Common Access

Resources
Unit 5 - Lesson 6

Learning outcomes:
Describe, using examples, common access resources.
Explain that lack of a pricing mechanism for common
access resources means that these goods may be
overused/depleted/degraded.
Describe sustainability
Fossil Fuel consumption as threat to sustainability poverty threat.
Solutions and pros and cons

Common Access Resources

Not owned by anyone.
Do not have a price.
Available for anyone to use.
Examples:
clean air
lakes, rivers, fish in the open seas
wildlife, hunting grounds, forests
ozone layer, stable global climate.

Common Access Resources

Rivalrous and Non-excludable
Example:Tuna fishing
Rivalrous: the catching of Tuna reduces availability for
others.
Non-excludable: Because there is no price to using the
ocean, it is not possible to exclude anyone.
Common access resources are like private goods in
that they are rivalrous, and they are like public goods
in that they are non-excludable, (Tragakes, pg. 121)

Sustainability
Ability of something to be maintained over a
period of time.
Joint preservations:
Economy: people being able to provide goods to
satisfy needs & wants.
Environment

Sustainability Common Access Resource

0-3 Boats: Constant Average Yield - The first,
second and third boats each catch 4 tonnes - (12
divided 3)
4-6 Boats: Decreasing Average Yield - each
additional boat sent out brings back an average yield
less than before.
>6 Boats: Decreasing Yield - the amount of fish
caught with the addition of the 7th boat is less than 6
Fish were plentiful for the first three boats, but
with
the addition of the fourth, fishing became
.
more difficult because it began to put pressure
on the supply of fish in the ocean. (Tragakes122)

Sustainability of Resources
Sustainable resource use means that
resources are used at a rate that allows them to
reproduce themselves, so that they do not
become degraded or depleted. (Tragakes, 123)
In our previous graph, that means allowing a maximum
of 3 boats to fish. Any boat greater than 3 will not
allow fish to sustain their numbers. At more than 6, we
would soon see extinction.

Fossil Fuel Consumption

Threat to sustainability
Can be represented as a
Negative Production or
Consumption Externality.
Estimating the external cost
of fossil fuel consumption is
difficult because it is a
global issue and therefore
imprecise.

Poverty as Threat to Sustainability

POVERTY: most important cause of environmental destruction
Overexploitation by poor people of their scarce
environmental resources
Lack modern agricultural inputs to buy inputs that preserve
the soils fertility, deplete the soils natural minerals, making
soils less productive.
Higher birth rates and higher population growth, pressures
them to open up new lands for agriculture.
Suitable agricultural land becoming scarce, they cut down
forests in search of new farmland - (Tragakes, 124)

Potential Solutions
1. Legislation & Regulation
2. Carbon Taxes
3. Cap and Trade

Legislation & Regulation

Government can enact laws restricting or
preventing certain activities.
Restrictions on emissions from cars
Requirements for cars to use catalytic
converters to reduce air pollution
Restrictions on emissions from factories and
industrial production.

Carbon Tax
A tax implemented by the government on
firms using fossil fuels in their production
process.
Goal is to increase the cost of production thus
increasing price and decreasing Quantity
Demanded.

Tradeable Permit/Cap & Trade

Governments issue a certain
number of permits allowing
firms to pollute - S-curve is
perfectly inelastic.
If a country does not use all
their permits, they can sell
them to other countries who
need them. They are able to
charge a higher price.

https://mrski-apecon-2008.wikispaces.com/file/view/pollutionpermits_1.jpeg.jpg/108656063/289x266/pollution-permits_1.
jpeg.jpg

Evaluation Permits & Carbon Taxes

For Carbon Taxes:
1.
2.
3.
4.
5.
6.

Carbon taxes make energy prices more predictable.

Carbon taxes are easier to design and implement.
Carbon taxes can be applied to all users of fossil fuels.
Carbon taxes do not require as much monitoring for enforcement.
Cap and trade schemes face strong political pressures to set the cap too
high.
Carbon taxes are less likely to be used to restrict competition between
firms.

Against Carbon Taxes:

1.
2.
3.

Carbon taxes may be too low.

Carbon taxes cannot target a particular level of carbon reduction.
Carbon taxes are regressive.

Sustainability needs...
Funding clean technologies
Removing subsidies for harmful
sustainability threatening goods - oil
subsidies in the USA.
Common access resources face the hurdle
of international cooperation which is difficult.
Every countries priorities are different
making it difficult to come to an agreement.