Rethinking Environmental Controls: Management Strategies for Common Resources

Abstract

"This paper considers environmental resources as 'commonses' and compares four methods of managing these commons: (1) doing nothing; (2) excluding newcomers; (3) controlling their manner of use; and (4) creating new individual property rights. Each of these control methods has costs, which dissipate the rents that come from maintaining the commons resource at appropriate levels. The costs are broken down into (a) system costs (e.g., administering and monitoring); (b) individual users' costs (for any additional user equipment, e.g. catalytic converters on cars); and (c) continued overuse or 'failure' costs (that is, continued spillovers due to inevitable management gaps). The best control method should be the one that controls the commons resource with the lowest total cost in rent dissipation. But the total cost of each control method varies according to the pressure on the resource. So 'doing nothing' is cheap when few people pollute the air, but very costly when many do so, whereas property-type systems, such as tradeable emissions rights, might be too expensive administratively when there are few polluters, but might have the lowest total costs when there are many major polluters. The paper finally considers the moral or rhetorical jist of each of the control methods, and queries whether some control methods have rhetorical qualities that make management more acceptable to resource users, and hence cheaper to administer."