Private Conservation

A ongoing battle in court and public opinion rages in California over the environmental status of the Sacramento-San Joaquin River Delta (both rivers meet, and flow into San Francisco Bay; a rather rare type of system seen in only a handful of places around the world, like the Ganges–Brahmaputra).

The status of a small fish called the Delta Smelt, as well as salmon, have led to less water allowance for Central Valley agriculture via California’s great waterworks infrastructure, an ongoing shock to the most productive agricultural region in the world.

There’s little free market in water anywhere, but we can reconcile that over time via a tad more “separation of water and state.” I testified in the Water and Power Subcommittee of the U.S. House of Representatives Water and Power Subcommittee this week on these concerns. The specific vehicle was H.R. 3176, the Reclamation States Emergency Drought Relief Act.

My written testimony is linked here (prepared in just a couple days so please excuse typos!); and oral remarks appear below.

I am Wayne Crews, VP for Policy at the Competitive Enterprise Institute, and I thank the committee for the invitation to address federal drought relief funding and planning.
I come at this issue from the perspective of one who spends most time on tech and frontier industry policy issues, including compiling an annual federal regulation report called Ten Thousand Commandments.

Given environmental barriers to urgently needed water in the West, I completely understand the desire for the funding in H.R. 3176; and granted, the dollars sought are trivial in context of current budget battles.

But I caution against fostering any further “Declaration of Dependence” on federal dollars in any sector.

The regulatory reforms and infrastructure liberalization actually needed for plentiful, adaptable, environmentally conscious western water should dominate attention.

The good news is, water is not getting more scarce overall; it’s an earthly constant.

The bad news is, we artificially interrupt access to water. So management and allocation of that constant supply does matter.

[click to continue…]

Post image for Some Genuine Vindictiveness in Park Closings

The Washington Times story on the attempted forced shut down of the Pisgah Inn on the Blue Ridge Parkway in North Carolina may provide some insight into the attitudes of the National Park Service in shutting down private concessionaires on federal lands that still have open access for the public.

NPS chief spokesman said: “NPS [is]a single entity….We do not believe it is appropriate or feasible to have some parts of the system open while other parts are closed to the public.”

If other words, if we suffer, you suffer. Appears to be some genuine vindictiveness there.

Perhaps NPS is worried that if the public sees how well the private concessionaires are running campgrounds, picnic areas, hotels, stores, bookshops and properties such as the Claude Moore Colonial Farm in McLean, Va., which was closed even though it takes no federal money and has no federal employees — they might begin to wonder why we don’t simply privatize all the National Parks and National Forests. Where is the constitutional authority for the Feds to raise trees and own campgrounds anyway?  And there is certainly nothing inherently unique or difficult about these things that make it so the private sector cannot do them. Indeed, the private sector does them much better. Ask your local timber company when was the last time it let forests die from insects, beetles or disease or burn down in catastrophic wildfires.

And perhaps instead of Republicans introducing bills to provide lost pay to furloughed non-essential Federal employees, they should provide for reimbursement for forcibly closed private concessionaires. With the money to come form budgets of NPS and USFS.

Last week I testified in the Water and Power Subcommittee in the House of Representatives (hearing linked here). The concern was water availability and federal funding for for research and development in desalinating (de-salting) seawater and brackish water for human consumption or use in irrigation or industry.

I argued against the funding and pointed out that water shortages are almost always rooted in poor pricing for water. Without market pricing, scarcities and havoc will rule. I call for the separation of water and state. My long-form written testimony is linked here, and my oral comment appears below.

I am Wayne Crews, VP for Policy at the Competitive Enterprise Institute and I thank the committee for the invitation to speak on federal desalination efforts that, while they won’t break the fiscal bank, distract from the infrastructure and regulatory liberalization actually needed, and embrace principles at odds with an adaptable and lightly regulated water sector.

Desalination does boast impressive working applications, but it is an energy-intensive, by-product-laden way to make expensive potable water.

Happily, water is not getting more scarce overall; it’s an earthly constant.

But pricing and allocation of that constant water supply do matter. We should avoid having Government Steer While the Market Merely Rows.

When linking any research to human needs, private investors can test low-probability projects, counting on the rare success to offset multiple failures. We have to be good at killing bad projects. That requires market processes.

Federal funding, further, fosters needless conflict: over the merits of basic vs. applied research, over government vs. industry science; over assignment of intellectual property, and here, even over coping with environmental harm associated with the sourcing and externalities of desalination itself.

Politics has trouble with tradeoffs: Why brackish groundwater desalination instead of seawater, or smaller scale solar still-type projects, or why not countless alternative water investments and strategies? The dilemma affects all policy areas; Why not nanotech? Or biotech? Or methane hydrates? Or Robotics?

Fortunately, taxpayer subsidies appear not to alter the ratio of GDP spent on R&D.

So we should avoid fostering any “Declaration of Dependence” on federal dollars in any sector.

Also, all innovations bring risks. Government funding can magnify risks and environmental problems by propelling technologies ahead of the free market’s ability to properly assimilate them. In genuine markets, disciplines like liability, insurance, waste stream recapture and environmental stewardship must evolve alongside frontier technologies.

Rather than the National Research Council’s recommendations and the National Labs “roadmap,” I advocate the separation of water and state.

Water resources and environmental amenities should be better integrated into the property-rights, wealth-creating sector, an evolution derailed in the progressive era.

First, better pricing of existing supplies can make shortages vanish. Despite everything, gallons cost less than a penny, but they fill swimming pools and quench lush lawns in arid areas.

Second, improving water infrastructure can reduce the waste that now depletes some 17 percent of the annual supply, as noted in a Competitive Enterprise Institute report by Bonner Cohen.

Third, better transport, including pipelines and canals, trucking, and crude oil carriers can secure supply more cheaply than desaliniation.

Fourth, improved trades between cities, farmers and private conservation campaigns can be essential to pricing and value.

All these can supplement direct sourcing alternatives including gray and wastewater treatment and reclamation, stormwater harvesting and surface storage.

And obviously, we should address onerous permitting regulations that inflate desalination’s costs and defy the good in the process.

A couple quick general observations:

First, as CEI’s founder Fred Smith puts it, instead of trying to improve speeds by picking the particular R&D horses to run on the economic racetrack, we should improve the business and regulatory track so everyone can go faster, and let jockeys keep more of their earnings.

That means tax and regulatory reform. In my written testimony, I cover options to liberalize and enable a private sector flush with research cash.

Second, this is the water and power subcommittee, and I think it’s vital to step back and explore dismantling regulatory silos that artificially separate our great network industries like water, rail, electricity, transportation and telecommunications. Investment in desalination while leaving antique 19th and 20th century infrastructure regulation intact is curious policy.

As a free society becomes wealthier, cross-industry creation of infrastructure should become easier, not harder. The vastly poorer America of 100 years ago built overlapping, redundant tangled infrastructure; we might have had eyesores, but never a natural monopoly problem.

Again our primary challenge is to integrate modern water resources further into the market process and the sophisticated property rights and capital market systems of the modern world. We need competitive markets to discover, not merely desalination’s value relative to sourcing alternatives, but to discover the true value of water itself.

Post image for Virginia’s Uranium Mining Moratorium Should Be Buried, But What About Property Rights?

The earth below the United States contains 5 percent of the world’s known recoverable uranium deposits. More than a quarter of U.S. uranium is found in southern Virginia at Coles Hill near Chatham in Pittsylvania County. The two uranium deposits at Coles Hill are valued at $7 billion and together constitute the seventh largest deposit in the world.

Yet all of it is still in the ground. Over 30 years ago, Virginia placed a moratorium on uranium mining in the state. This prohibition was to be lifted once the state went through the arduous process of drafting uranium mining regulations. Unfortunately, Virginia never got around to writing the rules and the “temporary” ban is still in place. The property owners at Coles Hill and some outside investors formed a company in order to mine uranium once the moratorium is lifted and the onerous regulations recommended by the Uranium Working Group [PDF] are promulgated, but still face stiff opposition from the sadly typical alliance of anti-development environmentalists and ignorant NIMBYs.

This underscores the problem with relying on unreliable and arbitrary regulatory regimes for the ostensible purpose of protecting residents and the environment. Few dispute that responsible, safe uranium mining is possible and indeed practiced throughout the world, especially in major uranium-producing countries such as Australia and Canada. Instead of increasing regulation on mining, however, a more thoughtful approach would focus on strengthening property rights so that those doing the mining face incentives to extract natural resources without harming adjacent property owners.

Robust private property rights — those which are well defined, well defended, and voluntarily transferable — are the most critical underpinning of any free society. It should not be surprising that they are also the best tools to protect others and the environment from potential hazards. (For a brief discussion and defense of free-market environmentalism, see “Liberty, Markets, and Environmental Values” by Mark Pennington.) Pollution in this context constitutes a trespass against those rights and the injured owner can file suit to halt harmful activity and collect damages. But relying on the regulatory state in an attempt to protect the environment essentially grants polluters additional rights while preventing property owners from exercising their rights to defend their own property from pollution. This false commons is forced upon society by government and the predictable tragedies result again and again. Unfortunately, these state-caused disasters often only embolden far-left environmentalists in their calls for doubling down on failed regulations.

A firm engaged in uranium mining under state and federal regulations has the incentive to follow the regulations to the letter, regardless of how arbitrary or counterproductive they may be. In contrast, robust property rights would incent miners to allocate resources efficiently (after all, pollution is just a form of waste), take immediate risks into account, and prevent expensive trespasses against neighbors.

While this vision of a free society is far different from our current reality — meaning a complex regulatory regime will be practically necessary for uranium mining to take place in Virginia anytime soon — it is important to remember that it is an absence of liberty, rather than an excess, that increases harm done to people and the environment in the first place.

Post image for Remembering Elinor Ostrom

Among the individuals with whom I wish I could have greater opportunities to exchange ideas is Elinor Ostrom. She passed away today, and now I must pursue that conversation indirectly — via her writings, her colleagues, and my recollections of those few conversations I did have the opportunity to enjoy.

Her work — for which she received the Nobel Prize in Economics – dealt with the way in which cultural enclaves often evolved institutional and technological solutions to resource management. And, not surprisingly, ideologues of various sorts claimed her work validated their world view.

Communitarians saw her work as “proving” that the classical liberal institutional view of private property, based on a formal rule of law, was not essential to ensure efficient allocation of resources. All one needed, they claimed, was to return to the common property world of yesteryear. Conservative agrarians also found much support from her research for their perspective. And, indeed, her work could be read that way – but it didn’t have to be.

Classical liberals, myself included, viewed her work far differently — as  evidence that the core institutions of a liberal world had developed (in embryonic form) much earlier than first thought. They were not imposed from above, but rather evolved as man began the long path toward modernity.

Moreover, some of her work did touch upon modern property rights — illustrating how commons could evolve into properties that could be restricted by use, by time, and in other ways that moved toward the formal property rights of today, ultimately meeting my friend Rick Stroup’s 3-D definition of property — definable, defensible, and divestible.

CEI’s Center for Private Conservation benefited greatly from some her insights. Once, she and Vincent, her husband, visited CEI and gave an impromptu seminar.

One question that I wished I’d pursued further with her concerns the transition from tribal common property management regimes to the modern private property regimes of today. Under what conditions do such transitions occur? What leads groups to accept a shift of this sort and what advantages (and penalties) does it create?

My own thoughts are that culturally enforced resource management rules can often be very creative and efficient — still, they rely on the culture being closed to outside transactions with others not sharing these cultural values. In a global mobile society, this suggests such closed systems are not likely to survive. However, unless the conditions for the transition to the modern formal rules have arrived, the situation can actually worsen. Fisheries, tropical forests, wildlife — all illustrate how the Tragedy of the Commons re-emerges when the old order collapses without anything to take its place.

Thus, CEI’s interest in pursuing the question: How can one assist isolated tribal enclaves to join an open world economy — when that shift is wise? The question is relevant in many areas of policy: how to better allocate the electromagnetic spectrum, offshore fisheries,  surface waters, and myriad other areas where property rights remain somewhere between the cultural controls Ostrom explored and those favored by classical liberals.

The right to trade a resource that is often restricted to one class of users (agricultural uses of water, for example) might be extended to urban or industrial users, but that liberalization threatens existing  arrangements and requires some trust that the new rules will be at least as effective. The very slow evolution of such liberalized trading policies suggests how little we understand social change. Ostrom had much to say about all this, and left us a rich legacy on which to ponder.

Those with an interest in conserving our oceans’ fish stocks and those with an interest in promoting private property should both be interested in my latest short study at CEI, “Give a Man a Fish.” Here’s the introduction:

Some policy makers and environmental advocacy groups are beginning to realize that the solution lies not in further government regulation, but in investing fishermen with property rights. However, government bureaucrats are also attempting to utilize this insight to gain even more power over fisheries, threatening to derail the momentum toward a more rational allocation of ocean resources. That would be bad news for both fish populations and the people who depend on them for their livelihood.

The oceans are an important source of food and income for people around the world. In 2007, proteins from fish accounted for 15.7 percent of the total global animal protein supply. In 2008, an estimated 44.9 million people were directly engaged in the fishing industry (both marine capture and aquaculture). However, the world’s fish stocks are not limitless, and are being depleted rapidly.

Two principal factors are at work. First, the billions of dollars in subsidies bestowed on the fishing industry by many governments makes overfishing profitable, even as per capita fishing yields decline. Second, the absence of property rights over fish in most countries means that there is no incentive for any party to husband this resource. In fact, the absence of property rights, combined with subsidies, creates a perverse incentive to deplete this scarce resource.

Attempts to prevent overfishing by promulgating regulations (which are often at odds with subsidies) have proved both ineffective and impossible to enforce. As long as the incentives are skewed by bad government policy, many fishermen will continue to work around regulations or simply neglect to report some of their catches—a practice known as “black” fishing that is all too prevalent. Ending subsidies and extending genuine property rights to fisheries will help solve these problems.

Thanks are due to my co-author, Roger Abbott, who provided much of the initial research effort, and to Michael DeAlessi, who wrote the definitive free market work on privatizing fish stocks, Fishing For Solutions, in 2003.

Post image for It’s Nothing Death, Poverty, and Ignorance Can’t Fix

The New York Times “Room for Debate” frets today about overpopulation (h/t Don Boudreaux). Julian Simon and liberty have long since come to the rescue, in case anybody’s listening. As Fred Smith at the Competitive Enterprise Institute points out, people are not just mouths and stomachs; they’re also hands and brains. So free them.

Post image for Human Achievement of the Day: Tree-Bombing Planes

As our frenemies over at Treehugger wrote last October about how Lockheed Martin had come up with an ingenious idea for its 2,500 decommissioned Hercules cargo planes: mass-planting of trees.

As The Guardian reports, while these planes were once used for aerial assaults, they can now drop sapling-containing cones instead of land mines — about 3,000 cones a minute or about 900,000 a day.

According to Peter Simmons from Lockheed Martin:

Equipment we developed for precision planting of fields of landmines can be adapted easily for planting trees.

…The tree cones are pointed and designed to bury themselves in the ground at the same depth as if they had been planted by hand. They contain fertilizer and a material that soaks up surrounding moisture, watering the roots of the tree.

The containers are metal but rot immediately so the tree can put its roots into the soil.

Lockheed has set up Aerial Forestation Inc., a company to market the idea. But just who might pay for something like this? According the article, the system works well for replacing forests that have disappeared for one reason or another. For example, desert areas like Egypt, where there is already a pilot program in the works, the Scottish mountains, or the Black Forest, part of which was cut down for strategic military purposes during the Cold War.

The turboprop plane, which was originally designed for troop medical evacuation and cargo transport, might someday be used to speed up the process of reforestation post-disaster. For example, when Mount St. Helens erupted in 1980, it took nearly 25 years for wind-blown seeds to take root to begin to regrow the forest that the super-heated pyroclastic flow leveled. Perhaps with this new way of planting we can accomplish the Herculean task of regrowing an entire forest in less than a decade.

This is what human achievement hour is all about: using human intelligence, creativity, and technology — not government interference or mandated conservation to come up with the solutions of the future.

A New York Times editorial highlights a struggle faced by the wild tiger, noting its population is down to approximately 3,200 from a high of over 100,000 just one century ago. Tigers face a number of challenges: their wild populations occupy a dwindling amount of space — putting pressure on their habitats, and a variety of tiger parts are highly valued, specifically by the Chinese.

Read the Times quote:

Ending the international trade in tiger parts, which are still believed to have almost magical powers in China and across Asia, will be harder to solve. This isn’t a matter of stopping a few poachers. It means shutting down hard-core traffickers and a high-profit black market. Wen Jiabao, the Chinese premier, is scheduled to attend on Wednesday, the final day of the meeting, which we hope is a good sign. China banned trading in tiger parts in 1993. It must actively discourage the cultural appetite for them and aggressively pursue traffickers.

You can almost hear the condescension jump off the page. Those silly Chinese and their primitive beliefs about medicine, and their revolting food and drink preferences. If only their government were able to make them more civilized, like us.

Imagine this paragraph is about the trade in drugs rather than tiger parts. Many sensible liberals understand the failure of the war on drugs — the inability of a government to stop market forces from meeting the wants and needs of individuals, the billions of dollars and lives wasted, the futility (and arrogance) of efforts to change a “cultural appetite.” Why are they unable to see that the trade in tigers is no different? I am confident that these same individuals support trade in cows, chickens, pigs, etc. all of which are killed in the same way.

The current wild tiger population is found in a variety of scattered countries throughout the world. One thing that many of them have in common is that villages located near tiger populations (forests) are often still living in poverty. Furthermore, without adequate protections against the tiger, these villages are threatened as tigers are capable of attacking and killing humans. When poachers arrive to kill tiger’s, villagers are more than happy to trade their localized knowledge of the area (to help poaching) in exchange for money and the removal of the tiger — a threat to their lives. Poachers are able to pay significant fees to these villagers for their assistance as one individual tiger can fetch as much as $50,000 on the black market.

The solution? In my opinion, more of the same will not work. Poachers will continue to be allured by large profits and conservation efforts will not succeed.

Allow tigers to be traded internationally. There is some worry that the Chinese truly prefer “wild tigers” rather than one which would be raised by humans, though I cannot imagine that their would be much hesitation when the price of tigers drops precipitously due to market forces. The incentive to poach tigers will disappear, and breeders of tigers will ensure there is an adequate number of tigers remaining to assist with re-breeding efforts if that becomes necessary.

Image credit: wallyg’s flickr photostream.

Many people are familiar with Annie Leonard, creator of “The Story of Stuff,” a factually inaccurate viral video being shown in classrooms throughout America. In the video, Leonard argues that we are running out of resources, using too much stuff, destroying the planet and anti-capitalist values are the solution to the problem. It is bad enough that “Green Journalists” push Leonard’s falsehoods, and some teachers think her work has educational value, but now I just learned that your tax dollars are funding Annie’s latest project.

Loop Scoops is a new kids program on PBS where Annie is the content director. The cartoon is geared to children 6 to 9 years of age where they are taught that juice boxes are destroying the planet, consuming less is inherently good for society and we are using too many resources. Sadly, the Corporation for Public Broadcasting and the Environmental Protection Agency provided the funding, which means your tax dollars are paying for it.

The video below highlights one of the videos within Loop Scoops.

I’ve heard some people ask me why we shouldn’t teach kids to recycle. The answer is because we are not running out of landfill space, we are not running out of resources and recycling is not always the right thing to do. Just read the Eight Great Myths of Recycling to understand why tax dollars should not be used to indoctrinate kids to fear their juice boxes.  Kids should be able to enjoy their childhoods without being bombarded with Malthusian propaganda.