COMMON ACCESS Resources Pages 5/6 of handout

Common Access Resources/Goods Common access resources (goods) differ from other types of resources as they possess a special combination of characteristics: rivalrous: use by some people reduces the availability for others. (like private goods) non-excludable: not possible to exclude anyone from using it. There is no price and anyone can use them without payment (like public goods)  https://www.youtube.com/watch?v=_Tc6ywqoL6o

Examples Many relate to the environment Natural resources: fossil fuels, ocean, lakes, ozone layer, forest, rain forests, biodiversity, arable land for agriculture Wild and marine life: cows, fish, clams, etc Case of Black Tuna; Dodo Birds  consuming faster than its reproduction (extinction) In all cases, common access resources become a critical issue as they are used and consumed without payment at a pace that is faster than the cycle of life/reproduction, leading to serious environmental degradation, depletion, and possibly extinction Moreover, tremendous negative consequences/ externalities to society and environment: extinct and endangered species, soil erosion (desertification), salinization, global warming and climate change

Graphical Analysis Overuse of common access resources from industrial production and high income consumption activities based on fossil fuels  external costs (depletion or extinction of wild life, ozone layer, air, etc). e.g consequences of global warming The economic and welfare analysis is the Negative production externalities case OR Negative consumption externalities case

Common Access Resources and Sustainability Sustainability refers to the ability of something to be maintained or preserved over time (so that future generations can also use it). The problem of sustainability arises because of conflicts between environmental and economic goals Economic goals involve efforts to maximize the unlimited wants based on scarce resources (it involves an increase in the quantities of output produced and consumed) Environmental goals involve the preservation of the environment Recent case of Bluefin tuna http://www.businessinsider.com/afp-sashimi-trend-helps-edge-pacific-bluefin-tuna-towards-extinction-2014-11

Sustainable Development… can it be achieved? Overuse of environmental resources in the developing economies can be an important cause of environmental destruction Examples Lack of modern agricultural inputs and technology to preserve the soil’s fertility, depleting minerals in soil, thus making it unproductive in the future (desertification/degredation) Cutting down forests and trees to find more room for agriculture (together with the rising population), Lack of clean water, irrigation systems, and sanitation Immense waste disposal impacts the environment  all risk the reproduction and sustainability of the environment

Asymmetric/Imperfect information Pages 5/6/7/8 of handout