1. “The Problem of the Commons: Still Unsettled after 100 Years” by Robert N. Stavins From the problem of overfishing……to climate disruption

2. Background and Context

3. Stavins is a recognized expert in environmental and natural resource economics

4. Stavins situates his article among others seeking to explain problems associated with “the commons”

5. Purpose and Method

6. Stavins wants to make the case for a price on carbon in dealing with climate change Carbon tax Cap-and- Trade Price on carbon Enclosure Taxes Individual Transferable Quotas Market-based remedies Renewable natural resources Non- excludability Open Access

7. Stavins has multiple objectives for this article Descriptive Explain the causes, or at least conditions, facing open-access natural resources Prescriptive Propose the best policy fix for the “ultimate commons problem” of climate disruption

8. Main Conclusions

9. Scarcity plagues renewable resources more than non-renewable ones due to property rights regime Renewable natural resourcesNon-renewable natural resources Common Property Excludable Scarcity Rent Reflected via price signal in the market Increasing Stocks Production  Ee Open Access Non- excludable Scarcity Rent Dissipated throughout the market Decreasing Stocks Production > E MSY

10. Two forms of externality arise in the case of open-access natural resources ContemporaneousIntertemporal

11. Maximizing net benefits of open-access resource production means scaling back to E e Economic efficiency: the point where net benefits are greatest, or where the difference between Total Benefits (TB) and Total Costs (TC) is greatest. Equimarginal rule: the efficient level of production, or resource extraction, is where Marginal Benefit (MB) equals Marginal Cost (MC); where the slopes of TB and TC are the same. (Keohane and Olmstead 2007) Economic efficiency: the point where net benefits are greatest, or where the difference between Total Benefits (TB) and Total Costs (TC) is greatest. Equimarginal rule: the efficient level of production, or resource extraction, is where Marginal Benefit (MB) equals Marginal Cost (MC); where the slopes of TB and TC are the same. (Keohane and Olmstead 2007)

12. Conventional market-based policies can diminish producers’ welfare more than if left unregulated Enclosure and caps/limitsTaxes Tax set at level of rent (NB) Rent transfer from private to public sector  Social Net Benefits,  Producers’ welfare Limit set at EMSY rather than at Ee  MCP,  resource stock Over- capitalization

13. Individual Transferable Quotas (ITQs) compel producers toward economically-efficient outcomes, reducing open-access externalities

14. Commentary & Critique

15. Effective explanation in terms of resource economics, but missing the social and political Descriptive: Explanation and choice of subjects Prescriptive: Economic efficiency ignores distributional justice