TCS Daily

A New Opportunity

By John Baden - June 3, 2003 12:00 AM

No prominent member of the Bush administration has convincingly made the case for an environmentalism based on property rights, incentives, and sensible, sustainable regulations. This alternative would be far more effective, efficient, and ecologically sensitive than the command-and-control approach favored by many Greens.

The resignation of EPA administrator Christie Todd Whitman offers the administration a wonderful opportunity to demonstrate the power and effectiveness of a new environmentalism. This approach was developed in universities and pioneered by several environmental groups in the 1970s. The Environmental Defense Fund (now Environmental Defense) was prescient with its early adoption. The keys are sound science, market incentives, innovation, local leadership, and entrepreneurship. These are consistent with principles claimed by Republicans.

Republicans are alienating their natural constituency: well-off and well-educated suburbanite "environmentalists." As wealth and education increase so does environmental sensitivity. This shouldn't be hard to understand.

If the broader Republican agenda successfully increases the prosperity of Americans, then demand for environmental quality will grow. As Don Coursey, of the Harris School of Public Policy at the University of Chicago, has demonstrated, the demand for environmental quality resembles that for BMWs and foreign travel. As income rises 1 percent, demand for environmental quality increases 2.5 percent.

One of the first lessons responsible parents teach their children is both simple and valid: if you make a mess, clean it up. Yet too often the GOP caves to special interests who use their political clout to escape this admonition. This is especially true regarding hard rock mining in the West, where the EPA estimates 40 percent of the headwaters of all western watersheds are polluted by mining wastes. Failing to require companies to bear the full costs of their actions is really a subsidy. Sometimes it's huge.

For example, the now-bankrupt multinational Pegasus Corporation operated the Zortman-Landusky mine near the Fort Belknap Indian reservation in Montana. Since commencing mining in 1979, the operation has accumulated a poor environmental record. The $32 million reclamation bond it was forced to post in 1996 is grossly insufficient (by about $22 million) to ameliorate the damage. In these circumstances, if reclamation occurs, taxpayers are stuck with the tab. This violates reasonable standards of equity, efficiency, and environmental quality. Republicans claim these are among their core values.

President Bush could adopt a new environmental vision to replace the regulatory, bureaucratic, one-size-fits-all approach with a decentralized, incentive- and community-based, alternative. This perspective relies on well-tested but generally misunderstood principles. They include recognizing:

  • There are no simple, costless solutions, only trade-offs among competing values.

  • Prosperity and environmental quality are complementary, not competitive.

  • Institutions vary dramatically in the information they generate and the incentives they provide.

  • Both incentives and information influence behavior.

For a generation, most Greens rejected these principles. They saw evil and ignorant people, and too little government, as the primary sources of environmental problems. Their solution was to place ethical, educated people in positions of authority and empower them to pursue good policies. Their search was for Green Platonic despots, not better institutions.

It's naïve to believe that environmental protection depends on good people in high places. Over time, political forces usually prevail. Environmental harm and vast economic waste normally follow.

The most effective environmental leaders favor approaches based upon flexibility, cooperation, and secure property rights. They understand how the right incentives can foster environmental quality in the same way they cause people to improve and refine software.

Groups embracing this approach have enjoyed spectacular success - and some failures. Ducks Unlimited has a 65-year legacy of habitat protection extending from the arctic tundra of Alaska to the tropical wetlands of Mexico. Since 1937 DU has protected more than 9.8 million acres of waterfowl habitat (an area over four times the size of Yellowstone National Park) and has raised over $1.5 billion for conservation.

Unless Republicans adopt constructive reforms consistent with their claimed ideals, they will continue to alienate their traditional constituency - the well-off and the well-educated. We hope Bush II is sufficiently brave and creative to enact those reforms.

John A. Baden, Ph.D. is chairman and Pete Geddes is program director of the Foundation for Research on Economics and the Environment (FREE) and Gallatin Writers.

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