next year.

30. Overfishing: Cod www.fishermensvoice.com/archives/...html

31. Example: Dirty coal 1.It’s better for the group as a whole if everyone avoids coal-based energy (the dirtiest, most carbon-intensive fuel) in favor of natural gas, wind, solar, etc. 2.Each person individually prefers to buy coal-based energy because it’s the lowest cost to the individual. Negative externality: My pollution creates external costs (smog, climate change).

32. Example: Voting 1.It’s better for the group as a whole if everyone pays some attention to politics and votes responsibly. 2.Each person individually prefers to watch Ugly Betty. Negative externality?

33. Is human population growth a tragedy of the common??? 1.It’s better for the group as a whole if everyone has just two children so that populations don’t continually rise: 6 billion, 12 billion, 24 billion, 48 billion… 2.Each person individually prefers to have 3 or more children. Is statement #2 true?

34. How many children do you want? 1.One 2.Two 3.Three or more 4.Unsure 5.Zero (no kids) 6.Zero (adoption)

35. Is human population growth a tragedy of the common??? 1.It’s better for the group as a whole if everyone has just two children so that populations don’t continually rise: 6 billion, 12 billion, 24 billion, 48 billion… 2.Each person individually prefers to have 3 or more children. Is statement #2 true? Is statement #1 true?

36. Not every situation is a Tragedy of the Commons! In many situations, individual incentives lead people to make personal choices that are good for the group as a whole. Sometimes we just get lucky. And sometimes this happens because of the “hidden order” that comes out of free- market economics, Adam Smith’s “invisible hand” metaphor.

37. “What would a society motivated by individual greed and controlled by a very large number of different agents look like? There would be chaos.” 1.Strongly Agree 2.Agree 3.Neutral 4.Disagree 5.Strongly Disagree

38. Economists strongly disagree. Arrow and Hahn (1971): “There is by now a long and fairly imposing line of economists from Adam Smith to the present who have sought to show that a decentralized economy motivated by self-interest and guided by price signals… could be regarded, in a well-defined sense, as superior to a large class of possible alternative[s]…” “What would a society motivated by individual greed and controlled by a very large number of different agents look like? There would be chaos.”

39. “Human civilization is like a group of people on a bus barreling towards the edge of a cliff… and nobody is driving the bus.” 1.Strongly Agree 2.Agree 3.Neutral 4.Disagree 5.Strongly Disagree

40. Some economists on the bus are having a great time, drinking whiskey and telling jokes. Others ask: “Aren’t you worried about going over the cliff?” The reply: “Don’t worry... [punch line here?]” “There’s an invisible hand driving the bus!” Two metaphors that we’ll return to: the invisible hand and the tragedy of the commons. “Human civilization is like a group of people on a bus barreling towards the edge of a cliff… and nobody is driving the bus.”

41. Over this century, quality of life for the average person on Earth is going to 1.Increase by a lot 2.Increase by a little 3.Stay about the same 4.Decrease by a little 5.Decrease by a lot

42. The pessimists/Malthusians “Nothing could be more misleading to our children than our present affluent society.” --Paul Ehrlich, The Population Bomb, p. xi. “I wouldn’t be shocked to find out that by 2100 most things were destroyed.” --Climate scientist David Rind, from Field Notes from a Catastrophe, p. 111-12.

43. The optimists/Cornucopians “This is my long-run forecast in brief: The material conditions of life will continue to get better for most people, in most countries, most of the time, indefinitely. Within a century or two, all nations and most of humanity will be at or above today's Western living standards.” -- Julian Simon, quoted in Lomborg’s Skeptical Environmentalist, p. vi.

44. Overfishing: Tuna www.e2.org Decline in population Atlantic bluefin tuna Worth up to $100,000 each (for making sushi) Highly migratory. www.bigmarinefish.com/loading_901_lb_giant.jpg

46. Solution: Ban fishing? www.makah.com Advantage: This works! (Whale populations have rebounded, Marine Protected Areas work) Disadvantage #1: This is not economically efficient or equitable for most fisheries. Disadvantage #2: What about tribal rights to fish?

47. Solution: Limit fishing? Restrict types of boats, types of gear, etc. Limit annual catch (TAC: (Total Allowable Catch) www.greenpeace.org/raw/image_full/internation... Advantage #1: These can help limit overfishing Disadvantage #1: Economically inefficient. Disadvantage #2: There’s still a race for fish that can be dangerous and inefficient.

48. The race for fish Fish today—while you still can—before the TAC (Total Allowable Catch) limit is reached for the year! Example: the 2005-2006 Alaska king crab season lasted just 4 days (250 boats caught 14m pounds) Dangerous for workers, consumers get frozen fish upload.wikimedia.org/.../220px-Redkingcrab.jpg www-rohan.sdsu.edu/.../Ocn_books.htm

49. Solution: “Privatize the commons”? Combine a TAC (total allowable catch) limit with private property rights over that catch. Individual Tradeable Quotas (ITQs) makes it possible to “own” part of this year’s catch. Advantage #1: The TAC limit overfishing. Advantage #2: No race for fish (b/c of ITQs). Disadvantage #1: Biological complications. Disadvantage #2: Equity? (Who gets ITQs?) Note: This is just like carbon cap-and-trade!!!

50. Goals of today’s lecture Understand the “tragedy of the commons” and its application to environmental issues (and other issues). Understand different approaches to addressing the tragedy of the commons. Get a close-up look at the tragedy of the commons in the context of fisheries.