Name: Manuel Grez

Pontificia Universidad Catlica de Chile

Facultad de Ciencias Econmicas y Administrativas

Instituto de Economa

EAE 295C/AGE 305E

ENVIRONMENTAL AND NATURAL RESOURCE ECONOMICS
Assignment #1
Here we face the Open-Access public good problem; this good has the
characteristic of being a public good non-excludable and rivalry, where it is
impossible to differentiate who can and who cannot access this good and the
consumption of someone affects someone elses. This situation is called the
tragedy of commons, when people consume their resources, which are the
base of their sustentation, as fast as they can, not caring about marginal user
cost (futures cost of consuming today), because if I dont consume now,
someone else will do. In other words there is a massive catch of fish without
caring of futures fish supply.
This problem is generated mostly because of lack in information and
consideration. Most fishermen dont really know the consequence in
environment they are producing; the aggregate of everybodys catch is very
high and has already put many species in danger of extinction. They have to
realize that the social welfare reduces a lot more than what their private
welfare increases and that the over fishing today impacts on tomorrows fishing.
Ergo the policy we have to implement needs to attack these two points.
There must be a policy which instructs and inform fishermen, in order to
make them realize the consequences of the over fishing. A way of controlling
the amount of fishing can be by putting taxes depending in the boats fish
extraction capacity or maximum amount extracted, therefore reducing the
incentives of massive fishing. To create conscience in fishermen there is a good
example in a sport called fly-fishing; Catch and release, this conduct is
greatly respected in this sport, in order to maintain the sport in time if someone
catches a fish that is small or female he must release it in good condition in
order that the fish can grows up and reproduce. This conduct isnt supervised
by anyone its just the culture of this sport which makes this policy efficient.
By attacking these points, information and consideration, the result
were seeking is to reduce present amount of fishing to leave for the future.