The author and his daughter hiking along the Appalachian Trail in NJ.
[originally printed for Earth Day 2009]
As a Scoutmaster and backpacker I care deeply for our natural environment. As a libertarian I realize that achieving a healthy environment requires policies that are rational and based on science and economics. This Earth Day I wanted to write about some examples of effective and ineffective polices and practices.
The Industrial Revolution
In the 18th and 19th centuries, the world experienced a seismic shift in economies from a mostly agrarian economy to an economy based on manufacturing. Prior to the industrial revolution, farmers suffered long working hours for very little pay. Life in the cities was even worse. Our cities were overcrowded, sanitation barely existed, and garbage was piled outside. The cities were breeding grounds for cholera and yellow fever. Peoples diets were very limited. Smog and pollution from the limited heating choices of coal or wood filled the air above our cities.
The invention of the steam engine and the automobile improved sanitation, increased food production, and improved the diet of many with faster transport and refrigeration. In 1798 Thomas Malthus predicted that we would not be able to feed a growing population. He did not take into account human ingenuity. Modern farming allows us to extract more food out of the land with less labor and less input. Between 1948 and 2004, agricultural output grew 170% while input (fertilizers and chemicals) has dropped 2%.1
Better sanitation, a more varied food supply, more productive working hours, improvements in medical care, and a better environment have all contributed to changing the life expectancy of just 35 years in 1800, to 47 years in 1900, to 77 years today.
More importantly, the expansion of the economy has provided our society with the ability to be able to afford to take care of the environment. Globalization is now providing other countries with the wealth to be able to take care of their environment.
Effective and Enforceable Property Rights
If I have a stake in a piece of property, then I will take care of it. If the property is loaned to me then I have less of an incentive to take care of that property. When a company is given logging rights to a property their most effective course of action would be take as much out of the land as quickly as they can. When their logging lease is up, there is no guarantee that they will be allowed to log the property again. Therefore, they have no incentive to protect the property. Fishing companies in open water are more profitable if they overfish. Because if they don't take all the fish they can, then someone else will. This is known as the tragedy of the commons.
Proper stewardship of land and resources results in effective and enforceable property rights. Logging companies spend enormous amounts of money caring for and reseeding land they own. Clear cutting is avoided because it destroys the underlying soil. As property owners, these logging companies have a stake in the future value of the land they own. Around the world individual fishing quotas (IFQ's) are being found as the way to manage fish stocks.2
The Endangered Species Act
In 1973, the United States enacted the Endangered Species Act. The problem with this law is that it creates a perverse incentive for landowners to destroy habitat. Imagine being a landowner who occasionally sells timber from your land. You enjoy your land and want to take good care of it, so you only clear out some of the trees and leave large portions of you land unharvested. Then you find out that your neighbor has lost the use of a large portion of his land because the Red-Cockaded Woodpecker was found on his land. A 1/2 mile radius circle around each nest is now unusable to him. You imagine the same happening to you and the economic consequences that would have on your family. Your incentive is now to destroy habitat to keep the same from happening to you.
The endangered species act has had very little success. Of the 1400 species placed on the list, only 8 to 13 have been saved.3
Whenever property is communally or governmentally owned environmental degradation occurs. Lack of property rights destroys any incentive to care for the land. In the Soviet Union, irresponsible soviet planning has reduced the Aral Sea to one tenth the size it was in 1960. The Black Sea has been robbed of its gravel and trees. Socialist run factories discharge chemicals onto land and water and no property owner is around to hold them accountable. China has similar problems. Forbes reports that 10 of the 10 most polluted cities are in China. Forests are disappearing in China rapidly.4
Socialism lacks the market mechanisms that discourage excessive use of resources. If a resource is running low, the bureaucratic planners simply demand that more of it gets mined. In a free market system, the price goes up affecting demand. Socialist producers have no incentive to produce products efficiently. Waste is rampant.5
Here in the United States, the worst polluter by far is the federal government itself. The Department of Defense claims that it not subject to environmental laws. Perchlorate, a by product of rocket fuel, is leached out into the environment around hundreds of defense installations.
Libertarians believe that a clean safe environment is achievable. Polluters must be forced to clean up messes they make. Incentives matter. Policies that discourage environmental protection must be reformed. Socializing the costs of environmental remediation discourages individuals from behaving in ways that protect the environment. Innovations in manufacturing and resource use must be encouraged. A healthy environment requires a wealthy society.
1. Productivity Growth in U.S. Agriculture, by Keith Fuglie, James MacDonald, and Eldon Ball, EB-9, USDA, Economic Research Service, September 2007.
2. Creating Marine Assets: Property Rights in Ocean Fisheries, by Robert Deacon, Property and Environmental Research Center, Policy Series 43, March 2009.
3. The Endangered Species Act, Making Innocent Species the Enemy, by Richard L. Stroup, Property and Environment Research Center, Policy Series 3, April 1995.
4. Why Socialism Causes Pollution, by Thomas J. DiLorenzo. The Freeman, Ideas on Liberty. March 1992.
5. Is Socialism Good For the Environment, by Brian Gongol.
While researching this article I came upon several interesting articles and sites. Below are some other interesting articles.
- Environmental Justice (No. 42) Opportunities Through Markets, by H. Spencer Banzhaf. December 2008. This paper summarizes the state of the academic literature on the implications of environmental justice.
- Forest Gumption. John Tomlin has found a way to protect and log vast woodlands at the same time. December 2008.
- Do we pay to reverse climate change? By Andrew P. Morriss, January 2009.