Reason Foundation - Authors > Michael De Alessi

Digging Our Way Out of the ANWR Morass

info@reason.org (Michael De Alessi) — Tue, 01 Mar 2005 00:00:00 EST

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Conservation Through Private Initiative

info@reason.org (Michael De Alessi) — Sat, 01 Jan 2005 18:00:00 EST

Executive Summary

In the polarizing world of environmental policy, the popular press is replete with stories on the incompatibility of conservation and commerce. From loggers pitted against owls to developers fighting wetlands regulations, the rhetoric in politics and in the media all too often gives a false impression that there must be a choice between one or the other. But conservation is out there. It’s happening. And it’s going on amidst commercial activities, especially on private lands.

So why don’t we hear more about private conservation? One reason is that success doesn’t sell newspapers nearly as well as controversy. Another reason is surely that private conservation efforts, especially habitat protection, are difficult to quantify under any circumstances, but the regulatory restrictions that often accompany habitats such as wetlands mean that private landowners are downright reticent to scrutiny.

Why have private conservation efforts been successful? Largely because they concentrate on the end result of environmental protection, rather than the bureaucracy of environmental protection, which doesn’t guarantee a result. One of the great shortcomings of many command and control regulations is that they are more process-oriented than output-oriented. In many cases, success has been measured by permits issued or violations cited, rather than by specific, targeted improvement in environmental quality. Indeed, conservation efforts should be measured against a set of well-defined performance metrics to recover endangered species, protect habitat types, and so on. To prove their contribution to environmental quality, and for private conservation efforts to be more widely recognized (and less onerously regulated), landowners are going to have to agree on and measure such a set of well-defined performance metrics.

Measuring performance, as well as benchmarking and setting annual performance goals, may be the only way to cut across the partisan lines that have been drawn over environmental protection. Agreeing on how to define success often unites those who are genuinely interested in improving environmental quality. Of course, many measurements are site-specific, but striving to empirically compare different approaches is a vast improvement over rhetorical arguments.

The Endangered Species Act (ESA) is one such example. Proponents of the act believe that the restrictions it imposes have kept many species from going extinct. Critics of the act point out that it has failed to recover more than a handful of species over the last thirty years, and that those same restrictions may do more harm than good to endangered species, especially on private land. This difference of opinion has hindered reform efforts that might otherwise have improved the performance of endangered species recovery efforts.

One of the most promising environmental policy reform efforts in recent years is known as Enlibra, a madeup word that originated with an effort by the Western Governor’s association to deal with the declining effectiveness of many federal environmental regulations. The idea behind Enlibra is that the low-hanging regulatory fruit has been picked, which means that stricter regulations often result in very little or even no improvement in environmental quality, while imposing much higher costs and regulatory burdens. Water pollution regulations, for example, initially targeted point sources of pollution. Cleaning up these large, single outfalls of industrial or municipal pollution greatly improved environmental quality. Now, however, most water pollution problems result from non-point sources, that is, a multitude of small inputs that add up to problems in a watershed. Because these sources are difficult to pinpoint or even measure effectively, regulatory approaches have been cumbersome, expensive, and far less effective.

Of course, government regulation has had its successes, but command and control approaches to environmental protection have essentially run aground. Unless state and federal governments start using more innovative approaches to solving environmental problems, we will just spend more and more, yet achieve less and less. Perhaps conservation has come as far as it can through government regulation. A new, more effective approach is needed, and private conservation has shown itself a capable and viable alternative.

National parks are overgrazed and overcrowded, fisheries are depleted, nutrient runoff is a problem in many watersheds, catastrophic forest fires routinely rage through the southwest, fresh water wars continue in the west, and endangered species issues continue to set landowners against environmentalists. Government oversight of these problems rests with such organizations as the U.S. EPA, the Interior Department, and the National Marine Fisheries Service (part of the Commerce Department). Each has over thirty years of experience trying to deal with these problems, and none has an enviable track record. The reason for this is that to date, most environmental regulations and restrictions generally get the incentives all wrong.

Perverse regulations encourage everything from overfishing to pollution, to habitat destruction on both private and public lands. And they have also suffered from a lack of any realistic performance review. For example, the ESA has not been substantially reformed since its passage thirty years ago, despite the fact that as many species have gone extinct as have been officially recovered in that time.

Despite the dismal track record of such restrictive efforts at the esa, for every one of these problems there is an environmental lobby that insists on an increased role for federal and state government regulation and oversight. These environmental problems, however, have been around for decades, and are not going to get solved by using similar decades-old approaches.

One problem is that unlike the marketplace, where by definition voluntary trade makes everyone involved better off, politics is a zero-sum game, where gains to one group are made at the expense of another. Turning public lands into wilderness areas, for example, can only be done by taking land away from those who might want to use it as pasture or timber land, and vice versa.

Oil and gas exploration is another classic example. Whether to drill in the Arctic National Wildlife Refuge (ANWR) or not has been a wedge political issue for environmentalists since the start of the George W. Bush administration. Yet a number of local chapters of the National Audubon Society, a particularly vocal opponent of drilling in ANWR, have drilling operations on their own properties. Why? Because they understand the tradeoffs involved (increased revenues weighed against the risk of environmental damage), and the decision is an internal one. It would be interesting to see just what the Audubon Society would do with the deed to ANWR.

The need to search for more viable alternatives is clear, and the purpose of this study is to show that commerce and conservation have been, and continue to be, inextricably linked, especially when tradeoffs and risks can be internalized by private groups, individuals, or non-profits.

For every spotted owl controversy, there are thousands of cases where conservation and commerce happily get along, from ranchers protecting stream beds to the Louisiana Audubon Society operating oil and gas drills in one of their bird sanctuaries. In fact, it is because these lands are privately owned that the controversy is minimized. On public lands, land-use decisions inevitably wind up in the court of politics, where rhetoric and extremism trump substance and tradeoffs.

Human ingenuity and the entrepreneurial spirit underlie most conservation success stories. Under private ownership and stewardship, problem-solvers become remarkably resourceful at protecting and enhancing the value of what they own, for reasons as broad as profit and aesthetics, and ranging from fisheries and forests to backyard gardens. No one questions the impetus for a cleaner, healthier, species-rich environment. How we get there, however, is another question. The most promising efforts to address the perverse incentives typically created by command and control regulation are the use of market mechanisms and performance measures, both of which rely on getting the incentives more inline with the desired results, and on tapping into the same human ingenuity that drives commercial activity. Using performance indicators to measure and acknowledge conservation success, especially in the context of using the land is the next logical step.

Catching the Aquaculture Wave

info@reason.org (Michael De Alessi) — Wed, 01 Dec 2004 00:00:00 EST

Executive Summary

The island chain of Hawaii is poised on the leading edge of the development of the legal and technical frameworks necessary for open-ocean cage fishfarming. One offshore farm is up and running, and another has all the permits and licenses and is just waiting for the final rounds of financing. As these operations and other potential operators mature and grow, and with the right legal and regulatory reforms, Hawaii has the potential to lead the nation in quality offshore oceanic fish cultivation. This could be a tremendous boon to both Hawaii’s economy and its general entrepreneurial climate.

Yet many obstacles remain. Despite studies that show no measurable impact to the environment of the aquaculture already in operation, misplaced fears based on other situations and technologies coupled with a stifling, extended bureaucratic process that allows individuals to contest the permit process with or without reasonable cause hampers Hawaii’s chance to develop offshore fishfarming and expand its shrunken economy. This report explores case studies of fishfarming in Hawaii and how the state could reap economic benefits while guarding local waters against environmental impact. With a streamlining of its bureaucracy, Hawaii could soon lead the nation in offshore oceanic fish cultivation, spelling success for its citizens as well as take pressure off of wild stocks of depleted fish populations. It would also powerfully demonstrate how human ingenuity, properly channeled through free enterprise, could sustainably feed people and maintain, or even enhance, a healthy environment.

New Zealand the Leader in Healthy Fishing

info@reason.org (Michael De Alessi) — Mon, 26 Jul 2004 00:00:00 EDT

Santa Barbara News Press

It is heartening to see attention given to both the decline of our ocean fisheries and wildlife and to possible solutions. Fishermen, however, are not hellbent to "beat out good science," they're simply trying to make a living under a truly perverse regulatory system, one that encourages overfishing and habitat destruction.

Marine reserves offer great promise, but they are incomplete without changing the nature of fisheries management.

In New Zealand, the creation of harvest rights to fish so self-interest lines up with conservation and the future health of fisheries resulted in something anathema to most fisheries in the United States: fishermen agreeing to catch less than they were allotted by the government.

From communal village tenure over coral reefs in the South Pacific to the offshore fisheries of New Zealand, owners of fishing rights or territories press for and enforce their own conservation measures, including marine reserves and multi-species management.

Marine reserves can only be as effective as the respect given to their boundaries, and as long as we manage fisheries to encourage rapacious behavior, fughettaboutit.

Michael De Alessi is director of natural resource policy at Reason Foundation

Resolving Overfishing

info@reason.org (Michael De Alessi) — Thu, 01 Jul 2004 15:21:00 EDT

Fraser Forum

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Letter to US Commission on Ocean Policy

info@reason.org (Michael De Alessi) — Sat, 01 May 2004 15:23:00 EDT

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Oceans Need Innovation, Not Bureaucracy

info@reason.org (Michael De Alessi) — Mon, 26 Apr 2004 00:00:00 EDT

Knight Ridder Tribune News

Depending on whose science you subscribe to, our oceans are either: on the verge of trouble, in trouble, or on their deathbed. And you can pick your poison: habitat destruction, overfishing, and pollution are just a few of the problems we face.

The 16-member U.S. Commission on Ocean Policy just released a nearly 500-hundred page preliminary report, 2 1/2 years in the making, which is supposed to nurse our oceans back to health. Unfortunately, apart from making a timely acknowledgement of the environmental, commercial and recreational importance of the oceans, the report leaves much to be desired.

Instead of applying a comprehensive framework to oceans policy, the commission focuses on creating more administrative offices such as the National Ocean Council and Presidential Council of Advisers on Ocean Policy. Think Department of Homeland Security for our oceans. We're on orange alert, or is it yellow today? As most taxpayers, especially fresh off tax day will attest, bureaucracy does not equal "coordination," no matter how high it reaches or how small the minutiae it addresses.

In addition to layers and layers of added bureaucracy, the report recommends increasing federal research dollars and security for shipping and oil and gas activities (hardly surprising proposals considering the commission consists primarily of academics, federal agency representatives, and the oil and gas industry — all groups that would benefit).

At all levels, the heart of the problem is what is referred to in environmental circles as the "tragedy of the commons" — resources are depleted or damaged because they are free for the taking, whether fish, clean water or habitat.

The commission still doesn't seem to realize that more regulation and more government agencies won't beat man's ingenuity and the tragedy of commons. Consider Alaska: the state thought its halibut stock was being overfished, so it slashed the halibut fishing season from almost 10 months to just 72 hours. The result? There was no significant decrease in the number of halibut caught because fishermen and companies packed 10 months worth of fishing into three days.

The key to rehabilitating and sustaining our oceans is stewardship and property rights. The Alaskan halibut fishery is now a success story, not because of new regulations, but because it is one of the few fisheries in the United States managed on a property rights model. Fishermen have Individual Fishing Quotas, which allocate the right to catch a specific percentage of the scientifically determined total allowable catch. The quotas give fishermen both the incentive and the means to care more about the health of our seas. Fishermen in New Zealand using this system have actually voluntarily reduced their catch levels because they know the long-term health of the oceans is in their best interests.

Traditional societies in the Pacific Northwest and the Hawaiian Islands used these concepts to protect marine resources. Native Americans often had complex arrangements within and between tribes to allow salmon to move up and downstream in order to maintain the spawning runs and ensure a future supply of fish. Native Hawaiians recognized triangular strips of property running from mountaintop out to sea and respected the boundaries. According to a Hawaii Sea Grant study, this system was set up "to sustain the pattern of Hawaiian life," and included strict limits on harvests of "species, types, sizes and portions of fish."

In the eyes of the commission, property rights are valuable tools for solving specific problems, but not as an overall framework for oceans policy. This is a mistake. Of course there is more to managing ocean resources than fishing, but the fishery dynamic applies to every facet of oceans management. After all, most Americans are far more concerned with the price and quality the fish at their local supermarket or the health of their favorite fishing holes than they are about deep-sea topography or federal agency hierarchies.

The health of our oceans deserves bold, forward-thinking policies that have proven highly successful across the world, not another government agency promising more research.

Michael De Alessi is director of natural resource policy at Reason Foundation

Ivory Tower Take on Ivory Trade

info@reason.org (Michael De Alessi) — Thu, 01 Apr 2004 15:29:00 EST

Econ Journal Watch

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Alternate Framework for the US Commission on Ocean Policy

info@reason.org (Michael De Alessi) — Thu, 01 Apr 2004 00:00:00 EST

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Overcoming Three Hurdles to IFQs in US Fisheries

Thu, 01 Apr 2004 00:00:00 EST

Introduction

For decades, U.S. federal ﬁsheries policy has relied on direct regulations to pre-vent overﬁshing. Such an approach has not eliminated overﬁshing, nor has it prevented the enormous waste and hazards of ﬁshing under a destructive race for ﬁsh. The good news is that there is a better way to manage our ocean ﬁsheries. Individual ﬁshing quotas (IFQs), also called individual trans-ferable quotas (ITQs), have proven effective in restoring health and sanity in a host of ﬁsheries around the globe.

In spite of these successes, there are a number of obstacles to IFQ implemen-tation. To begin to address these, PERC, Reason Foundation, and Environmental Defense held a luncheon brieﬁng on Capi-tol Hill on November 12, 2003, for federal policy makers and their staffs. The brieﬁng, titled “Overcoming Hurdles to Implement-ing Individual Transferable Quotas (ITQs) in U.S. Fisheries,” was well-attended and opening remarks were made by Congress-man Wayne Gilchrist (R-MD), who plans to introduce legislation re-authorizing the Magnuson-Stevens Fishery Management Act. Mr.Gilchrist assured everyone in atten-dance that ﬁshery management legislation needs to be “as reasonable, as pragmatic as possible,” and needless to say, more effec-tive than in the past.

The following discussion, based on the November 12 brieﬁng, describes the prob-lems in U.S. ﬁsheries, the potential role of IFQs, and the three most contentious issues surrounding their implementation. These are the questions of whether a two-tiered system that includes both IFQs and individual processor quotas (IPQs) is needed, what restrictions, if any, to place on IFQs, and whether or not to place a sunset provision on IFQs.

Support for the brieﬁng and this booklet is provided by the Alex C. Walker Educational & Charitable Foundation, the Bradley Fund for the Environment, and the Charles G. Koch Charitable Foundation. It is produced by Dianna Rienhart and is available in hard copy from PERC, Reason Foundation, or Environmental Defense or online at www.ifqsforﬁsheries.org.

California's Fishy Fish Laws

info@reason.org (Michael De Alessi) — Mon, 29 Mar 2004 00:00:00 EST

Tech Central Station

California's coastline is one of its greatest natural assets. Below the surface however, a number of serious environmental problems loom, principally over-fishing and the loss of productive marine habitat.

California's answer to these problems was supposed to come in the form of 1999's Marine Life Protection Act, which would create a system of marine reserves where fishing would be prohibited. But the massive deficit means the state does not have the funds needed to make the marine reserves a reality — at least not now.

While environmental groups lambasted California's recent decision to suspend the reserves program, this fiscal crisis actually gives the state an opportunity to move towards a more effective long-term solution that stresses the cooperation of traditional foes — fisherman, both commercial and recreational, and environmental advocates.

California's Marine Life legislation takes an unimaginative, typically unsuccessful approach to protecting marine resources; it assumes that fishing and fishermen are the problem, and attempts to either bar them from large areas or to change their behavior through command and control regulations and restrictions instead of cooperative efforts. In other parts of the world, however, where the rights to harvest fish are more secure, it is the fishermen themselves who press for conservation measures and who often even create their own marine reserves.

Marine reserves certainly offer great promise as one piece of California's marine management puzzle. Numerous studies have shown that at least within the boundaries of marine reserves, marine life is more plentiful and diverse.

Jim Bohnsack, one of the leading marine reserve scientists at the National Marine Fisheries Service, has described reserves as "civilizing the oceans" by "putting fences in the oceans." And he's definitely on to something — good fences do make good neighbors. But the picture is incomplete and California's solution misdirected as long as it remains unclear who has the right to fish, and where.

The greatest threat to the oceans is what is referred to as the "the tragedy of the commons," when the race goes to the swift fisherman, all commercial fishermen have little choice but to deplete the seas because any fish they leave behind will simply be caught be someone else, rather than left to grow and reproduce for another year.

Marine reserves don't solve this key part of the crisis; they simply force fishermen to relocate. And the problem is frequently compounded by state or federal regulations that attempt to restrict fishing, but fail to address the reasons fish are over-harvested in the first place.

Other states and countries have successfully tackled this dilemma by creating tradable fishing rights. These tradable rights establish who has the right to catch fish, and how much they can catch (normally a percentage of an annual, scientifically determined, total catch).

In New Zealand , rights to fish are the equivalent of certifiable property rights. Their system has spawned the growth of innovative quota-owning management groups that invest heavily in fisheries science and enhancement. The management groups also tend to fish conservatively, leaving fish to repopulate the seas, because they recognize healthy oceans are a valuable asset.

The cooperative effort in New Zealand is in stark contrast to environmental efforts here.

In California, one species of rockfish, the bocaccio, may be a candidate for endangered species listing. When officials in California began a state-wide closure of the bocaccio fishery, fishermen were outraged. In a Los Angeles Times article about the fishery closures last summer, one Central California fisherman declared that "There's plenty of fish out there — The problem is, there's even more regulators." When the system of fishing rights was created in New Zealand, on the other hand, fishermen immediately criticized the government for actually setting some catch limits too high.

Marine reserves are only as effective as the respect given to their boundaries. The more financial hardships commercial fishermen endure, however, the more likely they are to skirt regulations, including restrictions on where they can and can't fish. The current system encourages cheating by making it difficult for fishermen to make a living. Healthy fisheries would also mean lower enforcement costs for the state, as fishermen will become more self-enforcing as they become more profitable.

Once the boundaries of marine reserves and fishing areas are well established, ocean advocates of all stripes are far more likely to act like good neighbors instead of fighting over the scraps. And seafood lovers around the state might finally see an increase in the supply of such delectable local fish as snapper, rockfish, Petrale sole, starry flounder, and sand dabs.

Michael De Alessi is director of natural resource policy at Reason Foundation

Processor Quotas Threaten Individual Fishing Quotas

info@reason.org (Michael De Alessi) info@reason.org (Donald R. Leal) — Tue, 30 Dec 2003 00:00:00 EST

Anchorage Daily News

In politics, good and bad policies too often get rolled into one. Such is the case with Alaska crab fisheries. Alaska Sen. Ted Stevens is backing individual fishing quotas for crabbers — a good policy — but forcing them to sell most of their catch to a small group of established processors — a bad policy.

This will hurt not only Alaska and West Coast crabbers who ply the waters of Alaska but other fishermen as well. All along the West Coast, fishermen who go after bottom fish such as Dover sole and sablefish are in desperate need of IFQs to bring back their fisheries — but not at the daunting price of a very limited market to sell their fish. Yet this is what the powerful senator is offering crabbers — and it could set a chilling precedent.

Stevens has offered his deal to crabbers as a rider to the omnibus appropriations bill that Congress must approve by Jan. 31. It comes when Alaska's crab fisheries and many other fisheries are in dire straits. Traditional approaches to managing U.S. fisheries — shortened seasons, restrictions on vessels and gear, and closed areas — have not stopped the buildup of excess capacity and overfishing in at least a third of commercially fished stocks in U.S. waters. And they often result in a dangerous race for fish, as Alaska crabbers can attest.

IFQs stop the race for fish by assigning individual fishermen specific shares of the total allowable catch set each season by managers. With IFQs each fisherman knows his or her allotted catch, so there is no need to race other fishermen for a share. In addition, managers can extend seasons beyond the four- to six-day openings common in Alaska crab fisheries since they know that the overall catch is capped by limits on individual catches.

An illustration of the effectiveness of IFQs is Alaska's halibut fishery. In the early 1990s, halibut fishermen were limited to fishing during just three 24-hour fishing openings a year. Not only did profits fall and most of the catch have to be frozen, but halibut fishermen had to fish in bad weather, resulting in loss of life. When IFQs were adopted in 1995, fishery managers extended the season to 245 days. Fishing became more profitable and safer.

Indeed, studies of fisheries in New Zealand, Iceland, Australia and Canada show that those with IFQs register higher profits, better stock management, less bycatch, improved safety and greater cooperation with government officials than traditional regulatory regimes.

Unfortunately, only four federal fisheries in the United States use IFQs today. The last time the Magnuson-Stevens Act (the nation's over-arching fishery legislation) was reauthorized, a temporary moratorium was imposed on new IFQs. The moratorium has expired, but politics have prevented more IFQs.

This situation is especially unfortunate for Alaska crab fishermen, who participate in one of the world's most dangerous fisheries. Short seasons increase the danger by limiting options for fishermen in deciding when to fish. But IFQs will allow managers to extend seasons so crab fishermen can fish during safer weather.

For Stevens, there is another issue — how to compensate processors who invested in plant capacity to meet the needs of short fishing seasons. If IFQs are implemented and seasons extended, some processors will have lots of excess capacity (like extra freezer space) and less control over prices because fishermen will be able to choose when to fish. The rider would allow crab fishermen to have IFQs, but they will have to deliver 90 percent of their catch to a handful of processors.

This rider has drawn protests. The Justice Department argues that it is anti-competitive and would not stand up to antitrust law. And Sens. John McCain, R-Ariz., and Olympia Snowe, R-Maine, have criticized Stevens for attaching a precedent-setting policy issue to an appropriations bill.

Surely, better options — like a stranded capital buyout program or simply including processors in the allocation of IFQs — exist for compensating processors who were steered by flawed government policy to invest in redundant capacity. Let's save IFQs.

Donald R. Leal is a senior associate of the Property and Environment Research Center

Michael De Alessi is director of natural resource policy at Reason Foundation

Endangered Species Act Turns 30

info@reason.org (Michael De Alessi) — Fri, 26 Dec 2003 00:00:00 EST

Washington Times

On Dec. 28, the Endangered Species Act (ESA) turns 30. But before celebrating the grand anniversary of this landmark federal legislation, we should ask ourselves a sobering question. What has the ESA really accomplished in the past three decades?

The answer gives little cause for celebration.

For starters, the ESA has done precious little to help endangered animals. Since the act's passage, seven American species have gone extinct. Meanwhile, while more than 1,260 species have been listed as "endangered" or "threatened," only 10 North American species have "recovered," often due to efforts unrelated to the ESA.

Even worse, the ESA has often backfired, prompting needless destruction of wildlife habitat as it expanded from its initial mission of helping endangered species to blocking economic activity across the country.

Based on the assumption that species are threatened as "a consequence of economic growth and development," the ESA gives the authority to limit activities on both public and private land. This loggerheaded notion — that conservation and commerce are incompatible — has dominated the application of ESA since it was passed in 1973.

Indeed, in ESA's first year, a tiny fish called the snail darter was discovered in an area that would be flooded by a dam being built on the Little Tennessee River. A lawsuit was promptly filed, halting construction. Eventually, a special congressional dispensation let the nearly completed dam go forward, but the case left little doubt about the strict-enforcement power of the ESA.

ESA restrictions create a perverse incentive that has led landowners to destroy habitat that might one day provide an attractive home for endangered species. For example, a study by economists Dean Lueck and Jeffrey Michael found that owners of forests that would evolve into endangered red-cockaded woodpecker habitat (they prefer old-growth trees) tend to cut their trees ahead of schedule to avoid attracting the birds.

Because more than 700 endangered or threatened species are found on private land, meaningful conservation will clearly require the cooperation of private landowners. The ESA finally recognized the problems it creates with the establishment of the Safe Harbor program, which indemnifies landowners who don't already have endangered species on their land from further restrictions.

The Safe Harbor program does begin to address the fact that endangered species on private land are a liability. But reducing liability isn't enough. To really turn around endangered species conservation, landowners need to view endangered species as assets.

Over the past 30 years, there have been many successful examples of private and public-private efforts to save wildlife. A new-and-improved Endangered Species Act could be modeled � at least partially � on any number of them.

One particularly successful example is Earth Sanctuaries Ltd. (ESL), an eco-tourism company in Australia. ESL was founded in 1988 by John Wamsley, who was alarmed by Australia's high number of animal extinctions. Under Mr. Wamsley's guidance, ESL bought land and built fences to protect threatened animals.

ESL has since successfully brought back numerous populations of native species � including wombats, bandicoots, kangaroos and platypuses. An essential part of their efforts to raise the capital they need to save species is a new accounting rule in Australia that makes it possible to report wildlife as regenerating financial assets. ESL is also the first publicly traded conservation company in the world.

The ESL example shows that committed and informed landowners, often in their own interests, can help restore threatened species. In the United States, there have also been remarkable experiments showing that private individuals are not, by nature, the scourge of endangered animals.

The nonprofit Peregrine Fund has shown how privately run organizations can work harmoniously with government agencies. The fund reintroduced the California condor to Arizona in cooperation with the U.S. Fish and Wildlife Service and the Bureau of Land Management, among others. The fund has also had significant success saving peregrine falcons, bald eagles and Mauritius kestrels.

Even the American bison benefited from private initiative when a small group of ranchers took some of the few remaining bison off the open range, where they were being slaughtered indiscriminately. From a low of fewer than 1,000, there are now as many as 350,000 bison in North America, according to the National Buffalo Association.

In all of these remarkable examples of private-sector conservation, success was not gained by coercion or lawsuits, but by taking advantage of natural market forces.

Over the last 30 years, the ESA has surely produced far more lawsuits and headaches than species recoveries. It's time to follow the more successful examples of the private sector and consign this legislative dinosaur to extinction.

Michael De Alessi is director of natural resource policy at Reason Foundation

Protecting People and Pachyderms

info@reason.org (Michael De Alessi) — Fri, 05 Dec 2003 00:00:00 EST

Last month's announcement that some Southern African nations will be allowed limited sales of elephant ivory may well evoke anachronistic images of gruff, mustachioed colonials from the heydays of hunting. In 2002, however, nothing could be further from the truth. The reality is that combining conservation and commerce offers the greatest hope for improving the lot of both people and wildlife. The move could herald the future of conservation, where prohibitions on trade in wildlife are replaced with positive incentives for species and habitat conservation, which are far more likely to benefit help both people and animals.

The limited ivory sales were bolstered by the unexpected support of the United States, which has traditionally been one of the staunchest opponents of any and all international trade in elephant ivory. This surprise move took place at November's meeting of the UN-sponsored Convention on International Trade in Endangered Species (CITES) in Santiago, Chile. Though the European Parliament passed a resolution urging its CITES negotiators to reject the African proposals, they abstained from voting against a largely unified African front that supported the ivory proposals.

Specifically, Botswana, Namibia and South Africa will be allowed one-off ivory sales of 20 metric tons (mt), 10mt, and 30mt respectively. This is the second time that CITES has permitted such a one-off sale. In 1999, Botswana, Namibia and Zimbabwe sold almost 50 metric tons of ivory to Japan for about $5 million.

The CITES treaty has been around since 1973, but its only real success has been moral conviction, and it is best known for its longstanding ban on international sales of ivory.

When the ban on elephants was first passed in 1989, it did succeed in reducing the demand for ivory in Western countries, but not in Asia. This measure has grown increasingly controversial as southern African states with growing elephant populations and rampant poverty have sought revenues from their stockpiles of elephant ivory (mostly from natural deaths or conservation-minded culls) to plow back into conservation and rural development.

Of course, some revenues have also flowed into corruption, but corruption has also fueled the anti-trade policies of other African countries, most notably Kenya, whose position can be explained by its longstanding attempts to separate people and wildlife (a near-impossibility it the developing world), and, of course, the international aid money it receives for its anti-ivory stance.

Ironically, by succeeding in the West, the ivory ban failed in a different manner. CITES is based on the premise that destroying the economic value of species will aid in their survival. Despite much evidence to the contrary, NGOs, Kenya and wealthy Western countries like the U.S. and Europe have promoted this view. But nothing could be further from the truth, especially in the poor countries where many of the world's endangered species live. In developing countries, species who do not pay their way will be quickly replaced by something else that does, such as agricultural crops.

Even if CITES could succeed in destroying the positive value of elephants, then all that would be left would be their negative value. Poor Africans most often bear the brunt of Western conservation initiatives, which focus on protecting the elephants rather than elephant habitat, a far more important factor in ensuring elephant survival. Consequently, elephants are often viewed as a real nuisance to people, trampling crops and humans, knocking houses over, and generally wreaking havoc.

The idea that wildlife will be better off without any economic value may have some merit in a National Park setting, but on communal lands or on private property it has the opposite effect to the stated goal of species survival. This points to another fatal flaw of CITES. The best hope for the protection of wildlife, and especially endangered species, is the alleviation of poverty and the reform of domestic institutions that have encouraged poaching and habitat conversion — an area that CITES has no real jurisdiction over.

Some CITES officials have started to recognize the importance of making life better for both people and wildlife. "CITES seeks to promote a healthier and more sustainable relationship between people and wildlife," said CITES Secretary-General Willem Wijnstekers. Just how it will accomplish this is unclear, since CITES' trade bans will only succeed when there is a wall between people and wildlife.

A number of southern African countries have moved in recent years to tear down some of those walls by devolving control over wildlife to local, rural communities. The idea is to recognize that people will protect and conserve what they value. Despite corruption ranging on a scale from petty to Robert Mugabe, it has been a tremendous step in the right direction. Community conservation programs have led to fierce local protection of wildlife, and the view that wildlife habitat -has value far beyond simply being potential farmland.

While the move to support the limited sale of ivory is a welcome one, it remains to be seen whether there has really been any sea change in policy. After all, ivory imports into the United States will continue to be prohibited under both the Endangered Species Act and the African Elephant Conservation Act.

Still, the move could be the first step towards an acknowledgement that trade bans work to the detriment of elephants and other species, and that conservation based on incentives, decentralization, and ownership is better for both people and elephants.

Michael De Alessi is director of natural resource policy at Reason Foundation

Removing Muck with Markets

info@reason.org (Michael De Alessi) — Fri, 01 Aug 2003 00:00:00 EDT

Overview

Regulatory restrictions on nutrient and suspended solid pollution have improved water quality in most U.S. watersheds. But many watersheds still suffer from poor water quality. A good example is Wisconsin’s Fox- Wolf River Basin where poor water quality remains a problem, especially due to phosphorus loading. Most of the gains in water quality have come from point-source reductions, which have now reached the stage of diminished returns and increased costs. Nevertheless, reducing point-source loads continues to be the target for stricter regulation. Market mechanisms to allow trading underneath a cap for both point and nonpoint sources offer a promising avenue to further and more practical improvements in water quality in the nation’s watersheds. The Fox- Wolf River Basin provides a good case study.

Saving Endangered Species Privately

info@reason.org (Michael De Alessi) — Fri, 01 Aug 2003 00:00:00 EDT

Executive Summary

Australia has one of the worst records of mammalian extinction in the world, in large part because so many of its species evolved in isolation and were not well-equipped to deal with the introduced species that came with European settlement. In recent years, however, a focus on feral eradication and on protection of native species in feral-proof enclosures or sanctuaries has started to reverse this trend.

Earth Sanctuaries, Ltd., a private company in Australia, has been at the forefront of this type of protection. It has played a significant role in the recovery of many species. This study explains the history of Earth Sanctuaries, particularly the successes and challenges it has faced in trying to save species through commercialization. Following recent financial difficulties, the company is now a leaner, more focused operation. And Australia’s wildlife is all the better for it.

23 species extinctions have occurred in Australia in the last 200 years, more than any other continent.
It has been estimated that since European settlement began two centuries ago, 90 percent of Australia’s native vegetation in the Eastern, temperate regions of Australia, and more than one-third of all of Australia’s forests and woodlands, have been removed by human habitation and activity.
Introduced cats, foxes, and rabbits have long been blamed for the extinction of numerous species in Australia. But with the creation of Earth Sanctuaries, Ltd. (ESL), conservation strategies began to focus on eradication rather than control.
ESL pioneered the use of feral-proof fencing to demonstrate that small native mammals could recover if all non-native predators and competitors were removed.
Since its inception in 1985, ESL has dramatically raised the awareness of the plight of Australia’s mammals and the threat posed by non-native species. Based on ESL’s success, national parks and conservation areas, especially in Western Australia, have changed the way they operate their reserves.
At ESL's Warrawong Sanctuary, numbers of Australia’s smallest and rarest kangaroo, the woylie, have increased 200-fold; the population of Australia’s most primitive kangaroo, the long-nosed potoroo, increased from four to more than 100; and the Sydney subspecies of the red-necked pademelon, believed to be the last colony of this subspecies in the world, increased from just two to more than 50.
At its peak of land ownership, ESL owned 10 sanctuaries covering more than 90,000 hectares.
On May 8, 2000, Earth Sanctuaries, Ltd. was listed on the Australian Stock Exchange (ASX code: ESL). This public offering raised A$12 million, increased the number of shareholders to almost 7,000, and allowed Earth Sanctuaries to proudly declare itself the first publicly traded company whose core business is conservation.
Valuing ESL as a company is difficult. One of its greatest assets – endangered and threatened species – cannot be legally traded, and therefore valued, in the marketplace.
Since shortly after ESL’s initial public share offering at A$2.50, the share price declined and hovered around 20 cents, forcing ESL to restructure.
ESL's restructuring only reinforces the point that markets have tremendous power to conserve resources. ESL has emerged a leaner and more focused operation. In contrast, little has changed at Yellowstone National Park – the world's oldest and most famous national park – since severe mismanagement resulted in devastating fires in 1988.
Conservation and commerce are not mutually exclusive – in fact, they are inextricably linked.

Precautionary Principle a Risky Gambit

info@reason.org (Michael De Alessi) — Wed, 16 Jul 2003 00:00:00 EDT

San Francisco Chronicle

The recently passed Precautionary Principle ordinance purports to make San Francisco a leader by "challenging traditional assumptions about risk management." In truth, it will likely be bad for the city, public health and the environment.

The precautionary principle is routinely described as "better safe than sorry." Risk reduction is a laudable goal, but only when weighed against the risks of not taking certain actions. The trick is balancing the two. The city needs a policy of risk management and mitigation, not a mandate for the elimination of risk, which is simply impossible.

The ordinance mandates "selection of the alternative that presents the least potential threat to human health." But what if the least riskiest option also confers the least benefit? Although it has now been added (but only once), the word "benefit" did not appear in the original ordinance. San Franciscans should know better.

AIDS activists here have had to fight the FDA tooth and nail over drug approvals because the FDA believes potential risks outweigh potential benefits.

That is, the FDA practices the precautionary principle.

Of course, many chemicals pose health risks, and we should do everything we can to lessen their impact on our lives and to find alternatives. But not at the expense of inferior alternatives that result in greater harm to human health or the environment. Activists have targeted genetically modified organisms because they carry an uncertain risk. But many of those organisms drastically reduce pesticide use, a good thing by the activists' own standards.

Here's how Chronicle columnist Ruth Rosen described the Precautionary Principle ordinance ("Better safe than sorry," June 19): "When science cannot yet fully establish a cause-and-effect relationship, but can provide reasonable evidence of harm, this principle urges us to take precautionary measures. In other words, if we wait until we're absolutely certain, we've probably waited too long."

It sounds just as reasonable to say: "When science cannot yet fully establish a cause-and-effect relationship, but can provide reasonable evidence of benefit, this principle urges us to act." In fact, both approaches are meaningless unless risk and benefit, including cost, are taken into account.

San Francisco is a dangerous place to cross the street, yet thousands of people do it every day. Applying the precautionary principle, however, pedestrians would have to be certain that no car loomed around the corner. They would never get out the front door.

Obviously, there are different scales of risks. It is more dangerous to cross 19th Avenue at rush hour than a secluded cul-de-sac at lunchtime. But if all risk is unacceptable, as it is for proponents of the precautionary principle, both would be treated the same way, which is irrational.

Perhaps the most infamous example of risk reduction at all costs occurred in Peru in 1991. After a U.S. EPA study found evidence of an increase in cancer risk from a chlorine byproduct, officials in Peru stopped using chlorine to disinfect drinking water, resulting in a widespread cholera outbreak that killed thousands. Innumerable cases show that the elimination of "dangerous" risks would result in a lower standard of health and well-being.

By setting an unattainable benchmark, San Francisco's Precautionary Principle ordinance has no way to measure success. To be truly on the cutting edge of risk management, the city should institute some performance measures that take risk, benefit and cost into account. The goal should not be risk reduction alone but a net improvement in human health and safety.

In these days of cash-strapped cities and states, we need the maximum benefit possible. That means scientifically rigorous assessments of risk that consider whatever means are available to improve health and environmental safety.

Michael De Alessi is director of natural resource policy at Reason Foundation

One Fish, Two Fish, You Fish, I Fish

info@reason.org (Michael De Alessi) — Tue, 01 Jul 2003 15:52:00 EDT

Fraser Forum

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Earth Day

info@reason.org (Michael De Alessi) — Tue, 22 Apr 2003 00:00:00 EDT

Earth Day should be a time to leave last week's tax headaches behind us and to celebrate our natural environment. Instead, many environmental activists lament our failings and cry for more government support. With a nationally down economy and California in the throes of a $35-billion budget crisis (more than the combined budgets of 26 other states), however, those cries are likely to fall on deaf ears. Instead, services will be cut, fees will rise, and the environment will surely get short shrift.

That said, every problem is an opportunity, and California could become a national leader in environmental innovation. All it has to do is to modify the rules of the environmental regulation game to encourage environmental stewardship and private conservation.

California is often on the leading edge of the country. Our high-tech industry is second to none, we entertain the world, and are the nation's Winter breadbasket. Unfortunately, we are also often on the leading edge of costly regulation, such as the recently abandoned electric car mandate, which stifles innovation and entrepreneurship.

California's greatest asset is human ingenuity. While Silicon Valley taps into it, politics subverts it — but that same ingenuity and resourcefulness is the key to solving our environmental hurdles. The reason we haven't started solving them already is simple — politics.

Polluters should pay and natural resources should be conserved, but regulators have lost sight of their environmental aims and focused instead on inputs and processes. For example, while the city of Napa develops its riverfront, the county of Napa considers protecting streams by imposing a one hundred foot setback that could ruin many property owners and viticulturists. The stated goal is water quality, but the performance measure is a blanket application of an unproven setback. If the county is successful, property rights will be weakened, tempers will flare, and vast expense will be incurred in a process unrelated to where the most environmental good can be done.

The California Coastal Commission is in court due to it's rejection of an entrepreneurial nonprofit's plan to enhance kelp beds in Southern California. Is the greatest sin of this kelp reforester environmental? Hardly — it's all about the Commission's permitting process itself, which even the U.S. Supreme Court has called "a plan of extortion." Recent reform efforts in Sacramento, however, have ignored the environmental performance of the Commission, focusing instead on the political appointment process.

The U.S. Interior department recently started ratcheting down California's taps from the Colorado River because a deal couldn't be reached on a water transfer from the Imperial Valley to San Diego. Why? Not because the transfer was a bad idea, but because the water rights in question were held in trust by a political body (the Imperial Irrigation District). Farming cooperatives elsewhere have found innovative ways to sell water and keep farming, but not in Imperial — water rights are tenuous, so it's a knock down political fight.

Water policy in California is additionally handicapped because state water law limits the legitimate "uses" of water rights. This makes it difficult, if not impossible, for private groups to allocate water for environmental purposes. If private water rights were stronger, as they are in Oregon, farmers and environmentalists could use water markets to ensure healthy instream flows and healthy agriculture. Instead, we grow monsoon crops in the dessert and send the Salton Sea ever closer to a hyper-saline death.

One of the great demonstrations how human ingenuity affects conservation comes from an Alaskan fishery. Some years ago the state fishery managers decided that the catch of halibut was too large, so they made the season shorter. Before long, what had been an almost ten month season was down to 48 hours — with no real decline in catches. If human ingenuity is applied to getting around a restriction, it will probably succeed. Alaska solved the problem by making fishing rights stronger, so that there was no longer a race to fish. New Zealand has done the same thing, and now that fishers own the fishery, their incentives are completely different. They have lowered their catches on their own, and they pay for their own research and monitoring. The fishery is better managed, the environment is better monitored, and the state spends less on the fishery.

As a nation and as a state, we rely far too heavily on governments at all levels to protect our environment. Instead, we need to tap into that entrepreneurial spirit that has defined our state.

Michael De Alessi is director of natural resource policy at Reason Foundation

Arrogant and Corrupt

info@reason.org (Michael De Alessi) — Sat, 05 Apr 2003 00:00:00 EST

Long Beach Press Telegram

In the 30 years since its creation, the California Coastal Commission has played an important role in protecting the coast, limiting offshore oil and gas exploration, enforcing public access to ocean beaches, and restricting coastal development. But in the process it has been contentious, arbitrary, arrogant, corrupt, and often ignored property rights.

The California Appeals Court recently declared the commission unconstitutional due to its exposure to political influence. As a cosmetic fix to the court's decision, Gov. Gray Davis signed a hurried bill creating four-year fixed terms for legislative appointees to the commission.

That isn't a solution. Lawsuits will continue and more importantly, the commission is still in desperate need of a complete overhaul.

A 1987 U.S. Supreme Court ruling against the Coastal Commission described its demands for land in exchange for permits as an out-and-out plan of extortion. In 1992, former Commissioner Mark Nathanson was convicted for soliciting bribes in exchange for coastal building permits. And just last October, the San Francisco Chronicle reported that Gov. Davis' re-election campaign received $8.3 million from donors with business before the Coastal Commission, most of whom got their permits approved shortly thereafter.

The latest case against the commission arises over a marine environmentalist group's plan to create kelp beds on the sandy ocean bottom using durable, recycled materials. Rodolphe Streichenberger, a French researcher, developed the plan with the help of the late Wheeler North, a CalTech marine biologist who specialized in replenishing depleted kelp forests.

Kelp forests are havens of biodiversity, great for countless species and a huge benefit to the overall health of our oceans. They are also in serious decline, according to the California Department of Fish and Game, especially in Southern California.

Recognizing the vast environmental benefits of kelp forests, Newport Beach officials approved the Marine Forest reef project and the site was leased from the Department of Fish and Game. Despite Newport's enthusiasm, the Coastal Commission deemed the reef unpermitted development, and refused to issue a retroactive permit. Detractors claimed it was simply an excuse for ocean dumping but the marine life is there for all to see (although by mandate there is now no maintenance of the reef), and a simple dumping plan would hardly merit the designs of a Cal-Tech biologist.

As with everything it does, the commission's problem with the Marine Forest project has more to do with jurisdiction and procedure than environmental effects. There are scientific, ecological questions that need to be asked, such as how reefs affect species composition, how durable the reefs are, and how they affect water quality, but these questions need to be asked in a less politically charged environment.

Peter Douglas, the Coastal Commission's most prominent employee, recently wrote, "The coast is never finally saved. It is always being saved."

He is right, but only because conservation and politics remain inextricably intertwined. The Nature Conservancy learned this long ago, which is why it originally turned to private conservation and respect for property rights to improve environmental quality.

Other states such as Alabama have experimented with privately built artificial reefs, and as a result, Alabama has seen a dramatic increase in offshore productivity. The Coastal Commission, on the other hand, has squashed any private innovators that have come its way.

The first target of the newly created commission in the early 1970s was the Sea Ranch, a visionary private development in northern Sonoma complete with its own set of even by today's standards onerous building restrictions aimed at environmental sensitivity. By the time the commission was through with them, however, they could no longer afford those covenants and their vision was compromised.

If Gov. Davis and the Legislature are serious about improving the Coastal Commission, all appointments should be made by the governor and be subject to review by the Legislature. Performance measures, such as coastal acreage developed and marine pollutants reduced, should be adopted so that the commission's mission is clear, and its predilection for granting favors to the well-connected limited.

Above all, entrepreneurs should be encouraged rather than discouraged from finding innovative solutions to environmental problems. With a restructured Coastal Commission, the state would reap the numerous benefits of a patchwork of biodiversity kelp forests and other environmentally sensitive developments that would actually improve the current condition of our coast.

Michael De Alessi is director of natural resource policy at Reason Foundation

Elephants, Markets, and Mandates

info@reason.org (Michael De Alessi) — Tue, 01 Apr 2003 15:59:00 EST

Fraser Forum

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Politics As Usual Blocks Water Deal

info@reason.org (Michael De Alessi) — Wed, 11 Dec 2002 00:00:00 EST

San Diego Union-Tribune

Officials in the farming community of Imperial County rejected a deal to transfer water to San Diego, invoking a federal mandate that could throw water usage from Sacramento to San Diego into disarray.

Why would farmers turn down a deal that would pay them $258 per acre foot for water that they basically get for free? And now what?

The Imperial Irrigation District voted 3-2 to reject a proposal to reduce their water usage and sell their excess water to San Diego. The Bush administration says it will cut off California's overindulgence from the Colorado River on Jan. 1, but there is not a water crisis � in the short-term. San Diego has plenty of water in reserve, and Dennis Cushman of the San Diego County Water Authority tells the Union-Tribune that they have enough water to get through at least 2003 � meaning there's still time to work out a new deal.

But what does Imperial Valley want?

The actions of the Imperial Irrigation District (IID) are often described in news reports as the actions of 'the farmers,' but nothing could be further from the truth. The IID acts as the trustee for the water rights of the farmers, but because it is elected at large, it has a very different bottom line than the farming community � that is, getting elected by distributing as much of Imperial's water wealth as broadly throughout the community as possible. And so, their decisions play well in Imperial among just about everyone but the farmers. Witness the creation a few months ago of the Imperial Valley Water Users Association, a contentious move by the farmers to try and gain more control over the process.

Farmers in Imperial Valley pay about $15 an acre foot for the water they use, but even so, profits are thin and fallowing is a normal part of the farming business. It is hard to imagine the farmers themselves invoking such acrimonious opposition to the plan that was just rejected. The discarded proposal offered payments of $258 an acre foot (over 17 times what farmers pay for the water), and even higher payments for land that is fallowed.

Gov. Gray Davis and Sen. Dianne Feinstein have both previously threatened to commandeer water from Imperial Valley if necessary. But, the IID seems intent on standing firm and playing its political cards. Upon rejecting the transfer deal, IID board member Stella Mendoza said, "If you push me around, I'll push back."

If a new deal isn't reached quickly, endless court battles loom on the horizon. The big cities � San Diego and Los Angeles � are too politically powerful not to get their water one way or the other. If, or more realistically when, the IID loses in court, the precedent will be set for the coastal cities to simply expropriate the water that they need, regardless of the effects on agriculture and the environment. This would be a terrible loss.

Farmers and environmentalists in other Western States such as Oregon are using water markets to forge agreements that are good for both farming and wildlife. California should start working its way toward the same objective � or else we'll never see the end of the water wars.

Reaching a deal that also results in stronger water rights is crucial for the health and well being of the state. San Diego and other major cities deserve to get their water, but not at the expense of farming and wildlife. The surest way to provide for allotments of water to all three of those uses is to free up water markets by de-politicizing water rights and vesting them with agricultural and environmental interests.

Environmentalists want to protect the Salton Sea, a sanctuary for hundreds of species of birds. The rejected deal ensured that flows into the sea would not decrease for at least 15 years, allowing more time to solve the ever-increasing salinity problems faced by the sea.

Farmers believe it is their water and they should be compensated. This deal was going to pay $258 per acre foot � pretty fair.

Imperial Valley politicians want to protect the region's economy. This deal was going to provide millions to subsidize the valley.

San Diego and Los Angeles need water and are willing to pay for it.

Clearly, reaching a deal isn't as complicated as the IID makes it out to be. So what's the holdup? Local politics in Imperial Valley. San Diego will get its water. But if the Imperial Irrigation District doesn't offer up a solution — and fast — they'll have no one to blame but themselves when Imperial Valley gets the really short-end of the divining rod.

Michael De Alessi is director of natural resource policy at Reason Foundation

Far From Perfect Deal for San Diego

info@reason.org (Michael De Alessi) — Mon, 18 Nov 2002 00:00:00 EST

San Diego Union-Tribune

After more than a year of negotiations, officials have finally reached an agreement to transfer water from the Imperial Valley to San Diego County. That means San Diegans likely won't see their own version of Denver's "sod patrols" monitoring how lawns are watered.

Then again, the issue was never about how much water the typical Southern Californian uses in a day (a number that has actually dropped from 205 gallons per person in 1980 to 170 today). This was about water rights, money and the Salton Sea — and this deal really only solves the money issue — for now. Some environmentalists, out to protect the Salton Sea, a salt lake that is crucial to the survival of hundreds of species of birds, have already sued the federal government to stop a transfer they argue could further threaten the sea and may launch additional lawsuits now. Not all the farmers in Imperial Valley will be happy with the terms of the agreement. And the overall question of water rights remains unanswered.

In the West, water rights are often staked out on a first-come, first-serve basis. Farmers in Imperial Valley staked their claim to water from the Colorado River long before metropolitan Southern California, but they also understood that political pressure to share the water was mounting, so they tried to make a deal. The deal that was made in 1998 was very different from the one just arrived at, where in exchange for idling 20,000 acres of land, Imperial Valley will get $10 million from San Diego to help ease the socio-economic impacts on the region and another $10 million spread out over the next 20 years. The Valley will also receive $258 for every acre-foot of water that it transfers to San Diego — and maybe most importantly will not be held liable for the ultimate fate of the Salton Sea. The deal caps Imperial Valley's liability for damage to the Salton Sea at $30 million.

Environmentalists and farmers know that the Salton Sea is already in dismal shape. It is saltier than the Pacific Ocean, and the money required to save it is astronomical — an estimated $1 billion. Farmers didn't want to be on the hook for bills to repair the Sea and now they won't be. The question remains, who will bear the cost? Taxpayers?

The overlying question of water rights also remains unanswered. Should cities take priority over farming communities simply because their higher populations ensure they will have more political clout? Weak water rights are one reason the transfer agreement has been so bitter so far — where rights are unclear, politics enters the fray and confusion ensues. If rights are not better specified, the bitter, yearlong fight over this transfer will be oft-repeated in California and in the several other Western states closely watching this process. With a better, more concrete definition of water rights, there would be a stronger ability to voluntarily move water where it is most needed, whether that means to cities like San Diego, or for environmental amenities like the Salton Sea.

"We feel magnificent about it, this is a boost not only to the San Diego region, but to California as a whole and will set the tone for future water policy and negotiations," said Dennis Cushman, assistant general manager for the San Diego County Water Authority.

He's right. This agreement is good for San Diego in that it averts the threat of a water shortage for the time being. But in terms of overall water policy this agreement leaves more questions than answers. Farmers and environmentalists can still hold up the transfer, perhaps indefinitely if they all wind up in court. On the other hand, if Imperial Valley farmers and environmentalists joined forces to back stronger and more broadly defined water rights, they could reap mutually beneficial rewards. Together they could dictate some of the terms of the transfer to ensure that water is allocated for both agricultural and environmental benefit throughout the Imperial Valley.

The state, and the West, needs a system where the public interest manifests itself through voluntary exchanges of water, not prolonged political battles. In Oregon, for example, an expansion in the definition of "beneficial use" of water resulted in the creation of the Oregon Water Trust, which pays farmers and buys water rights to keep water in stream. What was once a bitter fight over water turned into a peaceful, voluntarily market for water and water rights. This deal doesn't do that. If and when water rights are more clearly defined, California's urban users will get water without onerous restrictions on when they can use it � but not at the expense of agriculture or the environment. In the meantime, see you in court.

Michael De Alessi is director of natural resource policy at Reason Foundation

Making People and Environment Better Off in India

info@reason.org (Michael De Alessi) — Tue, 24 Sep 2002 00:00:00 EDT

Tech Central Station

In many places around the world, the gains in environmental quality in the last few decades have been astounding. People are living longer, the air is cleaner, and agriculture is more productive, freeing up land for wildlife and forest growth. At the same time, however, many in the developing world continue to suffer from poverty and environmental degradation.

Conservation and development are inextricably linked - when people are poor the environment suffers, and when the environment is poor, people suffer - yet they are often viewed as diametrically opposed. One must sacrifice the environment for development, it is argued, or else it must be the other way around. While there are certainly examples of environmental degradation in the wake of development (think of the soot wafting around London at the dawn of the industrial age), this need not be the case, especially considering the clean technologies available today. In fact, development and the wealth that it generates may be the environment's best friends.

As Peruvian economist Hernando De Soto recently pointed out on TCS, free-market institutions - in particular the rule of law and clearly defined private property rights - offer the greatest hope for improving the lot of the world's poor by empowering them to use the capital already available to them to generate wealth and prosperity. These institutions are also the environment's best friend, for the same reasons. Once a resource becomes a legally recognized asset, people will tap into its value to both protect and enhance that resource, whether a farm or a forest.

A recent trip to India highlighted how important development will be to environmental quality and biodiversity in that country. India today is developing rapidly (it experienced 6.8 percent growth per annum from 1993 to 1997), but has slowed recently and still has a long way to go. For those concerned that the environment will suffer as a result of further development, consider that 70 percent of Indians today defecate in public, and many rural Indians rely on dung as a source of fuel. The faster India develops, the sooner sanitation and clean fuels will reach the average Indian. Can there be any doubt that 'wealthier is healthier'?

The impact of wealth on sanitation and air quality is easier to recognize that its impact on wildlife and biodiversity. There is no doubt that India's dense and growing population is increasing pressure on its natural environment. Environmental degradation and human/animal conflicts are common. But many people in India, and the world over, depend on the natural environment that surrounds them to sustain themselves, and hungry people will not hesitate to sacrifice the environment for development if they are forced to make that choice. The real question is how to find a way to make both people and the environment better off, and the answer lies in secure property rights.

Just as property rights are at the crux of wealth generation, they are also at the crux of environmental protection. If property rights are privately held, then an incentive exists to protect resources. In other words, it is the lack of private property rights - not development per se - that leads to environmental degradation. The reason that development and environment are often viewed in conflict is that property rights have so often been trampled by the state in the drive for development. Soot in London, for example, was only legalized by the subversion of private rights that had protected ordinary property owners from noxious pollution.

Fortunately, today's developing countries do not have to reinvent the wheel as technologies exist that would allow them to leapfrog the early industrial pollution of the United States and Britain. The question is how quickly they will be allowed to develop, which includes whether they will have the capital to invest in acquiring technology. A recent report by the McKinsey Global Institute concluded that "India's economy could be the fastest growing in the world - and the country's citizens twice as well off - if its policy makers embraced a deeper, faster process of economic reform." India's growth rate has slowed in recent years, but the McKinsey report predicts a growth rate of at least ten percent per annum "with certain reforms in product and land markets, along with accelerated privatization."

The size and scope of India's government is staggering. In a country of one billion people, there are only about 28 million salaried jobs, over seventy percent of which are in government. In addition, many government restrictions cause economic and environmental harm. Duties on automobiles, which are over 100% for domestic autos and much higher for imports, price out the average Indian and mean that older, dirtier cars remain in service. In addition, ownership of land is stuck in a legal morass - 90 percent of litigation in rural India concerns property disputes that can take decades to settle. Consequently, there is little investment in agricultural enhancement or new housing, despite India's growing population.

There is no doubt that Indians, and humans in general, are ingenious and adaptable when given something to work with. For example, because automobiles are so expensive, a common site outside of Agra in India is a form of transport truck driven by a water pump. It is just this kind of amazing ingenuity that is will make both people and the environment better off in places like India, if only legal and property reforms will allow it.

Michael De Alessi is director of natural resource policy at Reason Foundation