Why the tragedy of the commons cannot be solved with money

The tragedy of the commons is an economic phenomenon that I have encountered many times throughout my education. Growing up I was exposed to economic ideas from my father who is an environmental and developmental economist for USAID. Many of my initial world views came from this lens, based upon the idea that the tragedy of the commons was simply a result of negative market externalities not being considered by the free market. If society could only find a way to make these people who take advantage of the commons for their own benefit pay for their impact, then the invisible hand would fix all these issues.  

I tend to believe in certain situations this would make a difference, such as a cap-and-trade policy to limit the total amount of carbon that can be released into the atmosphere. This would encourage companies to be efficient about how they use their carbon and allow more efficient companies to sell their carbon credits to less efficient companies. The problem I find with this, is that it essentially forces society to put a dollar value on the future lives of people. What price can a person pay today in dollars that can account for a new category of hurricane in the future? This is the question that economists always seem to ask themselves, and to me it seems like an excuse to continue postponing the central existential problem of our world.

 Another problem that I find with financial consequences rather than criminal consequences is that some companies simply have too much money. Today fines are simply a cost of doing business. For example, even the half a billion-dollar fine Purdue pharma will have to pay for starting the opioid epidemic is a drop in the bucket compared to the tens of billions that they have made in the last couple decades off addicting people to oxytocin. LLCs are protected entities as well and so the owners of a company never truly face consequences or lose their own personal wealth when their company goes bankrupt. Another problem we must acknowledge, is that these companies often are the ones funding research to come up with solutions to the problems in a way that doesn’t blame them. Take recycling and carpooling for example. Fossil fuel companies spent tens of millions of dollars to advertise and convince consumers that the blame for fossil fuel emissions rests on their shoulders. If only more people would recycle and carpool the environmental consequences of burning fossil fuels would stop! While these things are good things to do, the vast majority of the benefit from ignoring the negative market externalities go to the profits a few powerful companies rather than subsidizing innovation, industrializing developing nations, or making products cheaper for low income consumers.