Tragedy of the Commons Short Answers

What is meant by the tragedy of the commons?

• When no one owns a resource, it may get over-used, for example fish stocks and deforestation
• People gain a private benefit from a common pool resource such as grazing land without regard to the effects on others.
• Over-use of a renewable resource can lead to a long-term decline in the maximum sustainable yield causing a decline in the stock of natural capital.

Explain one strategy for protecting natural capital

• One strategy would be to cut distorting subsidies to harmful activities, especially for the fossil fuel industry.
• Without government support, many oil platforms and coal mines would no longer be economically viable and would be forced to shut, which would benefit the immediate surrounding natural capital of these sites.
• Their closure would also lead to a fall in market supply of both oil and coal, significantly increasing their market price and creating a substitution effect allowing renewable energy sources to compete.
• Carbon emissions and pollution would both be reduced, leading to both the short run benefit of clearer air and the long-run benefit of mitigating climate change, the single greatest threat to the worlds stock of natural capital.