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Gulf Oil Disaster: A Tragedy of the Commons

Donald Price: The Tragedy of the Commons teaches us that private companies can’t regulate themselves because this eventually leads to the tragedies we see in the Gulf of Mexico and the financial tragedies in the global economy.

As most of us view the Gulf oil spill disaster from a distance, it brings home the larger environmental issues that we face as a country and world. The ecological disaster that we are witnessing in the Gulf of Mexico will have profound impacts for decades on the ecosystem throughout the entire food web. We know that there is an intimate relationship between humans and all the Earth’s ecosystems and that this interdependence is becoming more acute as the human population size increases and international trade accelerates.

bp's oil spill

Photo by Georgianne Nienaber

In the Gulf, the food web begins importantly with the phytoplankton and zooplankton (small plants and animals) and continues in complex ways to the shell fish, fish, turtles, dolphins, birds and of course humans. As the entire food web is impacted by this disaster, it is clear that it will take an exceeding long time for the ecosystem to recover. We can best see this tragedy sometimes in the fate of the large animals that move away or die in these massive oil spills.

This entire ecosystem also impacts the people of the entire region of the Americas as there are important food resources and livelihoods that are made by millions of people and goods transported inland and around the world. The Gulf of Mexico ecosystem is rightly viewed as a “common” area with many important resources and what is happening today is certainly a tragedy.

This Tragedy of the Commons is not new – the Exxon Valdez is just one other example – and it will likely happen again. The question for biologists and policy makers -- and for that matter the entire peoples of the Americas and world -- is how do we reduce the occurrence of these tragedies?

The lessons learned over the centuries on the sharing of common resources have developed into a general principle that was described by Garrett Hardin in the 1960s as the “Tragedy of the Commons” and has its precedence in the 1830s with William Foster Lloyd in sheep farming. The problem with sheep farming was that some sheep farmers would overexploit the common grasslands for their own sheep, leaving less for others.

The solution advocated was to divide the land into parcels that were individually owned and managed. In this way, the “total costs and benefits” of the resource (grasslands) would be borne by the individual land owner and in an ideal world each land owner would not over exploit their own resource or else their sheep would lose weight or not reproduce as well and eventually they would have reduced herds and profits. The legacy of this division of land continues to today.

This is not a complete nor necessarily appropriate solution for all “common resources,” especially for resources that can’t be divided nor the total costs and benefits borne by one person or group. The solution and appropriate use and management of these large shared resources, such as the Gulf of Mexico, is complex because there are multiple resources and peoples with conflicting costs and benefits.

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The solution in these cases can still be governed by the same general solution advocated for sheep farming. The total costs and benefits for a resource(s) must be borne by all those who use the resource. In a complex situation like the Gulf of Mexico, this requires regulation and oversight. Without regulation and oversight of all people and industries, there will be “cheaters” -- people or companies overexploiting resources or cutting corners on safety so they can make more money and take more resources for themselves.

The overexploitation and pollution is exacerbated by the stockholders and investors who put their money with the most profitable companies. People will invest in those companies that make more money and companies that take greater risks and overexploit resources will, on average, make more money. In many cases these companies do not value the environment because by doing so their profit will be reduced and shareholders will go elsewhere with their money and the company’s stock value will go down.

The situation can be further exacerbated if those companies don’t pay the costs to clean up the pollution – they don’t bear the full costs. This doesn’t mean that there are not “good companies” it is just that the good companies will be less profitable compared to companies that exploit resources and cause environmental damage.

The Tragedy of the Commons teaches us that private companies can’t regulate themselves because this eventually leads to the tragedies we see in the Gulf of Mexico and the financial tragedies in the global economy. To ensure sound management of ecosystems and resources requires regulation by all of us who share the common resource. This means the “government” in the broad sense who are the people who ultimately bear the costs and benefits of the entire ecosystem. Good regulation can provide a level playing field for people and companies using the resource. This regulation can ensure that there is fair competition that does not lead to the tragedies we are witnessing.

The companies responsible for the environmental damage must be made to pay all costs of this tragedy to address the immediate concerns for the ecosystem and the livelihoods of communities in the area. It is also important that the costs to clean up the environment be borne by those that cause the damage because this will be a reminder for other companies that they too will bear all costs.

donald price

Governmental regulations must be made better and the people overseeing these industries must be independent and removed from politics as much as possible. These are not liberal or conservative recommendations they are simply observations that are borne out by repeated situations like this in the past. We either learn what works and doesn’t work from case studies and clear evidence or we will be doomed to repeat the tragedies of the commons.

Don Price

Donald Price is a Professor of Biology at the University of Hawaii, Hilo.

Photo by Georgianne Nienaber.