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Abstract
In one way or another, all environmental and natural resource problems associated
with overexploitation or under provision of public goods, arise from incompletely
defined and enforced property rights. As a result private decision makers do not
consider or internalize social benefits and costs in their production or investment
actions. The gap between private and social net returns results in externalities –
harmful effects on third parties: overfishing, excessive air pollution, unwarranted
extraction or diversion of ground or surface water, extreme depletion of oil and gas
reservoirs. These situations are all examples of the ‘The Tragedy of the Commons’.
In this paper, I consider options for mitigating the losses of open access: common or
group property regimes, government tax and regulation policy, more formal private
property rights. I briefly summarize the problems and advantages of each option and
describe why there has been move toward rights-based instruments in recent years:
ITQ (individual transferable quotas), tradable emission permits, and private water
rights. Introductions to the papers in the special issue follow.