The tragedy of the cli­mate com­mons

Financial Mirror (Cyprus) - - FRONT PAGE -

By now, the dan­ger from cli­mate change and other forms of en­vi­ron­men­tal degra­da­tion is so ev­i­dent that it seems crazy to ig­nore it. And yet the world has failed thus far to de­vise an ad­e­quate re­sponse to the prob­lem. Our first stab at a so­lu­tion, the 1997 Ky­oto Pro­to­col, set only mod­est goals and failed to in­clude the world’s big­gest pol­luters. The ef­fort in Copenhagen in 2009 to craft a more po­tent global agree­ment ended in a break­down of ne­go­ti­a­tions.

Our col­lec­tive fail­ure to take ac­tion is not the re­sult of hav­ing cho­sen lead­ers who are in­sane or ir­ra­tional. The rea­son we seem in­ca­pable of com­ing to­gether to pro­tect the cli­mate is known as the “tragedy of the com­mons”: a shared re­source tends to be rapidly de­pleted be­cause no sin­gle ac­tor – whether a coun­try or a per­son – con­sid­ers how their ac­tions af­fect other users. In other words, be­cause you reap all of the ben­e­fits, but suf­fer only part of the costs, you are tempted to over-ex­ploit the re­source. And, so far, there is lit­tle rea­son to be­lieve that we are on track to find a way to en­sure a hap­pier end­ing.

The soon-to-be-en­dan­gered At­lantic bluefin tuna is one ex­am­ple. We have a shared in­ter­est in pre­vent­ing the species from be­ing fished to ex­tinc­tion. And yet in­di­vid­ual fish­er­men have lit­tle rea­son not to catch as many tuna as pos­si­ble, as any an­i­mal that es­capes their net will likely end up in another’s. A sim­i­lar logic ap­plies to coun­tries con­sid­er­ing fish­ing quo­tas; re­sult, bluefin stocks are run­ning low.

One ap­proach to end­ing the tragedy of the com­mons was de­vised some 50 years ago by the economist Ron­ald Coase. His so­lu­tion was to as­sign prop­erty rights to the shared re­source, com­pen­sat­ing the losers. With pri­vate own­er­ship es­tab­lished, mar­ket mech­a­nisms could re­store ef­fi­ciency.

Such a so­lu­tion might work for fish, pro­vided that mi­grat­ing pop­u­la­tions could be tracked; but it is far harder to ap­ply it to some­thing like the cli­mate. How, af­ter all, would one as­sign prop­erty rights to at­mo­spheric com­po­si­tion?

The al­ter­na­tive ap­proach – em­bod­ied by the Ky­oto Pro­to­col – is to im­ple­ment quo­tas lim­it­ing in­di­vid­ual ac­tors’ per­mis­si­ble green­house-gas emis­sions. Only then is a mar­ket cre­ated to al­low ac­tors to buy the emis­sions per­mits they need and sell those they do not use.

In the­ory, this ap­proach pro­vides an in­cen­tive for the par­tic­i­pants to co­op­er­ate, as the ar­range­ment’s break­down would ac­cel­er­ate the de­ple­tion that all have agreed to avoid. In prac­tice, how­ever, these types of deals are dif­fi­cult to con­clude and of­ten are vi­o­lated.

For starters, do­mes­tic pol­i­tics can pose an ob­sta­cle to par­tic­i­pa­tion in in­ter­na­tional treaties, es­pe­cially when pol­i­cy­mak­ers fac­ing re-elec­tion are de­pen­dent on the sup­port of in­ter­est groups with goals that run counter to the public’s wel­fare.

De­ci­sions made dur­ing US Pres­i­dent Ge­orge W. Bush’s two terms in of­fice of­fer an il­lu­mi­nat­ing con­trast. In 2001, dur­ing his first 100 days in of­fice, Bush blocked or over­turned many laws and reg­u­la­tions

as a pro­tect­ing the en­vi­ron­ment, and he put a de­fin­i­tive end to Amer­i­can par­tic­i­pa­tion in the Ky­oto Pro­to­col. The min­ing and oil in­dus­tries – im­por­tant sources of sup­port for his next pres­i­den­tial elec­tion cam­paign – had got­ten their money’s worth.

Once Bush’s re-elec­tion was se­cured, how­ever, he had less in­cen­tive to seek the sup­port of these pow­er­ful lob­bies. Dur­ing his sec­ond term, Bush cre­ated the world’s largest ocean pre­serve – a 360,000-squarek­ilo­me­tre area around the Hawai­ian Is­lands. Be­cause Bush was con­sti­tu­tion­ally barred from seek­ing a third term, the way was opened for more en­vi­ron­men­tally friendly poli­cies.

Another im­ped­i­ment to co­op­er­a­tion is geopo­lit­i­cal. If con­flict over valu­able re­sources is un­avoid­able, as ex­am­ples through­out history sug­gest, there is lit­tle rea­son for a coun­try not to ex­ploit a given re­source to the max­i­mum pos­si­ble ex­tent prior to the emer­gence of scarci­ties. To the ex­tent that coun­tries be­lieve that re­source­based con­flict is in­evitable in the fu­ture, ne­go­ti­a­tions to limit re­source de­ple­tion be­come more likely to break down in the short run.

Of the two ob­sta­cles, do­mes­tic in­ter­est­group pol­i­tics is the more easily sur­mount­able. Over the past two cen­turies, po­lit­i­cal lead­ers have be­come more ac­count­able to con­stituen­cies within and out­side of their coun­tries’ borders, and vot­ers have be­come less sus­cep­ti­ble to lob­by­ing groups and the media. Fur­ther ed­u­ca­tion of the elec­torate may be the key to speed­ing up this process.

The geopo­lit­i­cal con­cerns are more dif­fi­cult to ad­dress. The chal­lenge of per­suad­ing coun­tries to co­op­er­ate is sim­i­lar to the one gov­ern­ments have al­ways faced in in­duc­ing their cit­i­zens to con­trib­ute to the com­mon good; ev­ery­one ben­e­fits from good roads, but most peo­ple would pre­fer not to con­trib­ute to the cost of their con­struc­tion.

Ac­cord­ing to the Amer­i­can economist Man­cur Ol­son, these types of co­op­er­a­tion prob­lems are eas­ier to solve when there are as few de­ci­sion-mak­ers as pos­si­ble. Within a coun­try, the prob­lem is over­come by pro­vid­ing gov­ern­ments with the co­er­cive ca­pac­ity to col­lect taxes, re­dis­tribute public goods, and me­di­ate con­flicts be­tween cit­i­zens. By ex­ten­sion, one so­lu­tion to the global prob­lem would be for all of hu­man­ity to be ruled by a uni­ver­sal gov­ern­ment, ac­count­able to its con­stituents, and en­dowed with the au­thor­ity to en­force its de­ci­sions.

Such a sce­nario is of course ex­tremely un­likely; na­tion-states will never agree to hand over their sovereignty to a world gov­ern­ment. In the ab­sence of al­ter­na­tives, the best so­lu­tion, it seems, would be a re­duc­tion in the num­ber of ac­tors – a re­turn to a bipo­lar world in which two su­per­pow­ers de­cide for them­selves and their sub­or­di­nates. But, while this so­lu­tion would con­tain the prob­lem of the com­mons, the dan­gers could out­weigh the ben­e­fits. Last time, in­ter­na­tional co­op­er­a­tion was un­der­pinned by fear of blow­ing up the planet. Now, too, fears of mu­tu­ally as­sured de­struc­tion could re-emerge.

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