Expanding the choices for the global commons: Comparing newfangled tradable allowance schemes to old-fashioned common property regimes

In the years since 1990, when the Clean Air Act Amendments instituted this highly acclaimed scheme of tradable emissions allowances, proponents of tradable environmental rights have spread the idea to other areas, including matters of global environmental concern. Tradable allowances have been widely discussed and partially implemented in ocean fisheries, where they appear as individual fishing quotas (IFQs) for some fish stocks. Similarly, tradable allowances are a key issue in the current worldwide debate over the reduction of greenhouse gases. Even the resistant industrialists of the United States seem to be more willing to go along with global greenhouse gas reduction schemes if these schemes permit emissions trading. This article focuses in part on these hybrid property schemes, or 'tradable environmental allowance' (TEA) systems, not only because they are currently a matter of considerable interest in global environmentalism, but also because they offer especially interesting contrasts and comparisons with CPRs. First, TEAs are like CPRs in that they depart from the Hardin/Ophuls dyadic commons solution. Instead of choosing between Leviathan and individual property, TEAs combine the two: Even though they allocate individual quotas of the resource in question, TEAs are created and policed by governments to a degree far surpassing conventional property rights. Second, and more interestingly, each TEA regime confronts exactly the same problem that a CPR does-the problem of managing a large renewable resource stock in a unitary fashion.