Free-market approaches to regional environmental assets successful and feasible, experts say

As the City Council readies its Study Session on Climate Change, we humbly suggest a consideration of how free market policies can advance environmental betterment, instead of heavy-handed gov't actions. In an Econlib article, former U.S. Office of Policy Analysis director Richard L. Stroup discusses the feasibility of privately managed parks and environmental habitats. A past study found that state parks, which operate mostly from user fees, serve more people and provide superior services as compared to federally tax-funded parks.

Could parks, even national parks like Grand Canyon or Yellowstone, be run privately, by individuals, clubs, or firms, in the way the Becks ran Ravenna Park? Would park users suffer if they had to support the parks they used through fees rather than taxes? Donald Leal and Holly Fretwell studied national parks and compared certain of them with state parks nearby. The latter had similar characteristics but, unlike the national parks, were supported in large part by user fees. The comparisons were interesting. Leal and Fretwell noted, in 1997, that sixteen state park systems earned at least half their operating funds from fees. The push for greater revenue led park managers to provide better services, and more people were served. For example, in contrast to nearby national parks with similar natural features, Texas state parks offered trail runs, fun runs, “owl prowls,” alligator watching, wildlife safaris, and even a longhorn cattle drive. Costs in the state parks were also lower. Park users seem happy to pay more at the parks when they enjoy more and better services.

Private individuals and groups have preserved wildlife habitats and scenic lands in thousands of places in the United States. The 2003 Land Trust Alliance Census Tables list 1,537 local, state, and regional land trusts serving this purpose.1 Many other state and local groups have similar projects as a sideline, and national groups such as The Nature Conservancy and the Audubon Society have hundreds more. None of these is owned by the government. Using the market, such groups do not have to convince the majority that their project is desirable, nor do they have to fight the majority in choosing how to manage the site. The result, as the federal government’s Council on Environmental Quality has reported, is an enormous and healthy diversity of approaches.

Nevertheless, it is important to note that the government is still involved, even in the case of privately donated and privately owned trust lands. Most of these private conservation choices benefit from tax advantages, as conservers gain charitable deductions from taxable income. Tax law, therefore, influences what sorts of donations qualify; it also increases the total amounts by rewarding all qualifying choices by tax reductions. Who gains from the increased conservation? Most often it is first and foremost the nearby landowners. When donors of trust lands retain adjacent property, they benefit from the existence of the trust lands to a degree greater than other citizens more distant. Open space usually raises the value of nearby lands.

Further, when many polluters and those who receive the pollution are involved, how can property rights force accountability? The nearest receivers may be hurt the most, and may be able to sue polluters—but not always. Consider an extreme case: the potential global warming impact of carbon dioxide produced by the burning of wood or fossil fuels. If climate change results, the effects are worldwide. Nearly everyone uses the energy from such fuels, and if the threat of global warming from a buildup of carbon dioxide turns out to be as serious as some claim, then those harmed by global warming will be hard-pressed to assert their property rights against all the energy producers or users of the world. The same is true for those exposed to pollutants produced by autos and industries in the Los Angeles air basin. Private, enforceable, and tradable property rights can work wonders, but they are not a cure-all.

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Image by Chris Favero