Endangered species for sale, for their own good and ours

Lynne Kiesling

At Aguanomics, David Zetland takes on a topic that I find greatly interesting and important — using private property rights to conserve endangered species, reduce poaching, and enable indigenous communities who live around such animals to thrive without species extinction as a consequence. In fact, one of my first-ever posts back in 2002 was about the Irbis Enterprises work with Mongolian herders and snow leopards. I also discussed property rights in tigers in a 2005 post and a 2006 post. Note that Irbis Enterprises is now part of the Snow Leopard Trust.

David observes

That’s why the Brazilian rainforest is disappearing — because government policy makes it easier to slash and burn and move on than to conserve the greenery.

The way to protect the rainforest, the whales, etc. is with stronger property rights, and individuals and companies (e.g., the Nature Conservancy) are set up to provide that protection. (To learn more about this kind of free market environmentalism, visit the Property and Environment Research Center.)

Note also that property rights are not just a binary yes-no either-or. Ownership implies a variety of rights (the frequent metaphor is that a property right is a bundle of sticks), and if you have defined, defensible, divisible, and alienable property rights, then you are more likely to get the beneficial outcomes David discusses.

For example, if you own a piece of property between my property and a lovely mountain range, if I value my view by enough, I can buy your development rights on your property. If that happens, then you and subsequent owners can build on the property, but not in a way that impedes my view. In that case the divisibility of your property rights means that you can profit from selling me a right that I value more than you do. [With thanks to Randy Simmons, from whom I've plagiarized this example.]

Think about what a boon this would be in the rainforest. Organizations like pharmaceutical companies and environmental nonprofits could own the land and the plants, water, and animals on it, and could exchange specific development rights that were contingent upon not destroying the assets. Think about the implications for another current tradeoff in land use in Brazil — rainforest vs. clear-cutting to plant soybeans for soy biodiesel. If the big ag companies had to pay to buy the rainforest, that would change the economics of soy biodiesel, not to mention the implications of rainforest owners being able to retain development rights and divide up the bundle of rights.

This divisibility is also how conservation easements work — a property owner sells (or gives, in the case of it being a charitable contribution) a piece of his/her bundle of rights.

The idea is pretty intuitive for land, watersheds, viewsheds, etc., but how about animals? To my mind, animals are more like water and less like land; animals move, and that means I think the characteristic of the property right in animals is the ability of the community to define and enforce use rights. That means treating the animal population as a common-pool resource and defining use rights (number allowed to kill per year, for example).

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