Kitsap Peninsula Business Journal
2-7-2002
Letting market principals resolve
environmental issues
   Home builders interested in more sensible policies for preserving the nation’s natural resources than those currently being pursued by federal regulatory agencies will want to find out more about the Political Economy Research Center (PERC), the nation’s oldest and largest institute dedicated to bringing market principles to bear in resolving environmental problems.

At a recent conference by the center in Montana, several of the country’s most respected experts in wildlife, land management and economics provided examples of how market-based incentives, locally tailored strategies and respect for private property rights can spur conscientious stewardship of natural resources far better than government mandates.

The success of “free-market environmentalism” was demonstrated by efforts of Defenders of Wildlife (DOW) to ease re-introduction of wolves to western lands. Citing economic hardship from wolves attacking livestock, many ranchers originally opposed the plan. But when DOW raised private funds and compensated owners for their losses, attitudes changed. The group soon confirmed that the carrot approach is much better than the stick. “It’s economics that make people hate wolves,” said DOW’s Hank Fischer. “If you pay them for their losses, conservation efforts can work.”

Both ranchers and home builders have long argued for just compensation when public mandates result in takings of private property. Unfortunately, for every incentive-driven approach to environmental concerns now underway, there are hundreds of ore examples of harsh government mandates riding roughshod over private property rights and causing the exact opposite of their intended results. Many of these relate to the Endangered Species Act (ESA).

Josiah Austin, a large-scale rancher with properties in the U.S. and Mexico who has a reputation for responsible land management, told PERC conference-goers a typical horror story. Starting from a genuine desire to preserve two endangered fish species on his property, he undertook substantial stream rehabilitation efforts on his own initiative. Later, he signed the first Habitat Conservation Plan (HCP) in Arizona — a move he would live to regret. It cost him two years, 23 plan revisions and about $100,000.

Within six months, the Southwest Center for Bio-Diversity sued the Forest Service for failing to conduct an environmental impact study on Austin’s land. “They claimed one of my cows might step on a fish. But the fish wouldn’t be there if we hadn’t taken steps to save them,” he noted. As an “intervener” in the court battle, Austin accrued still more legal fees.

“We did the HCP to prove to private landowners that an endangered species is not necessarily a liability, and can actually be an asset. This suit proved that I was wrong,” Austin said.

Time and again, said conference speakers, the ESA is used as a tool to stop growth and other land use with little regard for actions that actually save species. The result is an incentive for property owners to avoid creating habitat conditions that might attract an endangered species.

Before the ESA and its mandates, success stories were more plentiful. Richard Stroup, a PERC researcher, cited the wood duck, which neared extinction some years ago. “Lovers of these ducks built nesting boxes on their properties, and it helped save the species,” Stroup said. In the post-ESA era, it’s hard to imagine this scenario.

Until something happens to provide incentives for species conservation, well-intentioned property owners like Austin will hold their breath. “I still want to show my neighbors that an endangered species doesn’t have to be a liability,” says the rancher. “Someday, maybe that will be true.”

For more information on PERC and it’s programs, visit http://www.perc.org.