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Posted Oct. 30, 2008

Scholar: Government Should Revise Approach to Environmental Regulation

Adler

Property-based institutions are the key to fixing the United States’ ineffective approach to environmental regulations, said Professor Jonathan Adler of Case Western Reserve University School of Law when he visited the Law School on Tuesday.

Adler, whose visit was hosted by the Federalist Society, pointed to the Endangered Species Act as an example of the federal government’s flawed approach to environmental issues. Adler is the director of Case Western Reserve University School of Law’s Center for Business Law and Regulation and a blogger for the The Volokh Conspiracy.

“Since the ESA was adopted in 1973, over 1,800 species domestic and foreign have been listed as either threatened or endangered. Now, as of several months ago, only 40 have been de-listed,” he said. “So, in 35 years, a few dozen species have come off the list from being threatened or endangered.”

Some of those species have been removed because of miscalculations or because they have become extinct, and the Endangered Species Act is not responsible for the few success stories, Adler said.

One reason several endangered bird species recovered and were removed from the list, he said, was the banning of widespread use of the synthetic pesticide DDT in 1972 — a year before the Endangered Species Act was adopted. Adler said there is not a single example of a species that has been saved by the ESA’s section 9, the provision that limits the modification of an endangered species’ habitat without government approval.

“Why is that a big deal? The only reason that’s a big deal is because the vast majority of endangered species rely upon private land for some or all of their habitat. If we don’t save them on private land, we’re not going to save them,” Adler said.

Further, Adler said section 9 isn’t just failing — it’s actually causing harm because it disregards the importance of incentives. He quoted Sam Hamilton, former Fish and Wildlife Service administrator of Texas, who said: “If I have a rare metal on my property, its value goes up. But if a rare bird occupies the land, its value disappears.”

Adler said some landowners will do anything they can to keep endangered species off their land so the government will not interfere and regulate the use of their property.  He cited a study that indicates the presence of the red-cockaded woodpecker has induced timber owners to cut their timber prematurely. The reason they did this, he said, is because the woodpecker lives in old trees.

“In fact, what’s going on is that significant current and future habitat for red-cockaded woodpeckers is being lost because timber owners are prematurely cutting their land because they are trying to avoid regulations,” he said.

Adler said this fear of regulation has caused an increasing number of landowners to prohibit scientists from coming onto their land to study or search for endangered species because of the fear that they might actually find them.

Africa provides further examples of the importance of incentives, Adler said. From the 1970s until the 1990s, Kenya and Zimbabwe tackled the same problem of endangered elephants in very different ways.

Kenya, he said, adopted a “Western-style” response by spending money to create elephant parks and preserves and implementing regulations prohibiting the harming or killing of the animals. In the meantime, Zimbabwe gave private landowners and communities de facto property rights to the elephant herds in their communities.

In that time, Adler said Zimbabwe’s elephant population increased from 45,000 to 65,000, while Kenya’s plummeted from more than 100,000 to about 26,000 because of the incentive created to poach ivory.

Adler said Zimbabwe’s approach worked because it allowed the communities to invest in the resource and benefit from its ability to thrive. Because landowners wanted elephants to live in the area, some actually tore down fences and stopped planting crops in order to create elephant habitat. After 20 years, Adler said the land suitable for elephant habitat in Zimbabwe actually doubled. The landowners farm the elephants for their ivory but also eat the meat and use the hide as leather.

“Where we see management arrangements based on property institutions, we generally see resources being managed well, becoming less scarce, not in danger of being depleted or becoming extinct. Where they are left in political control or outside of our institutional arrangements, outside of our property-based institutions, we tend to see those resources in trouble.”
Adler said U.S. environmental regulations are inefficient because they emphasize paperwork violations and permitting requirements, rather than actual environmental harm.  In some cases, he said, compliance with a permit actually excuses a landowner or company from the consequences of damaging the environment.

“We want regulations to be context specific. Air emissions of nitrogen oxides in Washington, D.C. have a different effect and may matter differently than the same amount of emissions in Bozeman, Montana,” Adler said. “In Washington, D.C., those emissions are going to contribute to a smog problem. They’re going to contribute to ozone formation. In Bozeman, Montana, they’re essentially going to be dispersed.”

Adler said the government should “keep its house in order” by focusing on effective management of its own responsibilities, including parks and preserves, and keeping entities like the military from contributing to environmental problems. Second, he said, regulators should find creative ways to expand property rights while building on common law principles. Finally, he encouraged decentralized decision-making that will allow experimentation and recognize the importance of incentives.

“Human civilization involves environmental impacts whether we like it or not,” Adler said. “If we realize that we’re actually choosing between many imperfect real-world alternatives, I think that the evidence suggests we move towards property-based approaches.”

• Reported by Ashley Matthews