Politicians generally think in government terms, assuming there is a government solution to every problem. But despite that inherent hubris, there is one law no government can ever repeal, or even substantively amend – the law of supply and demand. It has always been, and will always be, a fact of human nature, because people inevitably do what is in their own interest.
That has been the basis of human interaction since the beginning of time. One villager catches fish to sell to others, while another makes hooks to sell to fishermen. Both become successful, helping themselves, by helping others. The only way to make money in a free market is to supply others with something they want, and are willing to pay for. Government can never alter that essential motivation. Incentives drive human behavior, and if something isn’t working well, it is usually because the incentives are wrong.
I have long maintained that’s what wrong with government’s approach to modern environmental issues, an enforcement system based on expecting people to do what is clearly not in their own interests. That creates an adversarial and counterproductive relationship. The Endangered Species Act remains one of the best examples of backwards incentives. In 2010, the U.S. Fish and Wildlife Service was poised to take a fresh look at the problem under the leadership of a new Director, Sam Hamilton, but his life was tragically cut short. He had studied the problem throughout a 30-year career with that agency, and reached his now-famous conclusion, that “there is no mechanism for private landowners to benefit from investing in species conservation.” It is an almost-insurmountable problem, because the vast majority of species habitat is on private land. In numerous speeches, Hamilton said, “The incentives are wrong here. If a rare metal is on my property the value of my land goes up. But if a rare bird is on my property the value of my property goes down.”
A handful of environmental leaders advocate reversing those incentives, paying landowners to improve species habitat – instead of punishing them for not doing so. That was the founding principle of Montana’s Property and Environment Research Center (PERC), for example. I have often gone a step further, advocating paying landowners to raise the species themselves, in order to repopulate the natural habitat, just as states raise fish to restock lakes and rivers. If we paid ranchers, animal husbandry experts, to raise wolves, ferrets, or tortoises, we would soon have more than we knew what to do with.
Government agencies adamantly oppose that idea, pathologically unable to think outside the command-and-control box. They can scarcely even abide the idea of paying landowners to maintain habitat, much less possess, raise, and release endangered species.
That is especially true in the U.S., but elsewhere we see glimmers of the incentive approach. A program in Cambodia pays over 40 farmers in the Mekong Delta to grow native rice varieties to improve habitat for cranes. They have switched from jasmine, the aromatic rice that dominates world markets, to varieties that bring half the price and produce half the yields. These older varieties are shorter-grained and don’t soften when cooked, so people don’t like them as much. But cranes love them, so these farmers reserve part of the crop, unharvested, for the birds.
The program is intended to stop the decline of these majestic birds, paying farmers to make up for the lower prices they get for the older rice varieties. Sarus Cranes, the world’s tallest flying birds, grow up to six feet tall, with a wingspan of eight feet, and were once common throughout the Mekong Delta. Today only a couple hundred remain, partly because of the conversion to newer varieties of rice. In America, wildlife bureaucrats would declare private land to be “critical habitat” for the birds, and fine farmers who converted their fields. But in Cambodia, with government support, and funding from the International Union for Conservation of Nature in the Netherlands, they’re paying farmers, and thereby improving habitat. The predictable result is a noticeable increase in the number of cranes visiting the area, even in the program’s infancy.
With lower yields and prices, farmers make less money, so their commitment is tenuous. Long-term, incentives must be increased, or landowners cannot stick with it. Like their counterparts in the U.S. and everywhere, they must begin to see endangered species on their property as an asset. Then, the entire premise of species protection will be changed forever. And success will be in sight.
Comments on this entry are closed.