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 1970’s 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 1970’s brand of environmental protection has 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 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 his “Conservative Principles for Environmental Reform.” He gives the example the U.S. fisheries who have adopted the “catch-share” concept which fuse species sustainability with privatization incentives.
It works like this. Scientists decide the number of fish which 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 which 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 ten 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 reexamination to determine their actual effectiveness, redundancy and in some cases, 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.
It is 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.
Originally published on Patriot Post, November 9, 2017
Image credit: Subbotina Anna/Bigstock
For years, many American leaders have talked about energy independence. The Trump administration actually takes this commitment seriously. Last week, U.S. Secretary of the Interior, Ryan Zinke announced the proposal by the department for the largest oil and gas lease sale in U.S. history. Known as the Proposed Lease Sale 250, the Department of the Interior will be offering leases totaling 76.9 million acres. The lease locations span the federal waters of the Gulf of Mexico, the unleased areas of the Gulf of Mexico’s Outer Continental Shelf (OCS), as well as offshore locations in Texas, Louisiana, Mississippi, Alabama and Florida. The sale will be held and livestreamed from New Orleans in March of 2018.
Proposed Lease Sale 250 will not only create jobs for Gulf Coast states, but it also enhances our national security position. According to the U.S. Energy Information Administration, in 2016, the U.S. net imports on petroleum accounted for about 25% of all petroleum consumption (about 10.1 million barrels per day (MMb/d)). Roughly 70 countries supply our imports with Canada, Saudi Arabia, Venezuela, Mexico and Columbia being the top five. Petroleum and petroleum products include crude oil, gasoline, diesel fuel, jet fuel, asphalt, biofuels (ethanol and biodiesel) and others. Our importing not only means that the U.S. economy supports off-shore jobs rather than American jobs, but it presents a huge strategic error in our foreign policy. The U.S. dependence on foreign oil places us in a strategically vulnerable position where we must rely on another country (often those who do not share our interests) to fuel our cars, boats, planes and military equipment. Energy independence means that we gain self-sufficiency, and do not have to play political games with oil-supplying countries who use their energy supply as a way to manipulate our geopolitical position and our loyalties.
The Bureau of Ocean Energy Management estimates that the development of the lease sites could be between .21 and 1.12 billion barrels of oil and breaks through barriers which have prevented job growth and expansion in the energy industry. A recent report by the Department of the Interior outlines the many burdens and barriers to energy growth in the U.S. including slow permitting processes and redundant regulations. Vincent De Vito, Counselor to the Secretary for Energy Policy stated, “The federal government can and must be a better business partner…the recent actions outlined in this energy report show how interior is rolling back some of these burdensome regulations that add little or no value, while promoting responsible energy development.”
The sale excludes whole and partial blocks of the Flower Garden Banks National Marine Sanctuary, and other blocks due to congressional moratoriums and other statutes. According to the statement from the Department of the Interior, “In addition to the high bids and rental payments, the Department will receive royalty payments on any future production from these leases. Outer Continental Shelf (OCS) lease revenues are directed to the U.S. Treasury, Gulf Coast states, the Land and Water Conservation Fund and Historic Preservation Fund.” This means a great increase in funding for the federal government, Gulf Coast state governments and funds committed to preservation and conservation.
Proposed Lease Sale 250 also creates a stability and certainty regarding the future of the energy sector. Congressman Rob Bishop, Chairman of the House Committee on Natural Resources observes that, “If we are serious about energy dominance and long-term energy affordability, we must create certainty about future access in the Outer Continental Shelf.” Under Obama, 94% of the Outer Continental Shelf (OCS) was prohibited from leasing. In May, Secretary Zinke issued Secretarial Order 3350 which began a 5-Year Program to help develop the OCS. Uncertainty regarding lease availability, permitting, and regulations has adversely affected the American energy industry. Companies do not want to risk their business if the government decides to fine them for “new rules” or close their drilling area. With an administration that has their back, American energy can face the future with certainty and optimism. Optimism, in fact, has been a huge factor in the revitalization of the economy since Trump’s inauguration and according to Investor’s Business Daily, stronger optimism and factory output has greatly increased.
Business is based on the principle of optimistic risk in which business owners risk their money and resources hoping for a reward. Take, for example, the lemonade stand. You invest money to buy the lemons and sugar. You invest money in marketing (signs made from posters and markers). You invest time to sit outside and advertise your product, hoping that the combination of a good location (corner lot), supply (you were the first one out there) and the hot weather (demand) will mean that you will have customers. You price each cup so that you can make a profit. In total, you risk the investment in the lemonade stand for the reward of people purchasing your lemonade. This is basic business.
Now imagine that you invested all this money into your lemonade stand with the projected profit of a certain amount. Then the government comes in unannounced and says, “You need a permit. That will cost $50. You can only sell lemonade on this block, in the middle and not the corner lot. You can only sell 3 cups per hour. You can’t use real sugar, you need to use alternative sugar that has a bad aftertaste.” Then they create additional rules without warning and fine you for non-compliance. Now the government has reshuffled your deck, you must deal with multiple variables and things just became uncertain. This is called business uncertainty.
Under the previous administration, the energy and other industries endured multiple aspects of uncertainty including unpredictable rules and regulations, which stifled productivity, optimism and business confidence. Now, with Proposed Lease Sale 250, and an administration committed to removing burdens and regulations, the business landscape for American energy has begun to change.
As Senator Bill Cassidy notes, “President Trump and his administration are following through on their promise to end the war on American energy,” which ultimately means a big win for American industry, the American worker and the American geopolitical position.
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Originally published on Patriot Post, November 2, 2017