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November 9, 2017

Free Market Solutions to Environmental Issues

Giving the government more power is the wrong way to go when the market can steward resources.

Yuval Levin, vice president of the Ethics and Public Policy Center, states, “Some of what is good about our world is irreplaceable and has to be guarded, while some of what is bad is unacceptable and has to be changed.”

Nothing could be more true in terms of the environment. Some of what is good is irreplaceable, and requires our guardianship: the protecting of species, the sustainability of our forests, oceans and wetlands, and the cleanliness of the air we breathe and water we drink. Yet some of what is bad (the ineffective policies and overregulation) is unacceptable and requires change.

The 19th century U.S. conservationist movement sought to guard the irreplaceable aspects of our national nature and history and initially started with a focus on private property as the impetus for stewardship. The environmentalists in the 1970s and beyond grew to favor the federal government (rather than individuals) as the custodian, manager and enforcement officer of the United States environment.

Leaning heavily on regulations, permits and compliance papers, the 1970s brand of environmental protection traded private stewardship for public management. Yet government-owned and managed public lands have been notoriously mismanaged through passivity and fiscal irresponsibility.

The key issue here is the incentive structure. What do the laws incentivize people to do? Are they incentivized to “be in compliance” or to actually take care of the land? Does collective ownership or private ownership incentivize the best care of goods?

Here’s a basic example: Most people who have a pool in their backyard don’t use it as a giant trash bin. Why? Generally, because they want to swim in it later. In the short run, throwing your trash in the pool may be more convenient than putting it in plastic bags and hauling it out to the dumpster, but everyone knows that at some point, you’re going to have to clean up the mess that you made. Ultimately you feel incentivized to care for that which is yours because it’s your property.

This same principle applies to the environment.

The inextricable relationship between a person and his or her property cannot be ignored. It is as natural to have a vested interest in your own “stuff” as it is for a toddler to yell, “Mine!” when grasping his favorite toy.

Jonathan Adler, law professor at Case Western University, describes effective market-driven management of the environment in “Conservative Principles for Environmental Reform.” He gives the example the U.S. fisheries who have adopted the “catch-share” concept that fuses species sustainability with privatization incentives.

It works like this: Scientists decide the number of fish that can be caught in a particular area without causing the species to die out. Fishing associations divide that number among themselves and can catch their fish quota in any season throughout the year. As the fish population increases, the share amounts increase. Thus, the ownership piece of the catch-share concept incentivizes fishing associations to take care of their area (stewardship), and not overfish (sustainability).

Other organizations, such as the Nature Conservancy list properties for purchasers interested in private conservation of land and work with these individuals to restore and preserve the land to its natural state. In Texas, for example, they have a property listed that is one of the largest protected pieces of the Texas Blackland Prairie, of which only 2% remains. Potential buyers can purchase the land and receive help or advice in planting indigenous wildflowers and other plants in order to maintain the land’s natural state.

Other private initiatives include ranchers who breed and sell endangered species, which act simultaneously as a conservationist effort and profitable business. WildLife Partners LLC currently holds permits to own, breed and sell 10 endangered species, which they sell to collectors and other ranches.

Government has and will maintain a key role in our environmental laws, many of which have been good and useful. However, many laws and regulations have been on the books for years and merit a re-examination to determine their actual effectiveness or redundancy — or constitutionality. We must ask the question, “Do the regulations exist to just be regulations, or do they help to achieve environmental stewardship?” We need to examine the incentive structures of the laws and regulations to see if they are incentivizing private management or public apathy.

In light of the recent controversial Trump administration Climate Report, it’s time to focus less on problems and more on real solutions to environmental issues. Market principles and privatization can and will deliver effective results if we allow them to be part of the environmental conversation.

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