Have you ever thought about the environmental impact of the items used in your daily life? Are they harming the environment? Perhaps they have a positive effect. For some individuals, this may be the reason they chose these items in the first place.
Yet, this isn’t always the case. What if the production or use of your favorite products threatens the ecosystem? Or worse, what if your consumption threatens the very existence of those products?
While this notion may seem implausible, it turns out there are many goods that are being produced unsustainably, endangering resources, or negatively impacting the environment.
What 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 first 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—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 the harm it could cause to the environment or general public.
It’s helpful for both 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.
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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. 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.
2. Overfishing
As the global population continues to rise, the food supply needs to increase just as quickly. However, overhunting and overfishing have the potential to push many species into extinction. For example, overfishing of the Pacific bluefin tuna has caused an all-time population low of approximately three percent of their original population. This not only endangers the Pacific bluefin tuna, but also risks further marine ecosystem endangerment as a result.
3. Fast Fashion
Overproduction by fashion brands has created extreme product surplus to the point that luxury brand Burberry burnt $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 on the Internet and social media, consumers are constantly purchasing new clothing items and disposing of old, out-of-trend items that ultimately 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 each day for agriculture. Because of this, groundwater supply is decreasing faster than it can be replenished. In drought-prone areas, the risk for water shortage is high and restrictions are often put in place to mitigate it. Some individuals, however, ignore water restrictions and the supply ultimately becomes smaller for everyone.
How Can the Tragedy of the Commons Be Avoided?
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.
Finding 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 the impact of your consumption habits. Unfortunately this response has not grown in popularity, since many consumers feel boycotting a product won’t make 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, there's no incentive for individuals to hold themselves back 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.”
Related: What Does "Sustainability" Mean in Business?
Preventing 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 the use of reusable bags, has started to charge 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 truly 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 both 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 both 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 August 17, 2022. It was originally published on February 6, 2019.
