Environmentalists have fallen prey to seeing capitalism as greedy, unthinking rapacious and a net loss. In fact, capitalism also allows innovative actions which favor the environment. It is less expensive to use less energy. People prefer to work in clean, green, buildings. There is more profit in doing the same with less material. In general, material that can be easily replaced is less expensive than one that is not renewable. An excellent treatise on this issue is Climate Capitalism: Capitalism in the Age of Climate Change, L. Hunter Lovins and Boyd Cohen, New York: Hill and Wang ©2011 1st ed., ISBN: 9780809034734.
Nevertheless, environmentalists have pursued the Public Trust Doctrine and environmental, largely negative, regulations to achieve desired new of clean air, clean water and open space. The environmental tragedies engendered by the Tragedy of the Commons has justified this regulation. The Tragedy of the commons refers to the situation where a resource is free to use all, such as a pasture or a fishery. Each individual must rush to get the most grass or the most fish because the benefit of such grass or fish is all his and the detriments are spread throughout all users of the common. In this manner, everyone acts at maximum resource jeans the resource is destroyed. This is tantamount to community ownership.
If the Public Trust Doctrine is the antithesis, then the thesis is defended and explained by Free Market Environmentalism, Terry L. Anderson and Donald R. Leal, PALGRAVE, ©2001.
...free market environmentalism emphasizes the positive incentives associated with prices, profits, and entrepreneurship, as opposed to political environmentalism, which emphasizes negative incentives associated with regulation and taxes.
Free Market Environmentalism, p. 4. Clearly this more classically libertarian viewpoint emphasizes market roles and would be conducive to individual contract, relationships and choice.
Interestingly, the theory is not willing to move toward a full free market solution.
The emphasis of free market environmentalism on private ownership and decentralized decision making should not be taken to mean that there is no role for government. ...government has an integral role to play in the definition and enforcement of property rights.
Id., p. 5. Presumably, this is because certain environmental attributes, such as air, are difficult, if not impossible to value.
However, the recognition of a public role is also because it is only through some type of organized system recognized by all (a “government”) that the market can be protected to work.
At the heart of free market environmentalism is a system of well-specified property rights to natural and environmental resources. ... Whether these rights are held by individuals, corporations, nonprofit environmental groups or communal groups, a discipline is imposed on resource users because the wealth of the property owner is at stake if bad decisions are made.
Id., p. 4.
The negative governmental view of Free Market Environmentalism stems from the relative apportionment of benefits and detriments. The environmental detriments of environmental degradation such as pollution spread over a large group, while the benefits are concentrated. In addition, there is no good way to measure some values, such as recreational values. Recreational values are seen more as political issues. Since political costs are spread over the electorate and there is no easy way to make politicians accountable, these political costs must be privatized so the market can capture the costs.
Free market environmentalism depends upon property rights that are defined, defendable and transferable. The authors argue against public ownership of wildlife and specifically cite the Recreational Fee Demonstration Project of 1996 as a good government program. Interestingly, they view land trusts as a form of private ownership. “Instead of promoting a public trust approach that opens access to water, land, and wildlife, policies can encourage contracting for access so that recreational and environmental resources become assets, not liabilities." Id., p. 74. If rights were defined, essentially privatized, then the bargaining would be between, for instance, a landowner and an oil company. Supposedly, each wants other happy. The suggestion is that environmental groups could bid on oil and gas. Alternatives for protection would then be some type of conservation easement for recreational values or a trust authority to protect multiple interests.
To sum up, free market environmentalism insists upon the removal of incentives like insurance and crop subsidies that hide effects of global warming. The removal of fishing subsidies which make it cheaper to fish, inflate fisherman's profits and keep marginal fishermen fishing. Government’s role is relegated to facilitating the evolution of private property rights and providing positive incentives. There is particular attention paid to public lands and user fees. In the alternative, there is proposed a trust approach comprised of so-called "wilderness endowment boards".
The theory of free market environmentalism is instructive. It specifically plays upon the self interest of individuals and makes use of existing structures such as corporations and land trust. However, there remain holes in the theory. For instance, the purchase by private groups of recreational rights on privatized public lands means buying the land twice for recreational groups, while the exploration and production companies would only have to pay once. In addition, the theory of free market environmentalism assumes equal bargaining power. Clearly, in Pennsylvania, this is not always true. Small landowners simply do not have the bargaining power of a large rancher in the west. In fact, gas companies want, and are trying to force, small owners into forced unitization and pooling. Finally, free market environmentalism emphasizes the possibility of land trusts and wildlife endowment boards, but does not sufficiently explain why the government could not be considered the trust authority.
In addition, the necessity of government intervention in the classical, bureaucratic and regulatory sense, should be questioned. The authors of Free Market Environmentalism themselves recognize the importance of common law nuisance as a way to use the market to defend private property rights. They even include a chapter discussing what is essentially mutualism and the formation of communal methods of enforcing norms. In this extensive discussion, six factors that allow communities to work in the free market formula are identified. First, boundaries must be clearly defined so those in group know what they can use how and outsiders know when trespassing. Second, group decisions require rules that determine allocation of value. Third, customary rules must be linked to time and place specific resource constraints so that resulting rules are efficient. Fourth, there must be effective monitoring of rules. Fifth, there must be dispute resolution mechanisms. Finally, the community rules must not be subject to change by higher levels of government. Id., p. 145-146.
As a synthesis of two ideas, government ownership and privatization, the tools of the common law and community norms should not be given little weight. In fact, they should be encouraged. The problem has been for too long that government bureaucracy has been concerned with development to the point where it has “protected” development interests at the expense of other interests. Thus, the true market cost is not felt and there is not free competition in the marketplace. The only explanation for many of this objection is the lack of direct political accountability. Any bad action today is subject to the forgetfulness of the public and the whims of an electorate in a subsequent election cycle.
Rather than privatize all public ownership to correct the vagaries of the political process, I would like to make a different proposal. Retain common law rights to force the costs of polluting or developing on the polluter or developer. Encourage community based decisions about resource use, including dispute mechanisms and monitoring of rules. In order to make these binding, correct two failures of the political system so that political leadership responsible for its decisions. These corrections rely upon direct action by the citizens and do not rely upon the actions by the state.
The first proposal is for referendum. Referendum so that the citizens can propose and vote on environmental issues. The conversation could thus be directly influenced by the citizens. The citizens will set their norms, their customs and a state which infringes upon them can be stopped by the referendum of the citizens. While referendum has been criticized in many instances as a tyranny of the 51%, on a community scale, it also is the only process with the ability to foster direct democracy.
The second proposal is for recall so the political system can be directly accountable for its decisions. Elected leaders must answer to the electorate and not special interests that do not vote. Far from being revolutionary, this is a very small move, as traditional special interest groups will still exist and wield power. After all, they are made up of individuals. However, with the power of recall in the hands of the public every individual will have a stake in a very real, personal, and meaningful, way.
By retaining these common law rights, involving the communities and correcting the political system, free market environmentalism could work without the wholesale sale of the citizens assets. At the very least it provides a blueprint for a workable process.
