The sustainable economics of Elinor Ostrom

It was not by chance that Elinor Ostrom was awarded this year's Nobel prize in economics.

Global warming, along with the preservation of the quality of our environment, has become the most pressing issue facing the human race.

The presentation of this year's Nobel prize in economics to Elinor Ostrom and Oliver E. Williamson--in particular Ostrom's dedicated researches in the inter-relationship between mankind and our ecological system, thus ensuring the sustainability of our water, forest, fishery and other shared resources--should serve as a loud and clear alarm to mankind, who have now come face to face with ecological disasters of unprecedented proportions.

Environmental initiatives continue to thrive in all corners of the Earth. Although many people are well equipped with the knowledge of protecting our environment, few will actually turn that knowledge into practical actions, resulting in the piling up of trash, severe river contamination, illegal logging as well as ill-planned and uncurbed developments. The quality of our environment has deteriorated further, culminating in a broad array of hygiene issues and illnesses.

Elinor Ostrom spent her teenage years in the depth of the Great Depression and the subsequent second world war, when resources were scarce and potable water a rarity. She grew vegetables in her own yard, and made her harvest into canned food. This opened up her eyes to the realisation of the necessity to work with other people for the common interests of all when resources were in short supply. Such a realisation had laid a solid foundation for her future scientific research works.

Judging from this perspective, it therefore came as no coincidence that she was given the Nobel.

It is an undeniable fact that environmental degradation has resulted in global warming. Even in Malaysia, the average atmospheric temperatures have risen over the past three decades.

The meteorological department statistics since 1986 have shown that the temperatures at some of our highland resorts have risen by three to four degrees, mainly because of overdevelopment and unrestrained logging.

At the same time when the polar ice is melting at accelerated rates, apparent climatic changes have also shown up here in Malaysia. Not only do we experience massive thunderstorms, many low-lying areas in our cities and towns have been submerged. As if that is not enough, the "urban furnace" phenomenon that sends nightime temperatures higher in urban areas has become very much a reality today.

If we do not make timely initiatives to salvage our planet, I'm afraid the price we are going to pay is going to be very, very hefty.

The fact that the Nobel panel of judges have very high regards for Ostrom's dedicated works proves that economic analyses do help in the understanding of how most social outfits operate, "driving the studies on economic management from the fringe to the forefront of science."

"Ostrom's economic management researches have testified the non-existence of the 'tragedy of the commons.'"

It has been reported that Ostrom's economic management researches have testified the non-existence of the "tragedy of the commons."

The so-called "tragedy of the commons" denotes the highly likely accelerated depletion of commonly owned resources, in particular natural resources, due to insatiable human greed.

Some scholars have pointed out that the drastic changes in our climate in recent years is a typical instance of the "tragedy of the commons," as evidenced by the sharp decline in marine harvests in North Sea as well as the depletion of oil in the Middle East.

As a matter of fact, from the perspectives of non-existence of the "tragedy of the commons," we have been able to draw the following conclusions:

1. We must value the strategy of a more balanced overall development: In the past, due to the lack of overall development concept and plans, our developments have been concentrated in large cities while the well-being of rural residents was overlooked.

For instance, we moved polluting factories from cities to outlying areas and adjacent rural communities. We should have instead formulated a set of preventive guidelines to curb environmental degradation. The success of environment protection depends very much on the monetary expenses as well as manpower, financial and equipment inputs; and priorities and timetables should therefore be set.

2. An environment evaluation system must be put in place. Works on all new major construction projects, manufacturing plants and public gathering places, should begin only after environmental impact assessments have been carried out.

3. Promote a sense of responsibility in nurturing the necessary expertise. Future entrepreneurs must come to the full realisation that the prevention of environmental degradation is a responsibility which they are obliged to, and the money invested in the equipment for the prevention of environmental degradation should be seen as part of the essential operating cost in their production and service delivery. At the same time, they should also establish research bodies aimed at grooming expertise to fight pollution.

Not believing in the "tragedy of the commons," Ostrom has put her entire lifetime's effort in the researches on outlying and underdeveloped communities, living over a very long period of time with their impoverished residents.

She has to develop a system of living that enables them to share their resources. Probably because of this, Ostrom has been able to stay away from her peers, and quietly serve the weak and forgotten in our world.

Such a manifestation of "caring economics" seems to showcase the most glorious face of humanity.

In the past, Ostrom's works have often skipped public attention, and many in her field of study "were not very well acquainted with her."

But now, with the notable achievements she has made in the study of the interaction between humanity and resources through her self-invented framework, her book Governing the Commons has become the must-read for researchers of public policies. (Translated by DOMINIC LOH/Sin Chew Daily)

MySinchew 2009.10.14