Similar to a classic example in economics, "tragedy of the commons".
Public resources refer to those resources that have no clear owners and can be used by everyone for free, such as oceans, lakes, grasslands and other resources. Public resources are often overused because of unclear property rights. The famous fable "The Tragedy of the Commons" illustrates this problem.
This fable is about a small town in the Middle Ages. The most important economic activity in this town is raising sheep. Many families have their own sheep and support their families by selling wool. Since all the grasslands in the town are owned by the residents of the town, each family's sheep can graze freely on the shared grasslands. At first, the residents herded sheep on the grass for free, which did not cause any problems. However, with the passage of time, the motivation of pursuing interests makes the number of sheep in each family increase continuously. Due to the increasing number of sheep and the fixed land area, the grassland gradually lost its self-sustaining ability and eventually became barren. Once there is no grass on the public land, there will be no sheep, no wool, and the prosperous wool industry in this town will disappear, so many families will lose their sources of livelihood.
What caused the tragedy of the commons? Why do shepherds breed so many sheep and destroy the public grass in the town? In fact, the tragedy of the commons is caused by externalities. When a family adds a sheep to graze on the grassland, it will cause losses to the grassland, which is the cost of raising this sheep. But because the grassland is shared, the loss (cost) of raising this sheep is shared by all sheep farmers in the town, and the owner of this sheep only shares a small part of it. In other words, raising sheep on the common grassland has negative externalities. The loss that one family adds a sheep to other families is the external cost of this sheep. Because each family does not consider its external cost but only its cost share when deciding how many sheep to raise, the private cost of sheep raising families is lower than the social cost, resulting in too many sheep. All sheep families in the town do this, and the number of sheep keeps increasing until it exceeds the carrying capacity of the grassland.
The tragedy of the commons shows that when one person uses public resources, it reduces others' enjoyment of such resources. Because of this negative externality, public resources are often overused. The simplest way to solve this problem is to reconstruct the property right of public resources and make it clearly defined, that is, to turn public resources into private goods. In the above example, towns can allocate land to families, and each family can enclose their own grassland. In this way, each family bears the full cost of herding sheep, thus avoiding overgrazing. If public resources cannot define property rights, it must be solved through government intervention. For example, the government controls and collects resource use fees to reduce the use of public resources.
In reality, many public resources, such as clean air and water, oil reserves, fish in the sea and many wild animals and plants, are facing the same problem as the tragedy of the commons, that is, private decision makers will overuse public resources.
For these problems, the government usually controls its behavior or collects fees to reduce overuse.