Tragedy of the Commons

The process of tragedy of the commons was put forth by Hardin in 1968. This process can be used to explain many of the environmental problems that we are facing together. Firstly, tragedy of the commons refers to a situation whereby many individuals consume a shared pool of natural relentlessly resources leading to the ultimate depletion of that resource. The underlying mechanism is that when each individual consume the shared resources, they received 100% of the benefit but the cost of consuming the resource is small as it is divided among all the users.

Here we will use an example proposed by Hardin to better understand how the process of tragedy of the commons occur. Imagining a pasture where each herdsman is free to keep as many cattle as they like.

herding 1

Image: http://commons.wikimedia.org/wiki/File:El_Calafate_sheep_herding.jpg

Each herdsman would definitely seek to maximize the number of cattle he has as each additional cattle means he increase his gains through any benefit from the cattle. The herdsman receives the full benefit (+1) from the additional cattle. However, the cost comes in the form of overgrazing and strain on the pasture but this cost is not bear entirely by the herdsman. Instead, this cost is shared among all the herdsmen (-1/all the herdsmen) who use the pasture. Therefore, each herdsman would simply seek to maximize their benefit causing the depletion of the resources and tragedy of the commons.

Applying to Indonesia Forest Fires

Using this idea of tragedy of the commons we can see that the situation of Indonesia Forest Fire is very similar. The MNCs and farmers are like the herdsmen who simply want to maximize their personal benefit, therefore they chose to employ the cheapest form of clearing the forest albeit it is damaging to the natural resource like overgrazing. Although the forest fires brought about huge cost to Indonesia and other countries around them but this cost is not directly shared by the MNCs and farmers. The cost to them can be considered minimal to each MNC and farmer. Additionally, there are numerous farmers and corporations which are employing the same slash-and-burn method to clear the forest. Therefore, individual farmer and company is likely to think that their impact to the environment is small since they are only burning a small plot of land and even if they refrain from doing so, the other farmers and corporations will do so anyway.

Several solution to this problem has been suggested which include government laws/incentives/regulation, education, community management and moral/religious appeals. I believe that among these solution, the most applicable solution to apply to Indonesia would be government laws and incentives. Only by enforcing regulation that forbid these farmers and MNCs to continue using slash-and-burn method to clear the forest coupled with incentives that rewards them can this problem be reduce. Hefty fines and prosecution against offenders have to be strongly implemented together. Incentives like tax rebates could be given out if companies or farmers managed their area well and there are no signs of fires in their territory. Also the government can try and provide fertilizer to boost the productivity of companies and farmers to discourage them from clearing more forest.

However, because the area of the forest and parties involved is huge, implementing this would require a large amount of money. Furthermore, this system requires strong commitment from the government as they need to constantly monitor the different areas and different parties involved.