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Tragedy of the Commons: Overfishing the World’s Oceans Essay

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Introduction
Economic activity and our environment have been closely linked since man first discovered the concept of trade. In the language of economics, the environment has itself, become an increasingly “scarce resource1”. Since economics is about managing these scarce resources, it will be a useful tool when considering some of the environmental issues facing our planet. One of the major concerns confronting the environment today is the overfishing of the world’s oceans, depleting some species to near extinction. With continued advances in technological and industrial proficiency, fishing vessels are able to fish across the globe, further exacerbating the effects of overfishing. Because the oceans are considered a shared or common …show more content…

This market failure exists because the market price for Bluefin Tuna undervalues the full social cost of unrestricted consumption of this once plentiful fish. When negative environmental externalities exist, the private equilibrium price and quantity, as determined by free market supply and demand, is not the same as the social equilibrium. Since social costs are not priced into the individual or organization decision making, when accounting for the intrinsic costs to society (see graph 1), the socially efficient quantity while decline and the socially efficient price will increase. Because overfishing is so widespread and pervasive, coordinated global intervention is necessary through a combination of market-based corrective policies in order to adequately address this market failure.

Market Solutions
One of the distinct features of any common resource is that it is a “non-excludable good1”, meaning no one can be prevented from using what is available. As discussed, the consequence of this scenario is that it will produce a socially inefficient outcome. There are differing theories on how to achieve an economically feasible marginal cost and marginal social benefit equilibrium. The difficulty, of course, is to determine what the socially optimal supply level for Bluefin Tuna should be in relation to fish stock restoration and future sustainability as well as empowering the global community to act in unison. The discussion here

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