WEBVTT - The Tragedy of the Commons 0:00:01.440 --> 0:00:07.680 Welcome to Stuff You Should Know, a production of iHeartRadio. 0:00:11.119 --> 0:00:13.680 Hey, and welcome to the podcast. I'm Josh, and there's 0:00:13.840 --> 0:00:18.520 Chuck and it's just us again, Jerry who And this 0:00:18.560 --> 0:00:20.760 is stuff you should Know. That's right. 0:00:21.640 --> 0:00:26.560 Another Econ edition. Typically not my favorite, but you know, 0:00:26.760 --> 0:00:28.639 this one I could wrap my head around for the 0:00:28.640 --> 0:00:29.120 most part. 0:00:30.200 --> 0:00:32.120 I think that's one of the reasons why it's had 0:00:32.159 --> 0:00:35.800 such an enormous impact on the world. Yes, because it 0:00:35.880 --> 0:00:39.160 is so easy to wrap your head around. We should 0:00:39.159 --> 0:00:41.360 probably say, we're talking about the tragedy of the Commons. 0:00:42.200 --> 0:00:45.720 And for those of you who aren't familiar, it's this idea, 0:00:45.800 --> 0:00:51.600 this concept that if you have a shared resource a commons, say, 0:00:52.760 --> 0:00:55.360 and people are able to use it at their own 0:00:57.000 --> 0:01:02.000 leisure for their own purposes. Event as they seek to 0:01:02.040 --> 0:01:07.320 maximize their profits, they're going to overuse this commons and 0:01:07.640 --> 0:01:12.080 inevitably it'll be ruined because people can't have anything nice. Essentially, 0:01:13.080 --> 0:01:13.360 you know. 0:01:13.319 --> 0:01:16.679 It's funny, you're gonna laugh at me here, they're all 0:01:16.680 --> 0:01:20.319 gonna laugh at you. Central the central area of my 0:01:20.440 --> 0:01:24.080 high school was called the Commons. Yeah, and it just 0:01:24.240 --> 0:01:26.800 occurred to me thirty five years or so after I 0:01:26.840 --> 0:01:28.960 graduated that that's what that meant. 0:01:29.840 --> 0:01:31.480 Oh, I see, I thought you were going to say, 0:01:31.520 --> 0:01:34.360 like my teenage years were the tragedy of the comments. 0:01:34.959 --> 0:01:37.320 No, I just I don't know. I never thought about 0:01:37.360 --> 0:01:38.959 the word because it was when you're in high school, 0:01:38.959 --> 0:01:41.240 it's just sending the comments will meet the commons. But 0:01:41.319 --> 0:01:43.040 it never occurred to me that that's what that meant, 0:01:43.080 --> 0:01:46.319 just like a common area sure by everybody. 0:01:45.959 --> 0:01:48.280 It didn't either to me. I know exactly what you're 0:01:48.280 --> 0:01:50.840 talking about. There was, if not high school, then maybe 0:01:50.840 --> 0:01:54.080 middle school. There was some school where that was called 0:01:54.080 --> 0:01:56.760 that too. Yeah, and I wonder if it was like 0:01:56.800 --> 0:02:00.920 a surreptitious shot at kids, like they're all sheep, because 0:02:01.440 --> 0:02:04.960 I don't think that's true. But one of the major 0:02:05.120 --> 0:02:09.000 uses for commons traditionally has been for grazing. That's a 0:02:09.040 --> 0:02:11.239 really good example. If you've let a bunch of people 0:02:11.280 --> 0:02:16.280 graze on a shared resource, but they're taking what they 0:02:16.320 --> 0:02:19.200 can from that resource to make money for themselves to 0:02:19.240 --> 0:02:25.280 support themselves, then just because humans are rational, selfish, horrible beings, 0:02:26.280 --> 0:02:29.760 that metal or that high school cafeteria will be ruined. 0:02:30.000 --> 0:02:32.760 Yeah, that's right. And the idea of the tragedy of 0:02:32.760 --> 0:02:36.959 the commons started out in nineteen sixty eight an article 0:02:37.000 --> 0:02:41.120 from Science, the journal Science. It was called the Tragedy 0:02:41.160 --> 0:02:43.040 of the Commons, and it was by a biologist named 0:02:43.040 --> 0:02:46.440 Garrett Hardin, and he was sort of piggybacking on a 0:02:46.520 --> 0:02:52.000 nineteenth century English mathematician and economist named William forsteror not Foster. 0:02:51.840 --> 0:02:56.600 I would say, piggybacking or hijacking. 0:02:56.200 --> 0:03:01.440 Hijacking William Forster Lloyd. And you mentioned grazing, and this 0:03:01.480 --> 0:03:04.080 is sort of the thought experiment Harden went with, which 0:03:04.120 --> 0:03:06.400 is like, you have a you know, a grazing field, 0:03:06.840 --> 0:03:09.679 and let's say three farmers have use of it, and 0:03:09.680 --> 0:03:12.320 they're letting their cows and cheap and you know grays 0:03:12.360 --> 0:03:16.200 out there. But at some point one of them is 0:03:16.240 --> 0:03:18.480 going to get an extra fat cow that they sell 0:03:18.520 --> 0:03:22.160 for pretty good money. And they're like, hey, well, if 0:03:22.160 --> 0:03:24.760 that worked out, maybe I can add like an additional cow, 0:03:25.480 --> 0:03:28.919 and maybe it'll make you know, the value of all 0:03:29.000 --> 0:03:31.640 of these cows go down a little bit, including my own, 0:03:31.720 --> 0:03:34.200 because they're not getting as fat because I've added another 0:03:34.240 --> 0:03:36.680 cow here, right, But if I can sell it for 0:03:36.760 --> 0:03:39.080 this much money and it's only costing me a fraction 0:03:39.160 --> 0:03:41.040 of that, for you know the. 0:03:43.880 --> 0:03:45.080 Won't you extra cow? 0:03:45.600 --> 0:03:47.680 Well, I mean it would only cost a fraction of 0:03:47.760 --> 0:03:51.440 loss of resources for the other cows. Like I'm still 0:03:51.480 --> 0:03:54.400 coming out ahead and so bad to being bada boom, 0:03:54.720 --> 0:03:55.520 that's what I'm going. 0:03:55.480 --> 0:03:59.080 To do, right Yeah. So if everybody was making one 0:03:59.120 --> 0:04:02.520 dollar off of their caw when everything was being raised unsustainably, 0:04:02.680 --> 0:04:06.440 then if you add one more cow, now everybody's making 0:04:06.960 --> 0:04:10.280 eighty five cents off of their cows because you're starting 0:04:10.280 --> 0:04:14.200 to overtax the commons. But that person who added that cow, 0:04:14.480 --> 0:04:16.960 that's an extra eighty five cents they wouldn't have had before, 0:04:17.080 --> 0:04:18.119 right yeah. 0:04:18.160 --> 0:04:19.839 And if you're able to sell that cow for like 0:04:19.920 --> 0:04:23.440 five bucks, that eighty five cents is a pittance compared 0:04:23.440 --> 0:04:25.640 to what you're making on the other side. 0:04:25.839 --> 0:04:31.480 Right, So there's always, under the logic of the tragedy 0:04:31.520 --> 0:04:35.320 of the comments, there's always a reason to add another cow, 0:04:35.680 --> 0:04:37.960 and add another cow, and add another cow, because your 0:04:38.040 --> 0:04:42.039 returns are always going to be more than the cost 0:04:42.839 --> 0:04:45.159 that you can offset with the returns. Right. 0:04:45.520 --> 0:04:48.760 Well, that and you're also on the assumption that like 0:04:49.040 --> 0:04:50.720 everyone else is going to be adding cow. So I'm 0:04:50.760 --> 0:04:52.719 not going to be the only sucker not adding cows. 0:04:53.160 --> 0:04:56.839 Right, So you're either a sucker or you're just somebody 0:04:56.839 --> 0:05:00.719 who wants to survive. Because if people start ad cows 0:05:01.520 --> 0:05:04.080 and you're the one farmer who's like, I'm not going 0:05:04.160 --> 0:05:08.400 to do that. I find that morally repugnant. I really 0:05:08.520 --> 0:05:12.359 like sustainably grazing here, and I'll just take one for 0:05:12.440 --> 0:05:16.200 the team. In very short order, that farmer would find 0:05:16.200 --> 0:05:20.480 that they were no longer making money because exactly because 0:05:20.520 --> 0:05:25.680 each additional cow was taking an additional fraction. So let's 0:05:25.680 --> 0:05:28.280 say that every time you added a cow, it reduced 0:05:28.320 --> 0:05:31.400 the price that all the other cows got by fifteen percent. 0:05:32.400 --> 0:05:35.400 That's not a steady price because if you reduce a 0:05:35.480 --> 0:05:39.040 dollar by fifteen percent, now you're getting eighty five cents 0:05:39.080 --> 0:05:42.240 for a cow. But now when you're adding another cow, 0:05:42.360 --> 0:05:45.640 that reduces that eighty five cents by fifteen percent. So 0:05:45.640 --> 0:05:47.680 all of a sudden, you're making seventy two cents, and 0:05:47.720 --> 0:05:50.240 then sixty one cents and then fifty two cents. Right. 0:05:50.600 --> 0:05:54.359 But again, if you're adding cows, that's always extra almost 0:05:54.400 --> 0:05:57.800 found money. If you're not adding cows, then the cows 0:05:57.839 --> 0:06:00.400 that you had originally are now getting less and less 0:06:00.440 --> 0:06:03.160 and less, until you're making zero money, so you are 0:06:03.360 --> 0:06:08.480 forced into adding cows. And that's why it's considered the tragedy. 0:06:08.480 --> 0:06:11.240 You're why Garrett Harden called it the tragedy of the 0:06:11.279 --> 0:06:16.920 comments because inevitably, under these circumstances, which are have long 0:06:16.960 --> 0:06:21.880 been considered to be universal circumstances, basically the commons will 0:06:21.920 --> 0:06:25.719 always get ruined and depleted and everybody will be totally 0:06:26.520 --> 0:06:27.200 up the creek. 0:06:27.520 --> 0:06:31.440 That's right. And if Harden was basically like, there's a 0:06:31.440 --> 0:06:34.599 couple of solutions here. You can either divide this area 0:06:34.680 --> 0:06:37.839 up and now each person has their own little private 0:06:37.880 --> 0:06:40.679 part of the past year that they're only in control 0:06:40.760 --> 0:06:42.159 of and no one else can get on it and 0:06:42.200 --> 0:06:45.680 graze there, or a government a body is going to 0:06:45.720 --> 0:06:47.840 have to step in and regulate this stuff and manage it. 0:06:48.880 --> 0:06:51.000 And you know, if you listen to Harden, and we'll 0:06:51.000 --> 0:06:53.080 talk a little bit about the problems with this guy 0:06:53.120 --> 0:06:56.440 in a second, Yeah, but if you listen to Harden, 0:06:56.520 --> 0:06:59.040 he'll say, when you divide the things, this thing up 0:06:59.040 --> 0:07:01.640 and make it just private it and everyone you know 0:07:02.720 --> 0:07:06.599 is incentivized to basically preserve their plots and do it 0:07:06.640 --> 0:07:13.400 sustainably so their profits are maximized. With, you know, making 0:07:13.400 --> 0:07:15.480 sure the land isn't ruined so they can keep those 0:07:15.520 --> 0:07:16.600 profits maximized. 0:07:17.080 --> 0:07:20.680 Yeah, because now it's their land and they suddenly realize, oh, 0:07:20.720 --> 0:07:24.680 this is a finite resource. If I start to degrade 0:07:24.760 --> 0:07:27.559 this land, it's only coming out of my profits because 0:07:27.600 --> 0:07:30.920 the other farmer's land is not degraded. So I'm the 0:07:30.920 --> 0:07:34.320 only one in competition with myself here, really, and I 0:07:34.520 --> 0:07:37.400 need to make sure that this land is preserved because 0:07:37.440 --> 0:07:39.800 now it's the gold of the goose that laid the 0:07:39.840 --> 0:07:41.480 golden egg, and I need to keep it nice and 0:07:41.520 --> 0:07:46.520 healthy and happy. That's the direct result of privatization, as 0:07:46.520 --> 0:07:49.200 far as Garrett Harden was explaining, as far as the 0:07:49.200 --> 0:07:53.320 tragedy of the Commons goes right, simple solution, just give 0:07:53.360 --> 0:07:55.559 people an incentive to take care of it by making 0:07:55.600 --> 0:07:58.920 it their own. And the other way, like you said, 0:07:58.960 --> 0:08:02.360 is government inter And this seems to be what hardens 0:08:02.440 --> 0:08:06.960 big Like this is his favorite. I think solution was 0:08:07.200 --> 0:08:11.080 bring the government in and just say you can't over 0:08:11.480 --> 0:08:14.280 you can't graze more than these number of sheep, and 0:08:14.360 --> 0:08:18.239 if you do, we'll wipe out your entire family line 0:08:18.400 --> 0:08:20.120 something along those those lines. 0:08:20.400 --> 0:08:23.080 Yeah. But here's the thing, like It wasn't like he 0:08:23.160 --> 0:08:26.360 was some big champion of the government, because if you 0:08:26.400 --> 0:08:30.280 read the whole article, Harden is like, and another thing, 0:08:31.520 --> 0:08:34.920 the reason why the world is headed toward a bad 0:08:34.920 --> 0:08:39.200 place or a bad place already is because freedom to 0:08:39.240 --> 0:08:42.160 breed is intolerable. So there's just too many people. We're 0:08:42.160 --> 0:08:45.200 making too many babies, and the welfare state that the 0:08:45.200 --> 0:08:49.360 government is encouraging is taking away the natural consequence of 0:08:49.400 --> 0:08:51.480 what happens if you have too many kids, like they're 0:08:51.520 --> 0:08:53.199 going to not be able to sustain that, and the 0:08:53.280 --> 0:08:56.120 kids are going to starve to death. So we're overbreeding. 0:08:56.720 --> 0:08:59.680 And all of a sudden, everyone's going whoa, whoaa, whoa. 0:09:00.000 --> 0:09:03.840 And he said and another thing, he said, this overbreeding, 0:09:04.120 --> 0:09:06.640 it could actually be a strategy where a cohesive group 0:09:06.679 --> 0:09:09.320 could come along to increase their power. And they're like, 0:09:09.320 --> 0:09:11.280 wait a minute, are you talking about the great replacement? 0:09:11.559 --> 0:09:14.600 And he said, I don't know what that is, right, 0:09:14.679 --> 0:09:16.679 and they said, well, it'll be a thing at some point. 0:09:17.080 --> 0:09:18.760 He's like, I like the ring of it though, Yeah, 0:09:18.760 --> 0:09:23.560 it's catchy, so yeah. Yeah. His whole thing was we 0:09:24.840 --> 0:09:30.040 using scare quotes are overbreeding, meant poor non white countries 0:09:30.040 --> 0:09:34.120 are overbreeding. Right, that was basically his whole thing, and 0:09:34.160 --> 0:09:38.600 that yes, because there was such thing as international aid 0:09:39.280 --> 0:09:41.360 in the way of food, in the way of money, 0:09:42.640 --> 0:09:48.400 that that people could just keep having kids and knowing 0:09:48.440 --> 0:09:50.959 that the western wealthier governments were going to take care 0:09:51.000 --> 0:09:53.160 of him. And he was like, that's that's not what 0:09:53.240 --> 0:09:56.439 we should be doing. And here's why the tragedy of 0:09:56.480 --> 0:09:59.839 the commons. And to say that, by the way, the 0:10:00.440 --> 0:10:05.560 I read another paper of his two called Lifeboat Ethics, 0:10:07.360 --> 0:10:11.520 the Argument against Helping the poor. Yeah, hell is the subtitle, 0:10:12.080 --> 0:10:14.360 so we really just put it out there. But he 0:10:14.440 --> 0:10:18.520 basically said, Okay, let's imagine that all of the countries 0:10:18.559 --> 0:10:23.200 in the world are lifeboats. Some are ridiculously overloaded with people, 0:10:23.320 --> 0:10:27.880 others the wealthier, more advanced ones. Let's say that they're 0:10:27.880 --> 0:10:30.040 in a lifeboat that seats one hundred and they only 0:10:30.080 --> 0:10:33.640 have ninety people, but there's tons of people swimming around 0:10:33.679 --> 0:10:37.720 them trying to get into the lifeboat. Do you pick 0:10:37.840 --> 0:10:40.880 ten people out of these, you know, thousands of people 0:10:40.920 --> 0:10:45.000 out there to let come into your lifeboat? If so, 0:10:45.040 --> 0:10:47.920 how do you pick those people? What do you tell 0:10:47.920 --> 0:10:51.760 the people you don't pick? And he ultimately concludes that 0:10:53.000 --> 0:10:56.040 just don't help anybody, then you don't have to worry 0:10:56.120 --> 0:10:59.560 about playing favorites or anything like that. Plus you keep 0:10:59.600 --> 0:11:04.280 your ten person safety buffer in case things change for 0:11:04.400 --> 0:11:08.040 you in your lifeboat, and you're fine. He actually argues 0:11:08.920 --> 0:11:12.079 against guilt. You shouldn't feel any guilt, and as a 0:11:12.120 --> 0:11:14.040 matter of fact, we shouldn't put guilt on people for 0:11:14.679 --> 0:11:18.440 making decisions like these because they're just smart. And then secondly, 0:11:18.720 --> 0:11:21.199 he also says that if you are one of those 0:11:21.200 --> 0:11:24.520 people like that one farmer who is like overgrazing is 0:11:24.559 --> 0:11:26.800 morally repugnant, and now I'm not going to do it. 0:11:27.320 --> 0:11:29.320 If you were like that farmer in this lifeboat and 0:11:29.320 --> 0:11:31.040 you said, I just I can't do this. I can't 0:11:31.080 --> 0:11:33.800 sit there and watch people drown while I'm sitting here. 0:11:34.080 --> 0:11:36.000 I'm going to give up my seat for somebody else. 0:11:37.559 --> 0:11:41.920 Harden argued that just by virtue of a person accepting 0:11:42.720 --> 0:11:46.840 your seat, they are less moral than you, and that 0:11:46.960 --> 0:11:50.040 over time is more people in the lifeboat give up 0:11:50.040 --> 0:11:53.760 their seat for moral reasons. Morality will be replaced in 0:11:53.800 --> 0:11:56.640 this lifeboat with self interest, and then what do you 0:11:56.720 --> 0:12:01.360 have then, So he makes all these like like if 0:12:01.360 --> 0:12:05.000 you're a rational person and you take emotion out of it, 0:12:05.040 --> 0:12:06.800 You're like, you know, I guess that kind of makes 0:12:06.800 --> 0:12:09.000 sense in a little bit, but the moment you add 0:12:09.000 --> 0:12:11.760 in any a drop of humanity to it, you're like, 0:12:11.800 --> 0:12:14.920 this is horrible that this guy wrote a series of 0:12:14.960 --> 0:12:16.120 papers arguing this. 0:12:17.040 --> 0:12:18.960 Yeah, and he, you know, as far as the tragedy 0:12:19.000 --> 0:12:23.040 of the Commons goes, he very explicitly says like, you know, 0:12:23.360 --> 0:12:26.480 you got to prioritize yourself here, and you're you know 0:12:26.600 --> 0:12:28.920 what you're doing and maximize your profits, and if you don't, 0:12:28.920 --> 0:12:31.680 if you have ethics or something, then you're you're not 0:12:31.720 --> 0:12:32.880 a very smart person. 0:12:33.160 --> 0:12:37.040 Right exactly. So this is his whole thing that you know, 0:12:37.160 --> 0:12:40.000 like all of it was over of population. The thing 0:12:40.080 --> 0:12:46.600 is it got diluted or take him very literally, very quickly, 0:12:46.760 --> 0:12:49.560 and it was applied to actual commons as we'll see, 0:12:50.080 --> 0:12:55.880 and just it was stripped of its overpopulation, xenophobia, racism, 0:12:56.320 --> 0:12:59.679 all of that stuff and just got applied to real 0:12:59.720 --> 0:13:03.319 world old commons management. And to say like it changed 0:13:03.360 --> 0:13:05.720 things is the understatement of the century. 0:13:05.800 --> 0:13:07.920 Chok, that's right. Should we take a break. 0:13:08.880 --> 0:14:11.880 Yeah, let's all right, We'll be right back, everybody. 0:13:43.800 --> 0:13:47.480 Okay, So, uh, the tragedy of commons became like the 0:13:48.120 --> 0:13:51.560 dominant way of looking at the world among Western nations 0:13:51.600 --> 0:13:55.959 because it did two things. It said that you can 0:13:56.040 --> 0:14:00.240 solve this problem everyone is going to have. Any time 0:14:00.280 --> 0:14:02.880 you have a shared resource, people are going to deplete it. 0:14:03.040 --> 0:14:04.720 That's what it said, no matter where you are in 0:14:04.720 --> 0:14:08.440 the world, no matter who you are, but we want 0:14:08.440 --> 0:14:11.040 to save these shared resources. Because this paper came out 0:14:11.040 --> 0:14:13.880 at about the same time the environmental consciousness came up, 0:14:14.320 --> 0:14:17.000 so it was like perfect timing for that. But it 0:14:17.080 --> 0:14:21.640 also said, just privatize, buddy. And at that time, neoliberalism 0:14:21.720 --> 0:14:24.600 was on the rise, and they're like, yes, privatize, take 0:14:24.600 --> 0:14:27.040 all these government run things and put them in the 0:14:27.080 --> 0:14:29.280 hands of corporations and we'll all be better off. 0:14:29.960 --> 0:14:32.000 Yeah. And you know, one of the ways that happened 0:14:32.160 --> 0:14:34.120 was and we're going to talk about sort of different 0:14:34.240 --> 0:14:36.920 versions of this here and there in this episode, but 0:14:37.880 --> 0:14:43.280 environmental trading markets emerged and that came from Canada actually 0:14:43.320 --> 0:14:46.080 an economist named J. H. Dales in nineteen sixty eight. 0:14:46.840 --> 0:14:49.000 But the eighties and nineties or when they really kind 0:14:49.000 --> 0:14:52.120 of started flying off the shelf. But that's like when 0:14:52.160 --> 0:14:56.200 the government comes in with a regulation. Let's say to 0:14:56.280 --> 0:14:59.080 cap whatever in this case, like let's say they're capping 0:14:59.160 --> 0:15:00.280 emissions on. 0:15:00.040 --> 0:15:01.640 On baseball caps. 0:15:02.480 --> 0:15:05.680 Baseball cap, I need to get rid of some baseball caps. 0:15:05.760 --> 0:15:06.600 So that's great. 0:15:06.760 --> 0:15:08.520 You have too many? Do you have any good Hawks ones? 0:15:08.560 --> 0:15:10.360 I'm on the I'm on the lookout for those. 0:15:10.480 --> 0:15:12.680 I have one Hawks cap that I wear. 0:15:14.200 --> 0:15:14.680 I gotcha. 0:15:15.000 --> 0:15:16.480 I just gave away a second one because it was 0:15:16.520 --> 0:15:18.560 too big. But your your head is too small for 0:15:18.600 --> 0:15:18.920 this thing. 0:15:20.200 --> 0:15:23.160 It's a really tiny head. I'm like that that one 0:15:23.280 --> 0:15:24.840 Safari hunter and beetle juice. 0:15:24.880 --> 0:15:26.000 Do you know what your hat size is? 0:15:26.920 --> 0:15:29.600 Uh? Like point six point six? 0:15:29.640 --> 0:15:34.000 Okay, that's good. So let's say it's fisheries, because we're 0:15:34.000 --> 0:15:35.600 going to talk about the fisheries a lot. So yeah, 0:15:35.640 --> 0:15:37.720 you know, the government will come in and say, hey, 0:15:38.920 --> 0:15:41.800 you're overfishing, so we're going to cap how many fish 0:15:41.800 --> 0:15:43.720 you can harvest or make it a certain size and 0:15:43.760 --> 0:15:46.680 a certain area or something like that. And then here's 0:15:46.720 --> 0:15:49.480 your permit Fishery A, and here's your permit fishery B 0:15:49.640 --> 0:15:53.560 and fishery C. And they grant these permits. But and 0:15:53.600 --> 0:15:56.920 this is the key to the etm's environmental trading markets. 0:15:56.960 --> 0:16:00.560 The word trade you can trade as i e. Buy 0:16:00.640 --> 0:16:04.840 and sell these permits, which and this is something that 0:16:04.880 --> 0:16:08.160 I don't fully understand, or maybe I do understand, And 0:16:08.200 --> 0:16:12.960 that's the whole point. But if company A is let's 0:16:12.960 --> 0:16:17.440 say it's an environmental like, hey, you're a factory and 0:16:17.720 --> 0:16:21.560 we're incentivizing you to clean up your pollution and here's 0:16:21.560 --> 0:16:23.600 your permit or whatever. If Company A does a really 0:16:23.640 --> 0:16:26.200 good job and does the right thing and comes in 0:16:26.280 --> 0:16:29.600 like way under the amount of emissions that they're supposed 0:16:29.640 --> 0:16:33.480 to hit, by simply selling that to Company B, who's like, man, 0:16:33.520 --> 0:16:36.320 we're not too good at that. I mean, is it creating? 0:16:36.600 --> 0:16:38.920 Like doesn't that kind of defeat the whole purpose? 0:16:39.600 --> 0:16:41.640 No, it doesn't. And we talked about this in the 0:16:41.720 --> 0:16:45.720 acid rain episode. Do you remember whatever happened to acid rain? 0:16:45.800 --> 0:16:46.080 That thing? 0:16:46.160 --> 0:16:46.240 Oh? 0:16:46.320 --> 0:16:50.920 Yeah, it can work, and it does work. We actually 0:16:51.040 --> 0:16:55.640 reduced sulfur dioxide emissions that we were associated with acid 0:16:55.720 --> 0:16:59.720 rain so much. The acid rain went away and it 0:16:59.800 --> 0:17:03.600 was like the ozone layer of like the early eighties, 0:17:03.640 --> 0:17:06.120 I think in seventies, like it was a big scary 0:17:06.200 --> 0:17:08.440 thing and we took care of it because of cap 0:17:08.480 --> 0:17:10.760 and trade schemes. So it can work. 0:17:10.840 --> 0:17:13.920 But how That's what I don't get. If one company 0:17:14.520 --> 0:17:17.919 is lowering their output but another one is increasing theirs 0:17:17.920 --> 0:17:20.679 because they just bought the other companies, then how is 0:17:20.680 --> 0:17:22.280 that a net loss. 0:17:22.040 --> 0:17:24.199 Because of the cap? Because you put the cap at 0:17:24.240 --> 0:17:27.160 something close to a target that you want to reduce 0:17:27.240 --> 0:17:30.760 things to, so you don't make like some sky high 0:17:30.800 --> 0:17:33.600 cap that's more than what you're at now. You make 0:17:33.680 --> 0:17:35.840 it less and then maybe a couple of years later, 0:17:35.880 --> 0:17:38.639 you make it less than that. So those caps, those 0:17:39.160 --> 0:17:43.159 those little shares or whatever, those allowances that they can trade, 0:17:43.800 --> 0:17:46.280 they get more and more valuable the less and less 0:17:46.280 --> 0:17:48.720 they represent because the law is kind of bringing these 0:17:48.760 --> 0:17:52.679 emissions down further and further. So ultimately you're rewarding a 0:17:52.720 --> 0:17:55.560 company by reducing their emissions because they can make money 0:17:56.080 --> 0:17:59.040 selling that to another company, and that other company is 0:17:59.040 --> 0:18:01.960 actually technically be punished because they're having to shell out 0:18:02.000 --> 0:18:04.600 more money than they budgeted for because they're omitting more 0:18:04.640 --> 0:18:09.000 than they are supposed to. So ultimately you're penalizing and 0:18:09.040 --> 0:18:13.040 rewarding through this cap and trade scheme, but you're also 0:18:13.640 --> 0:18:17.400 creating an artificial cap. All these companies could just pollute 0:18:17.480 --> 0:18:20.480 as much as they want, but this government is saying no, 0:18:20.600 --> 0:18:23.120 you actually can't. Here's your level. Here it is divided 0:18:23.119 --> 0:18:26.320 among the ten companies go to town. But does that 0:18:26.359 --> 0:18:26.800 make sense? 0:18:26.880 --> 0:18:30.280 Well? Yeah. The thing I still don't get though, is 0:18:30.480 --> 0:18:36.680 the company that's, you know, buying extra emissions whatever output 0:18:37.280 --> 0:18:39.160 from the company that's like really good at it, are 0:18:39.160 --> 0:18:40.520 they allowed to go over the cap? 0:18:41.240 --> 0:18:44.000 They know they But let's say they have a cap 0:18:44.040 --> 0:18:47.639 to put out ten pounds of CO two, right, yeah, 0:18:47.720 --> 0:18:50.240 and they're going to they know they're putting out fifteen 0:18:50.280 --> 0:18:53.359 that year. Well, this other company that's putting out five 0:18:53.440 --> 0:18:56.040 pounds of CO two that year, they can sell their 0:18:56.040 --> 0:18:59.320 other five pounds, So no one goes over the cap 0:19:00.200 --> 0:19:05.040 total cap, but different companies can contribute different amounts based 0:19:05.040 --> 0:19:08.800 on how much of those allowance shares they can purchase 0:19:08.920 --> 0:19:10.480 or sell. Does that make sense? 0:19:10.560 --> 0:19:12.399 Yeah, I guess so. 0:19:13.000 --> 0:19:15.919 I promise it works. It worked for sulfur dioxide. It 0:19:16.000 --> 0:19:18.479 does work. The problem is is it's also like it 0:19:18.560 --> 0:19:21.640 requires a lot of buy in from industry or really 0:19:22.320 --> 0:19:24.119 heavy handed government regulation. 0:19:24.520 --> 0:19:26.919 Well, either way. It became a big deal in the eighties, 0:19:26.960 --> 0:19:29.520 and by the end of the eighties, the World Bank 0:19:29.800 --> 0:19:33.520 referred to tragedy of the commons as quote the dominant 0:19:33.520 --> 0:19:39.840 paradigm within which social scientists assess natural resource issues. So 0:19:41.520 --> 0:19:43.879 I mean you can't like there's a bunch of different 0:19:43.880 --> 0:19:46.440 policies in a bunch of different areas, so you can't 0:19:46.480 --> 0:19:48.800 just look at the entire thing as a whole and 0:19:48.840 --> 0:19:51.199 say like, well it's been a huge success, Like you 0:19:51.200 --> 0:19:53.520 can pick out something like acid rain or say it 0:19:53.560 --> 0:19:57.879 was success in this case, but there's humans involved, so 0:19:59.320 --> 0:20:01.400 you never can tell. Well, it's not like you never 0:20:01.400 --> 0:20:03.960 can't tell like I say, can forecast, but there's not 0:20:04.119 --> 0:20:07.480 just one big blanket like nope, this is the exact solution. 0:20:07.880 --> 0:20:10.760 Right for sure, And it depends on the on the industry, 0:20:10.840 --> 0:20:13.520 right like you said, acid rain, that was a great 0:20:13.560 --> 0:20:17.639 success story. Fisheries are another example. If you take a 0:20:17.680 --> 0:20:19.720 fishery like you were saying, and you divide up the 0:20:19.760 --> 0:20:26.080 total catch between companies, those companies can actually go around 0:20:26.080 --> 0:20:30.320 and buy you know, huge portions of the other company shares, right, 0:20:30.680 --> 0:20:34.320 and so all of a sudden, they're basically one company 0:20:34.359 --> 0:20:36.439 with all of the rights to catch all of the 0:20:36.440 --> 0:20:39.879 fish in that fishery because they managed to consolidate the 0:20:39.920 --> 0:20:43.840 shares over time. And that's a huge problem that's not 0:20:44.200 --> 0:20:46.800 at all what you want. Like, yeah, that that fishing 0:20:46.800 --> 0:20:50.000 company is still staying within the total number of fish 0:20:50.040 --> 0:20:52.560 that can be caught annually, but they ran all the 0:20:52.600 --> 0:20:55.280 other people out of business. That's so that's not at 0:20:55.320 --> 0:20:57.800 all what you want with it. So there's there's pluses 0:20:57.800 --> 0:21:03.120 and minuses. There's a situation. The thing is is the 0:21:03.160 --> 0:21:06.879 tragedy of the commons has largely been overblown and the 0:21:06.960 --> 0:21:09.600 idea that you can come out on top just by 0:21:09.640 --> 0:21:13.840 privatizing things like natural resources has been a lesson learned 0:21:13.840 --> 0:21:17.199 the hard way. That's just overall, that's not necessarily the 0:21:17.200 --> 0:21:19.399 best way to do it, and it can really really 0:21:19.480 --> 0:21:24.160 harm some groups while enriching others tremendously. 0:21:24.400 --> 0:21:26.360 Well. Yeah, and like in the case of a fishery, 0:21:26.560 --> 0:21:29.800 like if you're a small fishing crew or something, good 0:21:29.880 --> 0:21:32.399 luck kind of working your way up and maybe establishing 0:21:32.440 --> 0:21:36.320 yourself as one of the larger companies, especially if the 0:21:36.359 --> 0:21:38.639 people that are buying these things up are people that 0:21:38.680 --> 0:21:41.520 don't live around. There are these corporations that right that 0:21:41.680 --> 0:21:45.520 don't have necessarily a local interest. And again, while they 0:21:45.600 --> 0:21:49.679 might be like hitting you know, staying under the threshold environmentally, 0:21:49.720 --> 0:21:52.879 it might be working out, but you're consolidating the wealth. 0:21:53.400 --> 0:21:56.119 Sometimes there's regulations on that where they say you have 0:21:56.160 --> 0:21:58.679 to be you know, like on the fishing boat, and like, 0:21:59.200 --> 0:22:00.440 you know, like Chick fil A. If you're going to 0:22:00.480 --> 0:22:02.120 buy Chick fil A franchise, you gotta manage that. 0:22:02.080 --> 0:22:05.960 Thing exactly right. You want that Chick fil A Cadillac. 0:22:05.880 --> 0:22:10.120 Exactly But sometimes there aren't regulations like that. And what's 0:22:10.200 --> 0:22:14.040 been proven over and over, especially with etms, if there's 0:22:14.200 --> 0:22:17.880 a way for a system to be exploited for profit, 0:22:18.000 --> 0:22:20.199 then a company will come along and do it no 0:22:20.200 --> 0:22:20.520 matter what. 0:22:21.200 --> 0:22:24.960 That's basically the neoliberalism tea shirt what you just said 0:22:25.000 --> 0:22:26.320