Thanks to Jesse Walker at Reason for the link to the Baltimore Sun’s Bay & Environment Blog. If, like me, you are interested in environmental issues pertaining to water use, this site looks like it will be quite useful.
The current top post by Rona Kobell prompts me to think about something that I discussed in one of my classes last week:
Two conversations recently have gotten me thinking recently about the environment and the way we live.
The first one: I was introduced to someone as The Sun’s Chesapeake Bay reporter, and the person asked, “Are you a greenie?”
The second one: I was on a panel discussion about the environment, and we were talking about farmers and land development being the largest sources of bay pollution. The person leading the discussion pointed out that farmers are just trying to make a living, and everyone needs a place to live, so who’s the bad guy here? Who’s fault is the pollution in the bay?
I would claim that the “who’s to blame?” question is the wrong question to ask, and precisely for the reason that Rona offers: “we’re all to blame”. But I’d put it another way: given current policy, the Chesapeake Bay is a common-pool resource with ill-defined property rights. The problem with the “who’s to blame” question with respect to CPR use with ill-defined property rights is the same as the problem with the existing federal and state water regulations: they do not treat the problem as a problem of multiple conflicting uses of a scarce CPR. They instead treat it as one type of use imposing costs on all other uses of the CPR, when in fact the problem is that the uses conflict with each other.
In other words, they treat the problem as a Pigouvian one-sided externality problem when in fact it’s a Coasian problem of reciprocal costs that all uses impose on each other. Until policymakers start thinking about the reciprocal nature of costs that the multiple uses of a CPR create, they will not focus on the underlying problem: the ill-defined property rights and the importance of using policy to devise governance institutions to enable all of these different users to manage their use of the CPR.