The Environment and Property Rights

1 minute read

I did not have the time to write something for Earth Day, but luckily the Cato institute published an extremely balanced and explanatory article on the difficulties with creating and debating environmental policies. The problem is not a matter of 'facts', but of the institutional framework for the environment and ideology. The problem arises with initial endowments, resource accessibility, and free-riders, issues all intrinsically linked to the use of public goods. In a world where everyone has equal access to environmental goods in a region, the differences in subjective value creates endless debates over what policy is 'right' for the environment.

As Douglass North discussed in his book Structure and Change In Economic History, ideology is what shapes our perception of reality. Each side has an endless source of scientific facts supporting their claims, and that is not the problem at hand. How people interpret facts is what creates the issues and political gridlock.

However, despite these difficulties, policy debates and analysis do provide a major service; primarily, they allow us to see where large gains can be made by removing inefficient policies. Regardless if you love the environment or not, there are some services that cost far more than they are worth. Where carbon sequestration, smog reduction, and dumping controls may be extremely beneficial, costly environmental zoning and mandatory clean up laws often are not.