The document argues that environmental problems are often caused not by market failures, but by the lack of well-defined property rights and markets. It provides several examples where well-defined property rights and markets helped protect environmental resources, such as elephant populations in Zimbabwe being protected on private lands. The document also argues that centralized, political solutions advocated by many environmentalists often fail to adequately address environmental issues and can even make problems worse.

1. Really Inconvenient Truths for Environmentalism By Iain Murray Competitive Enterprise Institute

5. Modern Green View In sum, greens argue that America’s traditional institutional arrangements—limited government, individual liberty, free markets, private property—are inadequate for today’s complex and vulnerable world. Pollution, they believe, is a natural result of individual self-interest operating in an insufficiently regu­lated marketplace.

6. Greens: Political Solutions John Kenneth Galbraith : Our private homes—beautiful; public parks—filthy. Still called for expanding the public sector! Barry Commoner: Only socialism can adequately protect the environment; need pollution prevention rather than cleanup. Jacques Cousteau: Holy Trinity of environmental policy: regulations, environmental education, green consumerism. Paul Ehrlich: too many people in the world; need China styled family planning. Lester Brown: Doomsday; demands government action.

7. Market Failure Claim The market failure theory says that, while beneficial, markets nevertheless fail in some areas; therefore political action is essential. A key complaint is that markets don’t adequately address “externalities”—those things that are not easily owned like air quality. Lacking ownership, these resources will likely be abused. Environmentalists even use the market failure argument to call for regulation of tangible items that are easy bought and sold in the marketplace, such as household trash.

8. Yet Greens Call for Central Planning The key “remedy” for alleged market failure is central planning, rather than take efforts. The Progressive Era belief in the superiority of political control led to increasing nationalization throughout the United States. Over one-third of our land is now politically controlled. Only a few other nations have a larger share of their land base in the public domain.

9. Reality: Markets Are Green Capitalism demands efficiency, and efficiency is an important environmental strategy. Wherever we have had freer markets, we have also had a better managed ecology. The conclusion is clear: Those who favor ecological protection should seek to expand the role of private stewardship arrangements to those resources that have historically been denied its protection.

10. Wealthier is Healthier ... and greener Wealth means better technology to clean air and water and higher demand for such amenities. Greater wealth means better and more innovative health care. Wealth makes ownership and private protection of wildlife feasible. Example: Former VP nominee Lloyd Bentsen’s brother is raising black rhinos in Texas. Because this individual has both wealth and influence, he was able to obtain a breeding stock of this endangered species.

11. Example: African Elephant Conventional “green” wisdom: Elephant populations are declining because of greedy market incentives. They believe that since ivory tusks are used for consumer products, they can eliminate the problem by eliminating markets. Response: UN ban on the ivory trade through the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

12. Ivory Ban Results Price increase + increased demand = more poaching . Even without ivory sales, the elephant still in peril. In many places, it is little more than a “giant rat” that destroys farms, property, and other resources. With government bans in place, impoverished people have lots of incentives to kill elephants, and no incentives to protect them .

13. A Market for Elephant Protection We should make elephants a financially beneficial asset by allow ownership and the activities that go with it, such as harvesting and tourism. Such private incentives give communities and owners incentives to protect the elephants and ensure long-term survival. Elephants go from being giant rats to  giant assets

14. Zimbabwe Elephant Program In fact, during the 1990s Zimbabwe employed a program to provide communities the right to own elephant preserves where travelers could come and see the elephants and engage in “mock” hunting. At the time the program was in full effect, elephant populations exploded in Zimbabwe, while they continued to decline in Kenya and other places where governments tried to protect the elephant with bans and by shooting poachers (when they could catch them).

15. Bengal Tigers Chinese medicine values tiger parts, so creating demand. Value of skin ~ $20-40,000, claws $20 each. Indian villagers get $60 for working to catch tigers. Average income for an Indian ~ $620 a year. Barun Mitra: Farmed tiger worth $40,000 for skin. Retail value of all products 3-5 times. Farmed tigers harvested after breeding, not before.

16. Examples: Markets for Water Quality Early in U.S. history, landowners sometimes built dams that flooded upstream users. That flooding—essentially a form of pollution—was treated as a trespass and the dam builder was forced to lower the dam. British fishing club, the Pride of Derby sued polluters to protect Magna Carta rights to fish. Court did not impose damages, but ordered an end to the pollution. Demonstrates how property rights can prevent stream pollution. Ownership of a pollution-sensitive species can ensure protection of the larger environmental value. By protecting privately owned fishing spots from pollution, the owners protect not only their portion of the river but also downstream areas. This is solution to the synthetic estrogen issue.

17. Hawk Mountain, PA Raptors (birds of prey, including hawks, falcons, eagles, and owls) were viewed as vermin in early America. One individual, Rosalie Edge, lobbied the government and the Audubon Society to help protect dwindling hawk species, but no one would help. She and her friends bought a mountain ridge in Pennsylvania where hawks congregated on their southern migration. By buying that land, posting it, and fencing it, she and her few friends were able to reject the tastes of the majority and protect the birds.

18. Lessons Learned Environmental degradation does not occur because of “market failure.” Environmental problems emerge where we fail to have markets (private property, individual rights, and the institutions of liberty). Where markets for environmental resources exist, those resources are protected and enhanced.

19. The Real Issue: Socialist Failure Plundered environmental quality: Soviet Empire produced many environmental disasters, ranging from rampant air pollution to devastated waterways. Saddam used the environment as a weapon. Plundered Resources: Compared to the West, socialist governments used far more energy and raw materials to produce steel, used more fuel in transporting goods around the country, and used more pesticides and fertilizers to produce wheat.

20. Why Socialism Fails the Environment Socialists: Since waste was a collective cost, there was little incentive to reduce it. Capitalists: Waste affects managers and owners directly so they control and reduce it. Collective Versus Private Costs

21. Green Socialism in the US In the United States, more politicized sectors are characteristically less mindful of environmental values. Timber Example Private: When the private sector harvests timber, it seeks to minimize the number of felled trees; failure to do so leads to unsustainable production and to long-term losses. Public: U.S. Forest Service routinely diverts large sums of taxpayer dollars to subsidize harvesting throughout the Rockies, Alaska, the southern Appalachians, and the upper Midwest that is not viable economically.

22. Central Planning Failures Central planners lack of knowledge, a problem that is pronounced in environmental policy. Technocratic governance lacks stability. Today, environment may be salient or even paramount, tomorrow, who knows? Politics is fickle. Environmental priorities will be set to meet political purposes rather than objective assessments of the problem. Baptists and bootleggers: Politics often best serves the organized and rent seeking coalitions rather than reason.

23. Failure to Have Markets Problems stem not from market failure—they result from the failure to have markets. The goal should be to institute markets to solve problems resulting from common ownership. As already discussed, this can be done for concrete resources as well as less concrete items like air and water.

24. Characteristics of Market Solutions Market solutions are not prescriptive, rather enabling. Institutions are often the greatest reform that is needed, e.g. market reforms in Africa will greatly increase resiliency. Lateral thinking provides win-win solutions, eg ATC reform can reduce oil use by 0.4 mbd. Market solutions very bad for politicians – no targets to control, no victories to announce.

25. Conclusion Free-market ideas have done much to advance economic welfare around the world. Free-market environmentalism might similarly free the entrepreneurial energies and creativity of the people of the world to advance ecological goals. It is time to explore that option further.