Common Access Resources and sustainability

Sustainability is the ability of something to be maintained or preserved over time; it can be explained in terms of the joint preservation of the environment and the economy. It is the incentive among rational users of that resource is to exploit it to the fullest potential in order to maximise their own self gain - CAR possess a special combination of characteristics. Alternative names – Common pool resources or common property resources Typically natural resources e.g. fishing grounds, forests, pastures, and manmade systems for managing natural resources such as irrigation systems The market failure is the overuse or over consumption leading to depletion of the resource because there is no price there are no market signals This is called tragedy of the commons.

It is argued that the lack of a price mechanism for common access resources results in their overuse, depletion and degradation. The consequence of the actions of producers and consumers, who do not pay for the resources they use, creates a threat to sustainability and, therefore, the availability of common access resources for future generations.

- They are rivalrous as their use reduces availability for others, like private goods.

- They are non-excludable as they have a price, like public goods. - A method of reduce emissions of CO2 which is involved in the process of burning fossil fuels

- Aims at taxing the use of fossil fuels in accordance with the amount of carbon each one emits

- “Fuels that emit more carbon are taxed at a higher rate than those emitting less carbon”

- Forces some of the fossil fuel users to face the incentive to switch to fuels that emit less carbon or even no carbon

Examples of countries having carbon taxes: Denmark, Finland, France etc.

- Cap and trade schemes also known as tradable permits

-Tradable permits are similar to permits which allow a producer to emit a certain level of carbon dioxide and can be traded on the free market

Both these legislative methods have pros and limitations but I believe that cap trade permits are more viable because it provides greater flexibility for firms and greater certainty that environmental objectives will be met. An example of it is described in the second video:

Works Cited:

"Market Failure - Common Access Resources." Textbook.stpauls. Triple A Learning, n.d. Web. 10 Jan. 2016. <http://textbook.stpauls.br/Microeconomics/page_176.htm>.

Trickey, Anthony. "Sustainability and Common Access Resources." Web log post. Sinarmas World Academy. EHUB, 18 Nov. 2013. Web. 10 Jan. 2016. <http://blogs.swa-jkt.com/swa/anthonytrickey/2013/11/18/sustainability-and-common-access-resources/>.