Conservative Principles for Environmental Reform

Case Western Law Professor Jonathan Adler just released an interesting paper setting out a conservative case for environmental protection. Here’s his abstract:

The existing environmental regulatory architecture, largely erected in the 1970s, is outdated and ill-suited to address contemporary environmental concerns. Any debate on the future of environmental protection, if it is to be meaningful, must span the political spectrum. Yet there is little engagement in the substance of environmental policy from the political right. Conservatives have largely failed to consider how the nation’s environmental goals may be best achieved. Perhaps as a consequence, the general premises underlying existing environmental laws have gone unchallenged and few meaningful reforms have proposed, let alone adopted. This essay, prepared for the Duke Law School conference on “Conservative Visions of Our Environmental Future,” represents a small effort to fill this void. Specifically, this essay briefly outlines a conservative alternative to the conventional environmental paradigm. After surveying contemporary conservative approaches to environmental policies, it briefly sketches some problems with the conventional environmental paradigm, particularly its emphasis on prescriptive regulation and the centralization of regulatory authority in the hands of the federal government. The essay then concludes with a summary of several environmental principles that could provide the basis for a conservative alternative to conventional environmental policies.

One example of what he thinks ought to be a conservative approach to resource protection: property rights in fisheries (footnotes omitted):

The benefits of property rights at promoting both economic efficiency and environmental stewardship can be seen in the context of fisheries. For decades, fishery economists have argued that the creation of property rights in ocean fisheries, such as through the recognition of “catch-shares,” would eliminate the tragedy of the commons and avoid the pathologies of traditional fishery regulation. The imposition of limits on entry, gear, total catches, or fishing seasons has not proven particularly effective. Property-based management systems, on the other hand, have been shown to increase the efficiency and sustainability of the fisheries by aligning the interests of fishers with the underlying resource. A recent study in Science, for example, looked at over 11,000 fisheries over a fifty-year period and found clear evidence that the adoption of property-based management regimes prevents fishery collapse. Other research has confirmed both the economic and ecological benefits of property-based fishery management. The recognition of property rights in marine resources can also make it easier to adopt additional conservation measures. For instance, the adoption of catch-shares can reduce the incremental burden from the imposition of by-catch limits or the creation of marine reserves. A shift to catch-shares would have fiscal benefits as well. Yet in recent years, the greatest opposition to the adoption of such property-based management regimes has not come from progressive environmentalist groups, but from Republicans in Congress.

He also endorses a carbon tax, which combines responsibility (the polluter pays principle) with a move toward consumption taxation.

An Environmental Success: Property Rights to Fisheries

Creating property rights has helped protect fisheries while making the fishing industry more efficient, according to a nice blog post by Eric Pooley of the Environmental Defense Fund (ht: Dick Thaler). Writing at the Harvard Business Review, Pooley notes the success of the “catch share” approach to fisheries management:

The Gulf of Mexico red snapper fishery, for example, was on the brink of collapse in the early part of the last decade. Fishermen were limited to 52-day seasons that were getting shorter every year. The shortened seasons, an attempt to counter overfishing, hurt fishermen economically and created unsafe “derbies” that often forced them to race into storms like the boats in The Deadliest Catch.

This short window also meant that all of the red snapper were being caught and brought to market at the same time, creating a glut that crashed prices. Many fishermen couldn’t even cover the cost of their trip to sea after selling their fish.

A decade ago, the Environmental Defense Fund began working with a group of commercial red snapper fishermen on a new and better way of doing business. Together, we set out to propose a catch share management system for snapper.

Simply put, fishermen would be allocated shares based on their catch history (the average amount of fish in pounds they landed each year) of the scientifically determined amount of fish allowed for catch each year (the catch limit). Fishermen could then fish within their shares, or quota, all year long, giving them the flexibility they needed to run their businesses.

This meant no more fishing in dangerously bad weather and no more market gluts. For the consumer, it meant fresh red snapper all year long.

After five years of catch share management, the Gulf of Mexico red snapper fishery is growing because fishermen are staying within the scientific limits. Boats that once suffered from ever-shortening seasons have seen a 60% increase in the amount of fish they are allowed to catch. Having a percentage share of the fishery means fishermen have a built-in incentive to husband the resource, so it will continue to grow.

Please read the rest of his piece for additional examples in the United States and around the world. Catch shares don’t deserve all the credit for fishery rebounds (catch limits presumably played a significant role), but they appear to be a much better way to manage limited stocks.

One small quibble: Pooley refers to catch shares as an example of behavioral economics in action. That must be a sign of just how fashionable behavioral economics–the integration of psychology into economics–has become. In this case, though, the story is straight-up economics: incentives and property rights.

For another fun take on property rights and fish, with a very different slant, consider the fight against the invasive lionfish.

Can Markets Encourage Wildlife Conservation?

Bluefin tuna are swift, gigantic, tasty, and increasingly endangered.* Those last two items go together, of course, with tuna’s high market value encouraging over-exploitation of many populations.

But markets can also encourage creative efforts to preserve threatened species. Jason Kottke points to one example: bluefin farming in Japan. This 5-minute video raises a host of important questions, including the source of baby bluefin and the resource costs of their food. And, full warning, it doesn’t shy away from the bloody reality of bluefin harvesting:

On a closely related note, Felicity Barringer of the New York Times News Service writes about Utah’s market in hunting licenses for deer, elk, moose, and pronghorn.

The auction or sale of scarce licenses inevitably means that some will to well-heeled hunters, often from out-of-state, rather than typical residents. For some, that raises concerns about the marketplace intruding on what was once a natural resource held in public trust. On the other hand, by allocating some licenses to landowners who provide habitat, the program encourages conservation:

Here is how it works: The state has enticed ranchers with an allotment of vouchers for lucrative hunting licenses that they can sell for thousands of dollars as part of a private hunt on their land. Many used to complain bitterly to state officials about elk and other game eating forage meant for their cattle.

The vouchers for hunting licenses, handed out for more than 10 years now, give them ample economic incentive to nurture big game on their land and not get frustrated with ranching and sell their land to developers.

Both the video and the article are great fodder for a discussion of markets and wildlife conservation.

* Note for tuna enthusiasts: There are three species of bluefin (Atlantic, Pacific, and southern) that differ in size and degree of endangerment; see Wikipedia).

Incentives and Property Rights, Dead Raccoon Edition

It seems like only yesterday that I met Rocky. Probably because it was yesterday.

Our smallest cat Caramel was staring intently upward. Following his gaze, I spied Rocky tucked between two branches high in the silver maple near our deck.

Rocky didn’t look well. Raccoons aren’t usually out and about at 3:00 on a sunny afternoon. Lounging in the sun isn’t their thing.

Esther and I thought about calling the animal control authorities–rabies is not unheard of around here–but decided to wait until morning to see if Rocky looked better. No point harassing (or worse) the poor guy if he’s just an eccentric raccoon who wanted some sun.

A higher authority came calling overnight, though, and Esther found Rocky motionless under our deck.

Wild animals are one of my domestic responsibilities, so it fell to me to go poke Rocky with a stick to check his status. Result: deceased.

So what do you do with a dead raccoon?

This is precisely the sort of question at which the web excels. Sure enough, “dead raccoon” generates more than 30,000 hits on Google. But they boil down to only three flavors of advice: (1) Do it yourself, (2) Make it someone else’s problem, or (3) Turn it into a media sensation by claiming you’ve discovered a monster.

#3 wasn’t really an option – Rocky was clearly a raccoon — so I tried the nice version of #2, calling Montgomery County Animal Control to see if they handle deceased raccoons. No dice. If the deceased is on your property, it’s your responsibility – bag him and put in the trash was the advice. If he were on a county road, however, that would be a different matter. Then the county would pick him up.

Fair enough. Property rights ought to convey responsibilities as well as ownership. I’m good with that. But I couldn’t miss the implied incentive. If I were so inclined, I could simply pick Rocky up, suitably attired in latex gloves etc. (me, not him), and deposit him by the curb. I suspect such littering is a popular strategy. People do respond to incentives after all. See, e.g., Stacey Robinsmith’s dead raccoon trilogy.

Being a respecter of property rights and embracer of responsibility, however, I went with option #1. Here are some tips if you ever find yourself in a similar circumstance:

  • Fortune favors the swift. Rigor mortis is your friend. Just trust me on this.
  • Raccoons have claws; use extra bags. Several cheery folks recommended putting Rocky in a trash bag. Well, his claws sliced right through that when I placed him inside. I ended up going with a full-on Babushka doll solution – five nested bags. That might have been a teensy bit excessive. But I suspect the garbage collectors will appreciate it.
  • Burial would, of course, be a more natural solution. But given the number of dogs, cats, and other critters that roam the neighborhood and dig better than I do, that seemed like a bad idea with Rocky’s suspicious cause of death.
RIP Rocky.

The Grinch Recast as Economic Parable

Over at Forbes.com, Art Carden has a brilliant retelling of Dr. Seuss’s “How the Grinch Stole Christmas” (ht: Greg Mankiw). Carden recasts the story as a parable about externalities and property rights.

He starts with the Grinch’s view that Who singing is a nuisance:

He hated the shrieks of the Who girls and boys
For fifty-three years he’d put up with it now—
He had to stop Christmas from coming, somehow.
He asked and he questioned the whole thing’s legality
Then his eyes brightened: he screamed “externality!
He reached for his textbooks; he knew what to do
He’d fight them with ideas from A.C. Pigou.

As regular readers know, Pigou argued that externalities — pollution, singing Whos, etc. — could be addressed by levying taxes that reflect the harm imposed. So maybe, the Grinch might reason, he should help himself to some Who presents and roastbeast whenever they sing.

But wait, as Ronald Coase noted years ago, it takes two to tango … and to create an externality. So the Whos have a rebuttal:

“We know that we’re noisy all through Christmas Day,
But if you don’t like it, it’s you who should pay!
“For we were here first, and homesteaded the rights
To sing, to make noise, and to hang Christmas lights
“The costs of our Christmas joy helped you to save!
They were fully reflected in the price of your cave!”

I am so using this in my class in the spring.