Question

How do “maximum sustained yield” and “economically efficient” harvesting rates for a renewable resource such as a fishery compare? How can the structure of property rights with “open access” resources lead to the “tragedy of the commons”? What policies should be implemented to achieving desirable outcomes when managing renewable resources?

Answer 1

Part 1- comparison of “maximum sustained yield” and “economically efficient” harvesting rates for a renewable resource such as a fishery:

we can compare them through the catch rate of fishery and growth rate of fishery. The harvesting will be sustainable and economically efficient when the catch rate is less than the growth rate, if it exceeds than the harvesting will become unsustainable and economically inefficient.

Part 2- the structure of property rights with “open access” resources lead to the “tragedy of the commons” : because when there is open access without any restriction exploitation of resources and their misuse increases which leads to tragedy of the commons as our resources are limited.

Part 3- following policies should be implemented to achieving desirable outcomes when managing renewable resources:

• Restrictions on the excess use of resources
• Heavy taxation on high polluting industries
• Regulations to check the emission of hazardous waste and pollutants in the environment
• Increase in the use of quotas, rationing and standards etc. to manage renewable resources