Environmental Economics Part 1: The Tragedy of the Commons?
Environmental Economics seeks to put a dollar amount on environmental goods (clean air and water) and bads (pollution and contamination) so that we can quantify the costs and benefits that result from preserving or destroying nature. The current climate crisis is partly explained by the economic principle known as the Tragedy of the Commons, with one unique twist.
Welcome back! Summer is sweet in California.
The flowers are blooming—a fragrant perfume of red bud, poppy, lupine, orchid, paintbrush. The rich aroma of petrichor followed the rain. These priceless scents are precious to me like water. There are infinite fantastic natural wonders freely available to us.
Environmental Economics is a relatively new branch of study, originating with our growing awareness of depleting natural resources and environmental services (https://en.wikipedia.org/wiki/Environmental_economics). Basically, it seeks to give an estimated price to goods (like clean air and water) or bads (like pollution and contamination) that do not have a market value as they are not sold. Functioning within a capitalist framework requires that everything be translated to currency, quantified in dollar amounts. This allows decision-makers and stakeholders to weigh costs and benefits, compare options, and plan strategies and contingencies.
A brief overview of a key economic concept: The Tragedy of the Commons partly explains our current climate catastrophe. Every individual shepherd is free to graze their flock in the grassy commons. No one is excluded. But as every individual’s flock consumes more grass, no grass remains. The individual gain comes at great cost to all others. The same concept holds true for overfishing.
In climate collapse, the atmosphere is “the commons” because anyone is free to pollute it but we all reap the damage sewn. I am very much in support of the Polluter Pays Principle: the companies polluting must pay the cost of remediation, clean-up, abatement, prevention, etc. Regarding CO2 emissions, fossil fuel companies are largely responsible for selling a damaging product and lying about it, but we do nothing to hold them accountable. In my opinion, all fossil fuel companies should be financing our transition to renewable energy, whether through taxes or fines.
I believe unfettered, unmitigated, unbridled greed is the only reason why U.S. oil companies, knowing full well 40 years ago that climate change was worsening over time (https://www.scientificamerican.com/article/exxon-knew-about-climate-change-almost-40-years-ago/), didn’t just reform themselves as solar, wind, hydro, and geothermal companies, phasing steadily over the last four decades. Fearing future loss of profit, they launched massive misinformation campaigns, well-funded by deep pockets, hiring the same consultants as the tobacco industry. If we burn, ExxonMobil won’t help us. We must demand they shoulder the financial burden of the problems they created and exacerbated with their deception.
This short article had an optimistic take, suggesting we actually aren’t doomed to tragedy: https://ccs.sciences.ncsu.edu/climate-change-and-the-tragedy-of-the-commons/. Essentially, the author notes that in a true commons, one individual’s choice to not graze their flock allows another shepherd to seize the opportunity, and the grass still continues to degrade. But in climate change, reducing one’s CO2 emissions at any level (personally, locally, regionally, nationally) does not incentivize others to emit more. Reductions always accrue universal benefits. If we go renewable, we won’t incentivize China and India to pollute more. They are seeking to improve air quality as we did. Likely the reduction in U.S. emissions combined with our advancements in technology will inspire (or in certain instances, put geopolitical pressure on) other nations to reduce emissions as well. I’ll gently remind leaders that China generates 3 times more renewable energy than we do.
Sometimes, as I enjoy the bright red brick buildings of historic Main Street, I daydream of the Weaverville of tomorrow. I picture an electric streetcar going up and down the main drag, from Trinity Brew Co. to TAPAC, which will have a multi-level parking garage in the space between the theater and the Redding Rancheria Trinity Health Campus. I envision the multi-use path from TAPAC to Lee Fong Park, lots of bicycles riding safely, with only a few individual vehicles on the road traveling from the coast inland or vice versa. We have electrical vehicle chargers already! Let’s keep it up and pray we don’t reach dead pool.
I don’t mean to end so grimly. It’s just my realism.
Instead, I offer deep gratitude to the many wonderful friends and acquaintances I have met and the opportunities they have graciously provided, to those who have written kind words of encouragement in the paper, and as always, to the Trinity Journal for helping me share these ideas and dreams.