Updated: Aug 2, 2019
The capacity of the atmosphere to hold and process more greenhouse gases (carbon, methane, several others) has been exceeded. The result is potentially catastrophic, with signs already showing in extreme winds in tornadoes and hurricanes; extremes in cold, heat, drought and rainfall/snow; and ecosystems finding it hard to adjust quickly enough, as represented in massive losses in species. This is a classic Tragedy of the Commons (really, Tragedy of the Open Access, no property) problem, in that the Atmosphere is currently in the main an Open Access resource, meaning everyone is free to put as much waste (and greenhouse gas is a waste when it exceeds capacity) as they wish, as in "free to choose" without bounds.
There have been some attempts to move at least part of this capacity at least into a Common Property regime, as was attempted here in the US, through actions of the US Environmental Protection Agency. Unfortunately, the Conservative Isle has worked hard to stop all such action, moving this Capacity back into the realm of Open Access. Unfortunately, treating it as an Open Access resource, "nobody has property in it", "free to choose to do whatever you want with it" resource, is the perfect storm on our current path to the infamous "Tragedy" highlighted in Hardin (1968).
Could capacity to hold and process greenhouse, especially carbon, gases instead be converted into a Private Property, managed in a Market? Or, perhaps we could convert the Capacity in good balance into a Private&Public-property? Such a good mix and blend, good balance would acknowledge the Metaeconomics the jointness in Self&Other-interest, Private&Public(Common)-Property, Market&Government, and could be productively be used to avoid the Tragedy from overloading the atmosphere (see main Website at https://metaecongary.wixsite.com/metaeconomics ).
The question "Who Owns the Sky?" (Barnes, 2001) is a good place to start. A more focused question, something we can actually answer, is "Who Owns the Atmosphere?" represented in the blanket of gases encircling our Spaceship Earth This blanket regulates temperature such that we Travelers (and all other living creatures, species) can actually function and ride on this Spaceship, even providing access to the oxygen so the Breath of Life actually can be realized!
Who owns the atmosphere, the protective layer of gases around this Spaceship Earth that makes it a place we Travelers can live? The answer is: We all do. It is in effect a common property to all 6 B (heading toward 9B) Travelers; we have a shared Empathy based Other-interest in sustaining it. And, if we fail, we will face perhaps the ultimate Tragedy of the Commons (Pinker, 2018; on how to avoid such Tragedy, see Lynne et al., 2016) ). We are already starting to see the leading edge of that Tragedy, with devastating droughts; floods; out-of -bounds heat and cold; extreme tornado, hurricane and typhoon winds; loss of coral reefs; loss of polar bear habitat; rising sea levels..... just to list a few.
As Hardin (1968) makes clear, the Tragedy of the Commons occurs when unbridled, not tempered Ego based Self-interest goes too far, in effect destroying the resource and system that is the focus of attention. The classic example is a fishery, where individuals find it in their Self-interest to harvest as many fish as possible, as soon as possible, without regard for the Other (shared with other fishers, and consumers of fish)-interest in sustaining the fishery. The Hardin (1968) solution was to create Private Property, moving the resource out of Common Property.
Actually, Hardin (1968) missed the point that a Common Property can actually be a very workable situation, operating as it does with the shared Other-interest in mind. This has been documented in many empirical studies done by Ostrom and colleagues (e.g. see Ostrom, 1992; 2009). Hardin (1968) should, instead, have been titled "The Tragedy of the Open Access", a kind of "free to choose" without bounds situation, where individuals have no reason to do anything other than to maximize their own Self-interest, and, as quickly as they can, using the fastest way (like super large factory fishing ships) possible.
This is what is going on right now in the atmosphere of this Spaceship Earth: carbon suppliers like the oil, coal and gas industry are drilling, pumping, digging and selling as much carbon as fast as they can... with consumers pleased with the "low prices at the pump", with such low prices due to essentially unbounded Open Access to the atmosphere to use it for the wastes, pollutants being released into it. If the Access was costly, i.e. if those selling and buying carbon, had to pay the true cost of putting it into the atmosphere, far less carbon would be used. A low(er)-carbon economy would arise out of an Empathy Economy ... wherein every Spaceship Earth Traveler walked-in-the-shoes of every other Traveler, and as a result joined in sympathy with the shared Other-interest in sustaining the atmosphere.
These true costs could be approached with a price on carbon: Every ton released would pay a Price per ton. This has been considered in the frame...a misnomer, with a negative connotation... of a "carbon tax" : It needs to be reframed as a "carbon price". Establishing the Price of carbon in this way is to say that we, the people, who own the Capacity together as Common Property, will set a Price reflecting the Value we, together, place on this Capacity as viewed from our shared Other-interest in sustaining the atmosphere. Anyone wishing to move forward on their own individual Self-interest to use that capacity has to pay the Price; we could implement this by asking the USEPA to determine the limit on how much carbon can be released year year, in effect creating that many allowances. We could then offer said allowances, every year, at the going Price we think our Common Property is worth, and sell use allowances for that year. If the releases turn out to be too high for that year, we would then raise our shared Other-interest Price for the allowances in the following year, and watch what then happens. If not enough allowances are sold, we could lower the Price the next year. Everyone else... individuals, business, industry... would be on the demand side, paying the Price we post at the beginning of every allowance year. In this case, we the people, through our Common Property, now have a jointly owned asset, that has a Price.
Another way to evolve a Price on carbon... actually a Price on an asset... would be to create an emissions market, not unlike that used to address the limited capacity of the atmosphere to process acid rain in the Northeastern US. Both sulfur emissions and nitrous emissions markets have been operating in the US since the early 1990s, with Prices for both sulfur and nitrous having evolved, with the acid rain problem now within bounds. This approach starts with first recognizing that electric utilities burning coal do not the right to use the atmosphere as an Open Access, free to choose, do anything you want with it, resource. Rather, through the US Environmental Protection Agency (USEPA) we have in effect declared this capacity to handle acid rain is really a Common Property, with everyone owning this capacity together. So, how do we best manage this Common Property, in terms of our shared Other-interest in it?
Intriguingly, as a case in point, for the sulfur release problem, this was done by first asking the US Environmental Protection Agency, acting on our part as Common Property Owners, to determine the capacity of the atmosphere that could be allocated for private use. It was determined the atmosphere could process 18B tons per year, based upon solid empirical research, scientific input and assessment. The USEPA then created 18B 1-ton emission allowances, in effect creating assets, wealth for the utilities. These assets were distributed, through a political process (see Ellerman et al., 2000) for details), to all the major users of the atmosphere for this purpose, which were mainly coal using, electric utilities. Utilities throughout the US could then sell these emission allowances... assets... when it was less costly to reduce emissions, and could buy the allowances on the Market when it was less costly to pay the Price than it was to reduce emissions. This created a financial incentive to find ways to reduce emissions, including finding lower sulfur content fuels, which led to a huge opportunity for the low sulfur coal mines in Wyoming, and the railroads hauling the coal. To this day, 100-car coal trains, 2-3 an hour, pass through the mid-section of the US hauling low sulfur coal to mid-western (e.g. in Chicago area) coal burning electric utility plants. The Self-interest by each utility in operating at a profit is served by selling unused allowances, and, when changes in how much sulfur is released are too costly, continuing to emit sulfur at the Price determined in the Market. We have a balance in the Self&Other-interest, served by the balance, jointness in the Market&Government, Private&Common(Public)-property: Government sets the limits on scientific grounds, the Market allocates efficiently within the limits. The Tragedy... in this case the devastation of acid rain denuding forests and lowering the ph in streams and lakes in the Northeastern US... is avoided.
In effect, starting with the implicit recognition that the capacity of the atmosphere is a Common Property, we together, through the USEPA as our representative, then introduced Private Property in the emissions allowances, essentially Making wealth through creating an asset. The total number of emission allowances in the Market represents our shared Other-interest in the sustainable use of that capacity, in this case to process acid; in effect, the Ego based Self-interest of the Market operating with Private Property in allowances is bounded by the Empathy based shared Other-interest operating with Common Property in the total allowances.
This kind of system could also be established for carbon and other greenhouse gas releases. Based on the empirical, science based knowledge of the atmosphere to hold and naturally process carbon dioxide, for example, emissions allowances could be set by the USEPA... representing our Common Property, Empathy based Other-interest... on how much carbon could be released each year. The diggers, pumpers, and suppliers of carbon would be first given a distribution of this asset, the actual allowance being an asset, at the outset. This would create an incentive for suppliers to reduce the release of carbon, as these allowances will increase in Price through time, especially putting a Price on any new pumping, digging, selling. It would also be expected that these Prices would be passed along to consumers, meaning they, too, will have an incentive to use less carbon based fuel, perhaps moving to electric cars that are powered on solar generated electricity.
Barnes (2001) has in mind an even larger move away from Common Property to Private Property. His proposal starts with the proposition that every Traveler on this Spaceship Earth has a birthright to the capacity of the atmosphere, in effect to the atmosphere and all it's functions writ large. The proposal is that we define this capacity in some kind of unit of capacity that could be allocated to a Traveler at birth. This Traveler could then keep the asset so awarded, sell it, rent it out, whatever pleased the Traveler through time. In effect, everyone would have a Private Property in a part of the atmosphere. See Barnes (2001) for the details of this very ambitious idea.
That is, Barnes (2001) wants to in effect go to a Self-interest, Private Property, Market system, with Government only involved in handing out Private Property at birth. Seemingly a system more akin to the sulfur emissions market in the US could work better. As Metaeconomics teaches, however, this is an empirical question which can be examined using the Metaeconomics Framework and Dual Interest Theory.
Barnes, Peter. 2001. Who Owns the Sky? Our Common Assets and the Future of Capitalism: Island Press, 2001.
Ellerman, A. D., Joskow, P.L., Schmalensee, R., Montero, J-P. and Bailey, E.M. Markets for Clean Air: The U.S. Acid Rain Program. Cambridge, MA: Cambridge University Press, 2000.
Hardin, G. "The Tragedy of the Commons." Science 162, 3859(1968):1243-1248.
Lynne, G.D., Czap, N.V., Czap, H.J., and Burback, M.E. . "Theoretical Foundation for Empathy Conservation: Toward Avoiding the Tragedy of the Commons." Review of Behavioral Economics 3 2016):245-279.
Ostrom, Eleanor. Crafting Institutions for Self-Governing Irrigation Systems. San Francisco: ICS Press, 1992.
Ostrom, Elanor. 2009. Beyond Markets and States: Polycentric Governance of Complex Systems. Nobel Lecture ( available at https://www.nobelprize.org/uploads/2018/06/ostrom_lecture.pdf )
Pinker, Steven. Enlightenment Now: The Case for Reason, Science, Humanism, and Progress. New York: Penguin Random House LLC, 2018.