Around the world, there are stark reminders of the impact that
economic decisions can have on the environment: the Dalmatian coast
of Croatia denuded of trees cut for shipbuilding, California's
Owens Valley sucked dust-dry of water to supply Los Angeles,
desertification in Africa due to overcultivation and overgrazing.
That's pretty much been the history of civilization, right up to
the Three Gorges Dam in China - the largest hydropower project in
the history of the world. When completed, critics warn, it will
inundate 244 square miles, threatening already-endangered wildlife
and forcing the relocation of at least 1 million people.
To a lesser degree, the reverse is true. Recent efforts to
protect the environment have hindered economic growth: coastal
zoning regulations blocking new resorts, clean-air and clean-water
statutes restricting industrial output, endangered-species laws
preventing housing developments and farming in certain areas.
This apparent conflict between ecology and economy - felt deeply
and fought fiercely by partisans on both sides - is etymologically
ironic. Both words come from the same Greek root - oikos, meaning
household or habitat.
But now there are growing signs that these two contentious
symbols of how we treat - and are sustained by - the earth are
coming together. One is the tendency among pro-environment thinkers
and activists to tout the necessity of factoring in the environment
when gauging economic well-being and setting policy (promoting
"Natural Capitalism," to use the title of a recent book on the
At the same time, there is a more conservative line of
scholarship and advocacy that emphasizes "market environmentalism" -
the belief that private property and self-interest lead to
environmental protection. Or as Aldo Leopold, conservationist and
author of "A Sand County Almanac," once wrote: "Conservation will
ultimately boil down to rewarding the private landowner who
conserves the public interest."
While no one is proclaiming a new age of peace and love between
the two, environmentalists and free marketeers are finding ways to
work together for mutual benefit.
For example, Environmental Defense recently teamed up with the
Political Economy Research Center to protect fisheries.
(Environmental Defense is a national research and advocacy
organization with a staff of more than 75 scientists, economists,
and attorneys. PERC, based in Bozeman, Mont., studies ways to apply
"free market environmentalism" to problems involving natural
resources and pollution.)
What both organizations would like to see - and are pushing
Congress to authorize - is the use of "individual transferable
quotas" (ITQ's) as a regulatory tool to reduce overfishing in the
Gulf of Mexico. Set by management agencies, ITQ's would limit the
commercial catch while allowing fishermen to buy and sell permits.
Other environmental groups, including Greenpeace, argue against any
scheme that acknowledges the right to own a natural resource - in
essence, a property right.
But Environmental Defense economist Peter Emerson says "providing
better economic returns for fishermen" has to be a part of
addressing the troubling decline in fisheries around the world. And
this in turn means finding ways to reduce "excess capacity" - the
number of fishing boats scrambling after a dwindling resource.
For free marketeers at PERC, this would be an important step
toward letting commercial markets and property rights help protect
While this coming together of interests is unusual, it is not
unique. The two organizations have worked together to promote water
markets (programs for buying and selling water rights in the
thirsty West), to end below-cost timber sales on national forests,
and to urge the "polluter pays" principle in determining who bears
the cost of environmental cleanup. …