countries for education, health care, infrastructure, communications, and
environmental issues. The World Bank is also the largest single source of funds
for large dam projects.
“TRAGEDY OF THE COMMONS”
Garrett Hardin wrote the “Tragedy of the Commons” in 1968, and it appeared in
the journal Science. The story parallels what is happening worldwide in regard to
resource depletion and pollution. The seas, air, water, animals, and minerals are
all “The Commons.” They are there for humans to use. Those who exploit them
become rich. The price of depleting the resources of the commons is an external
cost paid by all people on Earth.
Examples of current environmental problems that parallel the issues of
sustainability brought up in the “Tragedy of the Commons” include:
■ Uncontrolled human population growth, leading to overpopulation
■ Air pollution
■ Overextraction of groundwater and wasting water due to excessive
irrigation
■ Frontier logging of old-growth forests and the practice of “slash and burn”
■ The burning of fossil fuels and consequential global warming
■ Habitat destruction and poaching
■ OverfishingLimits to the “Tragedy of the Commons” include the following:
■ Economic decisions are generally short term, based on reactions in the
world market while environmental decisions are long term.
■ Land that is privately owned is subject to market pressure. For example, if
privately owned timberland is increasing in value at an annual rate of 3%
but interest rates on loans to purchase the land are 7%, this could result in
the land being sold or the timber being harvested for short-term profits.
■ Some “commons” are easier to control than others. Land, lakes,
rangeland, deserts, and forests are geographically defined and easier to
control than air or the open oceans that do not belong to any one group.
■ Incorporating discount rates into the valuation of resources would be an
incentive for investors to bear a short-term cost for a long-term gain.