Have you ever considered the environmental impact of the everyday items you use?
While some products might seem harmless, their production and consumption can often threaten ecosystems and deplete natural resources. This phenomenon is known as the tragedy of the commons, and understanding it is crucial if you want to make sustainable choices in your personal and professional practices.
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DOWNLOAD NOWWhat Is the Tragedy of the Commons?
The tragedy of the commons refers to a situation in which individuals with access to a public resource—also called a common—act in their own interest and, in doing so, ultimately deplete the resource.
This economic theory was conceptualized in 1833 by British writer William Forster Lloyd. In 1968, the term “tragedy of the commons” was used for the first time by Garret Hardin in Science Magazine.
This theory explains individuals’ tendency to make decisions based on their personal needs, regardless of the negative impact it may have on others. In some cases, an individual’s belief that others won’t act in the best interest of the group can lead them to justify selfish behavior. Potential overuse of a common-pool resource—a hybrid between a public and private good—can also influence individuals to act with their short-term interest in mind, resulting in the use of an unsustainable product and disregard of the harm it could cause to the environment or the general public.
It’s helpful for firms and individuals to understand the tragedy of the commons so they can make more sustainable and environmentally friendly choices. Here are five real-world examples of the tragedy of the commons and an exploration of the solution to this problem.
Check out our video on the tragedy of the commons below, and subscribe to our YouTube channel for more explainer content!
5 Tragedy of the Commons Examples
1. Coffee Consumption
While a simple cup of coffee might seem harmless, coffee consumption is a prime example of the tragedy of the commons.
According to Statista, about 73 percent of consumers report drinking coffee daily, and four percent have coffee once a week. This overconsumption has led to significant environmental impacts.
Coffee plants are a naturally occurring shared resource, but overconsumption has led to habitat loss, endangering 60 percent of the plants' species—including the most commonly brewed Arabica coffee. Sustainable business practices in agriculture are essential to effectively mitigating negative environmental impacts.
2. Overfishing
As the global population continues to rise, the demand for food increases. However, overhunting and overfishing threaten to push many species into extinction.
For example, overfishing the Pacific bluefin tuna has reduced its population to approximately three percent of its original numbers—posing significant risks to marine ecosystems.
The current state of fish stocks illustrates another risk. According to the United Nations Food and Agriculture Organization, approximately 34 percent of the world's fish stocks are overfished, while 60 percent are fully exploited.
Addressing this issue involves promoting sustainable business practices in fishing and enhancing resource management to prevent environmental degradation.
Related: What Does "Sustainability" Mean in Business?
3. Fast Fashion
Overproduction by fashion brands has created extreme product surplus, to the point that luxury brand Burberry burned $37.8 million worth of its 2018 season’s leftovers to avoid offering a discount on unsold wares.
Furthermore, as new trends emerge rapidly within social networks and social media, consumers are constantly purchasing new clothing items and disposing of old, out-of-trend items that end up in landfills and contribute to pollution.
4. Traffic Congestion
Traffic congestion is one of the best-known modern examples of the tragedy of the commons. According to a study by the Harvard School of Public Health, air pollution from traffic congestion in urban areas contributes to more than 2,200 premature deaths annually in the United States alone.
As more people decide that roads and highways are the fastest way to travel to work, more cars end up on the roads, ultimately slowing down traffic and polluting the air.
5. Groundwater Use
In the United States, groundwater is the source of drinking water for about half the population, and roughly 50 billion gallons are used daily for agriculture. Because of this, the groundwater supply is decreasing faster than it can be replenished. In drought-prone areas, the risk of water shortage is high, and restrictions are often put in place to mitigate it. Yet, some individuals ignore water restrictions, and the supply becomes smaller for everyone.
Related: Listen to Professor Reinhardt discuss climate change and the tragedy of the commons on The Parlor Room podcast, or watch the episode on YouTube.
Ways to Prevent the Tragedy of the Commons
How would you react to discovering that your consumption habits are depleting natural resources? You have two primary options: finding alternative, sustainable products and preventing overconsumption. Preventing the tragedy of the commons means making conscious choices and supporting sustainability in business.
Find Alternative and Sustainable Products
To drive change and avoid the tragedy of the commons, it’s important to boycott the products or brands causing the alleged harm and search for alternatives. Finding sustainable options, rather than carrying on with what Sustainable Business Strategy Professor Rebecca Henderson calls “business as usual,” directly addresses your consumption habits' impact. Unfortunately, this response hasn't grown in popularity since many consumers feel boycotting a product won’t have a large enough impact to make a difference.
The tragedy of the commons shows us how, without some sort of regulation or public transparency of choices and actions associated with public goods, individuals have no incentive to refrain from taking too much. In fact, individuals may even have a “use it or lose it” mentality; if they’re aware of the inevitability that the good itself will be depleted, they may think, “I better get my share while I still can.”
Prevent Overconsumption
You’ve likely encountered examples of the tragedy of the commons in your everyday life; these hypothetical scenarios can offer insight into how to prevent the overconsumption of resources. Consider how you’d respond in the following scenarios:
- During a drought, your town regulates the days and times you’re allowed to water your lawn. How likely are you to disregard these parameters?
- If everyone in your community abides by the town’s lawn-watering regulations, you're more likely to follow them as well. Who wants a bright green lawn while the rest of the town's lawns are brown?
- Your local grocery store, which has always encouraged reusable bags, has started charging for each paper or plastic bag. How likely are you to start bringing your own bags?
- No one wants to pay a premium for something they’ll likely throw away or use as a trash bag. Charging for grocery bags raises the stakes because it involves the customer’s bottom line. Chances are, this change will lead you to keep reusable bags in your car, just in case you need to stop at the grocery store on the way home.
These examples show how, when faced with a public good, individuals can be motivated to cooperate through monetary or moral incentives or penalties. What’s fascinating is that this also holds true on a larger scale.
Remember the previous example of luxury fashion brands burning surplus clothing? Well, Burberry—having heard its customers’ reactions to the burning of inventory, regardless of how sustainably its products were disposed of—has since pledged to stop burning clothes and using real fur.
Developing a Sustainable Mindset
It’s easy for individuals and organizations to fall victim to the tragedy of the commons. However, it doesn’t have to be this way. By developing a more sustainable mindset, you can become better aware of the long-term impact that your short-term choices have on the environment in your personal life and at work.
Are you interested in learning more? Explore our Sustainable Business Strategy course and other business in society courses to discover how you can make a difference and become a purpose-driven leader.
This post was updated on May 20, 2024. It was originally published on February 6, 2019.
