Natural assets such as water, carbon, and air are foundational to the economy and essential for life on earth. However, with the exception of some nascent carbon trading schemes, these assets have largely remained immune to market-based forces. This has led to overuse and exploitation of these resources, with costs borne by society in the form of what economists call “negative externalities.” Sociologist Garrett Hardin describes this as the tragedy of the commons—a situation where a shared common resource is depleted because there is no system to govern its use or consumption.
