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Property rights can help ease environmental concerns

Earth Day is supposed to be about raising our awareness of the environment. Unfortunately, what's often raised instead is the amount of public scolding.

This doesn't arise in most other situations where we're consuming something. No one makes you feel guilty, for instance, for loading up your shopping cart with groceries.

Environmental goods are different, because -- in most cases -- we're not paying the tab for what we consume. That leads some to say government ought to determine their use. But evidence shows that environmental problems arise from too little free enterprise, not too much.

Our hand-wringing over the environment takes place because there's no price sticker on the air, the open water, wildlife, the "wide open spaces" and other environmental amenities. In the grocery store, by contrast, nobody bothers me about my consumption of tomatoes or cereal or soda. The price I pay for those items covers the cost of the resources used to produce them.

Free-market pricing incentivizes me not to overuse the goods, and incentivizes suppliers to produce them as long as the price covers their cost. This is absent for most environmental goods.

For prices to exist, we have to define who owns what. That's where the challenge lies. It might be obvious who owns your front lawn, but who owns the sky 1,000 feet above it? Though difficult in some cases, history shows us that this approach is useful.

Some dramatic cases of resource overuse have been solved following the implementation of property rights. The nation of Namibia had long experienced diminishing wild animal populations due to poaching. In the 1990s, its government began allowing groups and communities to own large tracks of rangeland, as well as the wildlife residing there.

Overnight, people gained a personal financial incentive to conserve the wildlife on their land. As a result, a thriving ecotourism industry emerged.

There are plenty of similar examples. In Colorado, the right to have a water stream flow through a landowner's property is protected and has led to privately funded stream restorations and creation of fisheries and wetlands. Private property protection of oyster beds in Louisiana has led to their flourishing.

With a market-based approach, prices reflect the cost of utilizing environmental goods. We regulate our own behavior -- and pay the cost of it. Where the status quo inevitably pushes government's nose into the minute details of people's lives, property rights-based pricing enables us to take ownership of our own choices and responsibly let go of our burdensome concern about the consumption patterns of others.

This approach is not a panacea, but it points environmental policy in directions we can all appreciate: a cleaner environment, a growing economy and freedom to make our own choices.


John Garen is the Gatton Endowed Professor of Economics at the University of Kentucky.