The Tragedy of the (Water) Commons

3 Pages Posted: 31 Aug 2020

See all articles by Peter Marcel Debaere

Peter Marcel Debaere

University of Virginia - Darden School of Business; Centre for Economic Policy Research (CEPR)

Abstract

When left unattended, natural resources tend to inch toward depletion, overuse, spoilage, or pollution. Common pastures get overgrazed; lakes are overfished; rivers are polluted, and so on. In the case of water, some may wonder how overuse or depletion is possible, as water is a renewable natural resource. In spite of this, depletion and overuse can occur in a practical sense and on a local level. The reasons for this overuse are often related to the "tragedy of the commons," a situation where individual users of a common resource pursue their self-interest without coordination and thus behave collectively in ways that are not optimal for the resource as a whole. This note explores the concept of the tragedy of the commons in relation to water, considering especially the implications of water's status as an unprotected open-access resource.

Excerpt

UVA-GEM-0174

Dec. 16, 2019

The Tragedy of the (Water) Commons

Across the board, natural resources share certain characteristics. When left unattended, they tend to inch toward depletion, overuse, spoilage, or pollution. Common pastures get overgrazed; lakes are overfished; rivers are polluted, and so on. In the case of water, some may wonder how overuse or depletion is possible, as water is a renewable natural resource. Driven by solar energy and gravity, the global water cycle circulates water indefinitely through the atmosphere, over continents, and in oceans. As such, the total amount of water on earth does not change. In spite of this, depletion can occur in a practical sense, because on a more local level, water can have more of a nonrenewable character. The Aral Sea between Kazakhstan and Uzbekistan is an iconic illustration of this phenomenon. Once one of the largest lakes in the world, it has shrunk to a very small fraction of its original size. While there are many reasons for overuse, they are often related to the "tragedy of the commons," a situation where individual users of a common resource pursue their self-interest without coordination and thus behave collectively in ways that are not optimal for the resource as a whole.

We may not always think about it, but economic transactions and exchanges are possible because of property rights. To be explicit, before a transaction can take place, someone has to own something and the right to transfer it. The particular nature of these property rights and how well they are defined often determines the efficiency of transactions. In particular, the specific nature of the property rights that govern access to natural resources very much determines how resources such as water are withdrawn.

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Keywords: tragedy of the commons, open-access resources, water, natural resource, overuse, property rights, economic exchange, ecology, world economy, public good, average social return, marginal social, private return, optimal return, conservation

Suggested Citation

Debaere, Peter Marcel, The Tragedy of the (Water) Commons. Darden Case No. UVA-GEM-0174, Available at SSRN: https://ssrn.com/abstract=3682604

Peter Marcel Debaere (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=5794

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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