Why Do We Need More Ownership to Protect the Environment?

How "as if" ownership engineering ensures safe drinking water and battles climate change.

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This post is adapted from our new book, Mine!: How the Hidden Rules of Ownership Control Our Lives, available March 2. To learn more about the book, visit minethebook.com.

Yesterday, we introduced Al Appleton and showed how he persuaded New York City to invest in green rather than gray infrastructure, trees instead of concrete. The result: impressively clean drinking water.  Today, we explain what all this has to do with ownership.

We tend not to think about ownership when talking about the environment.  The benefits we receive from nature—the clean air we breathe, a stable climate, fish schooling in the ocean, scenic vistas across landscapes—seem like they must be goods common to all.  That's a lovely notion, but it's also a problem.

Common ownership works well when resources are abundant, but often fails as populations grow and technology changes.  When valuable resources are free for the taking, we tend to take too much.  The result of common ownership is that we're overfishing the world's oceans, cutting down tropical forests, and over-using the atmosphere by emitting greenhouse gases at historically high levels, driving climate change.  At this rate, the world of our children and grandchildren will be very different from the one we grew up in, and not for the better.

Just as the Catskills watershed provides clean drinking water, nature provides all kinds of critical services that we take for granted.  Insects pollinate our crops.  Microbes in soils break down waste and create fertile fields for farming.  Coastal marshes protect against storm surges and provide habitat for young fish.  These are all examples of common resources that benefit everyone and are owned by none.  We all enjoy the wild birds and butterflies flying around us.  But the people whose lands provide the habitat for this wildlife receive no compensation in exchange.  If they don't own the resources and can't charge for them, then they have little reason to protect or invest in them.

Wetlands, for example, may protect towns by slowing storm surges or filtering drinking water.  If landowners convert wetlands into homes or farms, they may benefit financially but the community is made far worse off by flooding and dirty water.  Because no one owns wetlands' services like flood prevention and water purification, landowners don't take the value of those services into account when deciding how to use their land.  If the choice is to earn a living by farming the wetland or earn nothing by preserving it, then the choice is simple.  Fill the wetland.

Appleton's great insight was to innovate around ownership design.  He told Catskills landowners that New York City would deal with them as if they owned the environmental services attached to their land.  We don't think twice paying for potatoes or coal attached to land, so why not pay farmers for improved water quality?  Appleton crafted an ownership tool where wealthier downstate city dwellers could pay poorer upstate farmers to preserve a clean environment.  He showed how to motivate farmers, even in the absence of state law giving them ownership over the environmental benefits their lands provide.

This approach—of creating what we call as-if ownership in nature's bounty—has exploded in recent decades.  James Salzman has been working with governments around the globe since 2000 to develop payment schemes that compensate landowners for providing natural services.  In recent work, he identified over 550 active "ecosystem services" programs around the globe with an estimated $42 billion in annual transactions.

The strategy is being used to try to save the world's rainforests.  Tropical forests contain most of the world's species diversity and capture vast amounts of carbon from the atmosphere, playing a critical role in slowing climate change.  Deforestation is responsible for up to 20 percent of global warming.  Today, swaths of the Amazon forests, often called "the lungs of the planet," are burning.

The basic problem is that people who live in these forests don't own the environmental benefits they provide.  They can't charge for wildlife habitat or storing carbon.  Even though these resources are critical to humanity, we receive them for free.  Not surprisingly, owners and squatters in forests focus instead on things they can sell.  They burn forests to clear them for grazing, logging and agriculture.  The challenge is to make trees worth more standing than cut down.

Norway is doing just that, trying to offset some of the climate harm it has caused by extracting North Sea oil.  Thanks to its "sovereign wealth fund"—profits the country accumulated from oil sales—Norway has been able to spend tens of billions of dollars paying people in the Amazon, Indonesia, and Mexico for their efforts to reduce local deforestation rates.  If the rate of forest loss slows, more trees are left standing and more carbon is captured from the atmosphere.

China has made an even larger investment.  Ecosystem service payments have become a central component of the country's nationwide environmental protection strategy.  China has already paid over $50 billion to farmers and households to increase forest cover.  By planting trees instead of chopping them down, China gets flood protection, wildlife habitat and water quality—all shared goods that come along with investing in trees.

So, can we use ownership to steer people to conserve nature rather than despoil it?  Absolutely.  Around the world, new types of ownership to promote environmental goods are changing the behavior of farmers and forest dwellers, timber companies and big land owners—they now compete to protect the environment and make money in the process.

With a billion-dollar program here, a billion there, ecosystem services ownership begins to add up.  While substantial already, these programs are not yet nearly big enough.  The key to addressing some of the world's greatest environmental challenges may be to encourage people to call ever more aspects of nature mine.

Tomorrow we wrap up our week as guest bloggers on the Volokh Conspiracy by bringing all these stories together.

NEXT: Thursday Open Thread

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  1. Really enjoying these posts, professors. Best of luck to you on the release of your book.

  2. Or you could just decline to be a member and believer of the environmentalist religion. Then the “need” becomes a practical question instead of a religious calling and you can begin to think and decide rationally.

  3. To say that China cares about the environment is asinine…

    1. Yes it is, because countries don’t and can’t care. They have no feelings or emotions and can’t care about anything.

  4. “… nature provides all kinds of critical services that we take for granted. Insects pollinate our crops.”

    This juxtaposition is grossly inaccurate. Most crop pollination in the US is done with honey bees, a non-native managed species. There’s a reasonably large market of beekeepers who get paid to bring their bees to an area and let them pollinate the surrounding fields (plus the honey can be harvested as well). They manage and transport hives, and can service multiple farms who have different timeframes for pollination services. To pretend pollination is a purely natural affair which doesn’t involve substantial human management and ownership is just patently false. And it’s not something farmers are taking for granted.

    (Also, remember that honey bee apocalypse that was supposed to happen? It never did, because beekeepers managed their hives well, and the honey bee population is larger now than it was before the supposed beepocalypse).

    Yes, honey bees are a great example of how ownership benefits non-human species. But let’s not pretend we are ignorant of the benefits they provide, or haven’t already privatized them and created a market for those services.

    1. “Most crop pollination in the US is done with honey bees”

      That surprised me. I went searching and found that to be a common headline, but I wonder how they are doing the math. Of the big three crops, corn and wheat are wind pollinated, and soybeans mostly self-pollinate. The first several articles I found don’t specify what they mean by ‘80%’ … 80% of crop species by count? 80% by dollar value? I tend to think of crop importance by calories produced, but that doesn’t seem likely to result in a figure of 80%.

      1. Yeah, I take it more along the lines of “80% of crops that require artificial pollination are pollinated by honeybees,” which doesn’t say much.

        There’s a fairly informative article here that buckets a bunch of common food crops by level of required artificial pollination and lists the most common pollinators. It claimed (as of 2010) honeybees “contributed to the pollination” of about $19 billion in agricultural crops — global agriculture is a multi-trillion dollar market.

        1. As a beekeeper and someone who’s studied this quite a bit, Life is correct. Honey bees are used to pollinate the vast majority of food crops which are not wind pollinated. While not strictly necessary for plants that self-pollinate, they are often used to supplement, resulting in a stronger seed set than self-pollination alone.

          As a general rule of thumb, you can tell what pollinates a plant by looking at the color of its flower. If the flower is small and green, such as grasses and cereals, it’s wind pollinated. If the flower is big and red*, it’s probably pollinated by birds or bats (honey bees can’t see that end of the spectrum). If it’s anything else (especially colors in the near ultraviolet), it’s insect pollinated.

          Even the claims that “one of every three bites of food are dependent on bees” are wildly overblown – most of our calories worldwide are from cereals. But without bees, our diet would be far less varied and tasty.

          * For this analysis, you have to look at the original cultivar. Humans have bred tulips into every color in the rainbow. That did not change how they are pollinated.

          1. Interesting stuff, Rossami.

            Thanks.

      2. Apologies, i did mean most crop pollination that is done by pollinators. Wind pollination of course requires no pollinator at all.

        My point was more than the value of pollinators is not something relevant people are ignorant of, and is already privatized and marketed, and has been for decades.

  5. If the choice is to earn a living by farming the wetland or earn nothing by preserving it, then the choice is simple. Fill the wetland . . . . We don’t think twice paying for potatoes or coal attached to land, so why not pay farmers for improved water quality?

    Absolutely. Define a class of inherent owners; give them everything. Pious stewards as they undoubtedly will prove themselves, they will make everyone else richer . . . by trickle-down, starting no doubt with access to water itself.

    In exchange, count on grateful non-owners to pledge loyalty and support, for being allowed to live better than they ever could live under some yet-more-rapacious system—such as an unacknowledged and largely unresisted warlordism—like the one assailing the world’s rainforest remnants, and wrecking marine ecosystems by unchecked plunder.

    You have to hand it to Heller and Salzman. They are right to deplore that.

    Alas, their proposal is not the innovation they suppose. They offer rehabilitation of a very old system, formerly practiced on a broad scale. It was a stable system which protected millions (mostly, except when it didn’t), and which did wonders to stabilize stewardship of natural resources under private ownership. While it flourished, it had many fans and few detractors. It lasted for centuries. It was called feudalism. Heller and Salzman offer a proposal which threatens to rehabilitate Marx.

    Revisit that opening quote, this part of it:

    If the choice is to earn a living by farming the wetland or earn nothing by preserving it, then the choice is simple. Fill the wetland.

    No. To deal with an existential threat, Heller and Salzman offer a drastic political solution, but the wrong solution. Instead, use politics to assure that is never the choice.

    It is past time to put an end to our era of false choice. It has taught the world what it costs when world resource capitalism gets defined in just four words: “Rape, ruin, and run.”

    To accomplish change will require political innovation for real. The existential scale of the stakes encourages belief that it can happen. The real choice is between starting now, and preserving liberty, or shirking the contest and losing it. For now, at least, it is too soon to take Heller and Salzman up on their offer of surrender.

  6. Someone has to say this: No, CO2 is not causing the planet to warm up, catastrophically or otherwise; no, humans are not causing a catastrophic warming of the planet. The greenhouse gas theory is a lot of bunk.

    There is not one, single published repeatable experiment that proves the CO2 GHG theory. And, it’s been irrefutably falsified many times.

    So-called climate science is not science at all, it’s a religion, and it’s being leveraged by unscrupulous politicians charlatans to enrich themselves and control the population.

    Try this thought experiment: someone conclusively proves that CO2 is not causing the phenomena that climate scientists have claimed these past 50 or so years. How would climate scientists, politicians, celebrities, and the AGW believers react? Would they say “great! That’s wonderful news?” Or would they attack, refute, cancel the reporter?

    1. Another who brandishes “irrefutably” in a manner showing no comprehension of what the word means. Join the “inarguably” club.

      1. Another who brandishes “irrefutably” in a manner showing no comprehension of what the word means.

        Perhaps one particular meaning? Miriam-Webster actually lists both “incontrovertible” and “unarguable” as synonyms for “irrefutable.” Collins provides four groups of synonyms based on different senses of “irrefutable”: “undeniable,” “beyond question,” “certain,” and “undeniable.”

      2. Why don’t you elaborate on that, professor?

  7. Because no one owns wetlands’ services like flood prevention and water purification, landowners don’t take the value of those services into account when deciding how to use their land.

    OK, but what is the “value”? This sounds like a scheme where government assigns a “value” to these things, and then forces everyone to pay whatever “value” they have invented.

    1. It seems that the value should be the value of the best alternative use of the property.

      If you can make $50,000/year doing one thing with your land, and I want you not to do it, then paying you (at least) $50,000/yr. should work. Of course, if the flood prevention/clean water/etc. is worth more than that to me I might pay up.

      Except that there are collective action problems. I may need a lot of landowners to go along with the scheme, which gets to holdout problems, possible eminent domain issues, and so on.

  8. Tragedy of the commons. The fundamental problem of property rights in an increasingly interdependent society.

    A problem that politicians can be counted on to never, ever, ever solve properly.

    1. I agree that these are well-known issues, understood by anyone who’s had a decent economics class.

      What solution do you propose? What mechanism would best addres the problems?

  9. The arguments for supporting environmentalism through capitalism are strong. The rhetorical device of connecting everything to carbon dioxide significantly weakens the arguments, however. You unnecessarily alienate a significant fraction of your target audience.

    1. Rossami, it may be that your reasoning would work equally well on a more pressing problem. Can you spare a bit of it to discuss negotiating a political compromise with the Covid virus?

      1. There is no political compromise possible or desirable.

        Politicians largely insulated from the consequences of their own choices simply need to stop playing tinpot dictator and pretending (and encouraging others to believe) that all of a sudden, for the first time in known history, a readily-spread respiratory virus can be “contained,” “crushed,” or “zeroed” while retaining a functional society. Not complicated at all.

        1. LoB, you know, you can’t reason from ideology to prove facts. It doesn’t work that way. If you try to do it, you just make yourself look foolish.

          Nations elsewhere have done what you say can’t be done—Australia, New Zealand, South Korea, for instances. Among developed nations, at least, our nation’s leaders chose the worst policies in the world, and got the worst results. The comparisons are available.

  10. The City of San Antonio, Texas, and many smaller, surrounding communities get all or almost all their water from the Edwards Aquifer. Accordingly, preservation of the quantity and quality of Edwards recharge is critical. San Antonio initiated a program to buy conservation easements over land in the recharge and contributing zones. The easements limited permissible activities on the servient estates so as to protect recharge quantity and quality. I thought it an excellent solution to the quandary between private rights and the public interest. Regrettably, the fund from which easement purchases were made was too tempting a cookie jar, and it’s been raided.

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