Can Property Rights Protect the Environment?

Published June 1, 1998

What do depleted stocks of cod and haddock in the waters off Canada’s maritime provinces, and the environmental degradation clearly visible on U.S. federal lands, have in common?

They are both examples of how centralized government management of natural resources is harmful to the environment–and to people.

Where government calls the environmental shots, bureaucrats focus their energies on carrying out the mandates of politicians–who are usually happy to take credit for a warm and fuzzy “pro-environment” bill enacted into law just prior to an election. A lot of bad environmental law–such as the Clean Air Act Amendments of 1990 and the Food Quality Protection Act of 1996–was born under just such circumstances.

As for the bureaucrats, they are rarely held accountable for the decisions they make. “They don’t reap financial benefits from making good decisions, and they don’t pay the costs of bad decisions,” notes Elizabeth Brubaker of Environment Probe Canada. “For them, there are no rewards, no punishments, no incentives.”

Canada: Institutionalized Overfishing

The unholy alliance between politicians and bureaucrats has wreaked havoc with the once-flourishing fishery along the east coast of Canada. Thanks to government mismanagement of the fishery, annual catches of cod and haddock–which once averaged 500,000 metric tons–have been replaced by a moratorium on fishing for these prized species.

As Brubaker explains in the April 1998 issue of Fraser Forum, Ottawa’s decision in the 1970s to promote what it called “expansionist development policy” led to a catastrophic–and perfectly predictable–depletion of the maritime provinces’ fabled fish stocks.

How did this happen? Eager to lend a helping hand to Canada’s fishing industry and to curry favor with voters in the Maritimes, the federal government let loose with a torrent of goodies, including tax breaks, loan guarantees, and subsidies for boat owners, fish processors, and ordinary fishermen. The result, Brubaker notes, was “institutionalized overfishing.”

Ignoring the warnings of scientists, the government continued its policies throughout the 1980s until there were few, if any, fish left to catch. By 1992, the government had no choice but to issue a moratorium on cod and haddock fishing. Over forty thousand fishermen and fish processors were thrown out of work. It was, quite simply, a social, economic, and ecological disaster.

“Who was held accountable for this?” Brubaker asks. “Who got fired, or demoted, or even reprimanded for this? No one! This is disgraceful.”

U.S.: The Tragedy of Public Lands

The well-documented ecological problems afflicting U.S. national parks and other federal lands provide another example of environmental mismanagement by government agencies. In Yellowstone National Park, for example, flora and fauna alike have undergone a frightening deterioration in recent years resulting from poor wildlife management practices on the part of the National Park Service.

In both Canada and the U.S., the bureaucrats overseeing their respective realms have had no stake in the outcome of their decisions. Incentives for good stewardship are lacking in Yellowstone, just as they were in the Maritimes.

Imagine Market Incentives

But what if, say, the fishermen in Newfoundland or Nova Scotia had been in possession of property rights to the fish? No longer encumbered by the “tragedy of the commons,” where open access for all fosters a get-it-while-you-can mentality, fishermen with property rights to the source of their livelihood would have good reason to conserve their stocks.

Ownership of ocean fisheries is admittedly a tricky business, but it can be done. In the state of Washington, for example, oceanfront property extends to the low-tide mark (instead of the traditional high-tide line). There, the owners of oyster beds vigorously protect water quality. “In fact,” Brubaker notes, “oystermen who own tidelands are widely credited for the health of many of Washington’s watersheds.”

If farmers, ranchers, and fishermen don’t practice good stewardship, they go out of business. By contrast, poor stewardship on the part of officials in Washington or Ottawa carries no penalties and can even lead to promotions and bigger budgets. Because they get the incentives right, free markets and private property rights are a far more sound approach to environmental protection than the command-and-control approach of even the most well-intended politicians and bureaucrats.