Conservation Without Regulation

In his Oct. 19 lecture titled “Conservation without Regulation” Case Western University Professor Jonathan Adler proposed that our nation’s current approach to environmental policy is ineffective.

Adler said government regulations don’t solve environmental problems and often create new ones as side-effects. The Endangered Species Act of 1973 actually disincentivized landowners from joining in conservation efforts. Rare species protected under this act became economic liabilities. When a species, such as the red-cockaded woodpecker, is listed under the Act, landowners who provided habitat for it are motivated to destroy that habitat before the government comes in and deprives them of economic use of their land.

“Regulations tell private landowners that we’re going to penalize you if you take voluntary actions to preserve endangered species,” Adler remarked. Such penalizations come in the form of restrictions on how the land can be used, which are cumbersome and costly. In the case of the woodpecker, federal regulations precipitated its decline, as well as the reduction of local tree populations where it nested.

Adler argued that not a single recovery on the endangered species list occurred because of its placement on that list. This would suggest that heavy-handed command-and-control regulations are not the solution to environmental problems. Instead, the key to resource conservation is creating market-based approaches that use financial incentives. He took the case of the African elephant, which is hunted for its tusks and hide. Zimbabwe succeeded in preserving its elephants by granting local communities the right to manage rural elephant populations. In Kenya, bans on hunting actually led to the decline of the elephant population.

The success of Zimbabwe’s approach lay in its recognition of incentives. It was in the community’s interest to hunt sustainably so that there would be more elephants to profit from in the future. By contrast, Kenya’s plan was ineffective because it didn’t create enough incentive to discourage hunting. Criminalizing the hunting of elephants won’t sufficiently discourage hunters if there’s still a profit to be made.

If the U.S. government were to organize regulations around incentives like Zimbabwe did, its conservation efforts would be more successful, Adler said. This can be done by awarding property rights to resources such as water. Having a property right creates the possibility of a market where a commodity can be bought and sold. There is an incentive to conserve because what’s left over is of economic value.

Moreover, markets have a capacity to innovate that can be harnessed by the right government policies. Currently, federal regulations require factories to install technology on their smokestacks to reduce chemical pollution. Adler believes a tax on carbon emissions would be more effective; it would encourage companies to find ways to create their product without as much pollution. In many cases, the government might not even need to regulate markets, because companies will develop economically feasible technology to stay competitive. In the communications industry, copper wire was phased out by silica because it made technology faster. It also reduced our reliance on copper, which was a steadily diminishing resource.

Adler cautions that there is no magic solution because “human civilization naturally entails massive disruption of the world around us.” However, the most effective conservation policies will take property ownership, markets and incentives into consideration. It is also not efficient for the federal government to impose policies upon state governments and their constituents. Decentralizing the regulatory process will allow local governments to experiment with different policies, without being obligated to abide by any specific one.

The lecture was hosted by Hamilton College’s Environmental Studies Program and the Government Department.

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