Natural Capitalism ; Reconciling Ecology and Economics to Improve Everyone's Standard of Living
Brad Knickerbocker writer of The Christian Science Monitor, The Christian Science Monitor
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 subject).
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 the environment.
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. …