In our poster we argue that something similar happens with GDP. So a tragedy of the common happens all the time. It can be something as inconsequential as replacing the water from a community water cooler. Most people won't do it because you assume that some one else will. Below is an example of what I mean by how GDP is a tragedy of the commons.
Even the collapse of the local economy may be seen as increasing the GDP. As the goat herders are trying to save the land they may slaughter additional goats, buy fertilizer, get some seeds, buy fencing to block off an area so it can regenerate from the goats. All of these things are seen as beneficial to the economy when it is actually very destructive to this aspect of the economy.
So what can we do about it? Well there are some different metrics that can be used to measure well being while taking into account sustainability, such as Green GDP. China actually attempted to implement this, but decided against it as it lead them to have smaller growth numbers and may have put them at a competitive disadvantage. Timmy and I believe that some good ways to deal with this, is to focusing on what is preventing people from adopting more sustainable technologies, and then trying to create incentives to drive further adoption. We're finding that this problem is a bit of a catch-22, you can't get people to adopt the different measurements without people adopting green technologies, but you can't get huge investment in green technologies without incentives from a new indicator.
Further reading/Video watching:
Bergh, C.J.M. van den (2009), The GDP paradox, Journal of Economic Psychology
20 (2009) 117-135
Gardiner. 2001, "The real tragedy of the commons" Philosophy and Public Policy Vol 30, No. 4
Tim Jackson, writer of the book “Prosperity without growth” for instance http://www.youtube.com/watch?v=_Jq8WUp1x8k (7:19)
David Korten, writer of the book “Agenda for e new economy” for instance: http://www.dailymotion.com/video/xgeykn_david-korten-on-ways-to-create-an-economy-that-values-life_lifestyle (13:42)
Hans Rosling: New insights on poverty and life around the world http://www.youtube.com/watch?v=YpKbO6O3O3M (20:55)