"Government monopolies and subsidies are the largest cause of ecological destruction"—a surprising statement coming from an official of an environmental-advocacy group that, like many others of its kind, has time and again called for government intervention to resolve environmental problems. The speaker is Zach Willey, senior economist at the Berkeley, California, office of the Environmental Defense Fund (EDF), a highly regarded organization with about 60,000 members nationwide.
On the surface, Willey seems to be the archetypal environmentalist. His greyish-blond windblown hair is six and a half feet above the ground. He wears hiking boots, jeans, and a perpetual smile. He built his own cabin on a tree-hidden rock ledge in Big Sur, carrying all the materials uphill through a canyon replete with redwoods, sage, and poison oak.
But Willey, who earned his Ph.D. in economics at the University of California at Berkeley, is more than he appears. He is part of a remarkable team of environmentalists at EDF in Berkeley, also composed of Harvard-trained attorney Thomas Graff, Yale-trained attorney David Roe, and Dan Kirshner, a physicist and computer whiz who programs models that give almost instantaneous information about the environmental effects of changes in public policy. "But we have all become economists," Willey says, for it is the "inefficient use of natural resources" that "leads to further development projects." And because government policies that encourage such economic inefficiency cause most ecological destruction, Willey explains, "we use economic analysis to attack them."
A recent example is EDF's analysis of a situation in southern California. According to Willey and other experts, almost a half-million acre-feet of the 3 million acre-feet of Colorado River water that the Imperial Irrigation District (IID)—the authority that controls the water supply to the Imperial Valley, a major growing area—uses could be saved through simple, cheap conservation efforts. But IID pays only $6.50 per acre-foot of water that costs taxpayers at least 20 times that to deliver, so there is little incentive for either the growers or IID to conserve.
To inject such incentives into the situation, EDF came up with a scheme that would bring tears of joy to the most dedicated profit-monger. Willey and his colleagues proposed that the Metropolitan Water District (MWD), which serves the south coast of California, be allowed to make improvements on the IID system in return for the water thereby saved. At the end of a 10- to 20-year lease period, IID would own the improvements and the additional water supply.
For years, the state of California has been trying to build an expensive and environmentally destructive canal from northern to southern California to provide water for MWD's customers. But Willey says that EDF's scheme would cost MWD only a fraction of what the proposed Peripheral Canal would cost, while reducing pressure for the canal.
Willey calls it "a no-loser situation," but he says that bureaucrats now controlling the tax-subsidized water and interests who use it (mostly growers) seem hesitant to allow any incursions onto their "turf." "I admit this is a kind of backdoor approach," Willey says, "but as long as we have water paid for by taxes and controlled by government agencies, it will be necessary. Ideally, we would just deregulate water allocation altogether. One of the lessons of this thing is that if we just let the market operate, we wouldn't have to go through these mind-bending exercises just to cut a deal."
Willey's perspective comes from various sources. He credits his father, who often took him hiking and hunting in his native California, for instilling in him the appreciation of the outdoors that he still holds. In his Ph.D. thesis, Willey compared nonchemical agricultural pest control to the use of pesticides. Farmers who hired consulting entomologists to implement a variety of programs such as the use of predator insects and techniques of harvest, irrigation, and crop rotation, Willey found, spent less on pest control than those who used the tax-supported County Extension Agency services, which rely almost exclusively on chemicals. Thus, early in his career, Willey saw proof that uneconomic and unecological activities are often the same.
After getting his doctorate, Willey spent two years in Egypt building a mathematical model of the Nile River environment and how development projects (such as the Aswan Dam) would affect water quality. When he "got fed up with being an expatriate and diplomat between Egyptian economists and scientists," he took three months to walk through the Mt. Everest region of the Himalayas. The experience reaffirmed his commitment to the environment and people. "The irony of the stark poverty of the people next to the beauty of the mountains struck me," he says. "Ever since then, I have wanted to work at the interface of environmental majesty and people's needs." It is that willingness to face the reality of seemingly contradictory goals—conservation and development—that makes Willey stand out from the crowd of mainstream environmentalists.
Willey notes that the similarity between computer models of a diverse ecosystem and a true free market are remarkable. "But," he says, "free marketeers have to develop workable plans instead of just theorizing about the way it could be. That is where the challenge is today."
Patrick Cox is a frequent guest columnist for USA Today and public affairs director of the Pacific Institute for Public Policy Research.