Despite the significant environmental gains of the past 25 years, there is a growing consensus that America's environmental laws are broken and need to be fixed. Those approaches that achieved initial gains in the 1970s are not as effective today, and are increasingly costly. It is often remarked that the Defense overpriced toilet seats are bargains compared to the costs of environmental improvements under existing law. Current environmental laws frustrate the development of cleaner technologies, penalize landowners for owning habitat, and fail to address the most significant environmental risks. Leaders in both political parties, industry, and even the environmental movement recognize the need for change.
The fundamental problem with existing environmental laws is that they embody a command-and-control, "Washington-knows-best" mentality (the addition of "market-oriented" bells and whistles on some programs notwithstanding). Washington sets environmental goals for the entire nation, and Washington largely determines how those goals are met. Almost invariably this has meant a reliance upon regulatory edicts to achieve environmental gains. This approach is tantamount to ecological central planning, and it is no more sustainable than its economic variant.
The reality is that the flaws in current environmental laws run deep, and mere tinkering at the edges will not solve the problem. What then, is the answer?
An alternative approach to environmental policy that is gaining adherents is "free market environmentalism." This approach rejects the idea that all good things environmental emanate from government dictates, and suggests that those institutions upon which free and prosperous societies are built - private property, voluntary exchange, freedom of contract, rule of law - will best provide for the protection of public health and ecological values.
The free market environmental outlook can best be summed up in the statement: Markets don't fail, we fail to have markets. Most of the world's ecological problems plague those resources that are left outside of market institutions. The depletion of ocean fisheries is a constant reminder that the tragedy of the commons is still with us, and that the open-access commons - not capitalism - is the source of unsustainable activities.
Where natural resources are incorporated into the marketplace, through property rights or some proxy, environmental improvements are regularly achieved. The world's temperate forests, largely privately owned, are stable and expanding; the world's tropical forests, largely unowned or "protected" by governments, are in decline. Similarly, the greatest wildlife conservation successes in the third world come not from bans and regulations, but from efforts to embrace market institutions and make conservation pay.
The first step in enacting a free market environmental program would thus involve efforts to creatively extend property arrangements to cover more of the natural world so that there are fewer open-access commons and more private stewards. Public ownership and protection have not done much for federal lands or endangered species (one-quarter of all delisted species went extinct, and most should never have been listed in the first place). On the other hand, private stewardship, as practiced by environmental organizations, local land trusts, clubs, community associations, and even the occasional corporation, has preserved habitat and ecosystems, and helped protect numerous species, including egrets, common eider and wood ducks, scimitar-horned oryx, bluebirds, American bison, and several raptor species, from threats to their survival. Rather than seeking more federal regulation, those committed to improved environmental protection should seek ways of building upon these successes.
Of course, there is more to environmental protection than protecting natural resources. Environmental protection also entails controlling pollution -- the forcible imposition of wastes or emissions onto another person or her property. Under the common law, pollution was judged to be a nuisance or trespass by common law standards. The government should prohibit pollution (so understood) and penalize those who harm others (or the property of others); the polluter should pay, just as should the vandal, assailant, or thief. It is as essential for property to be protected from private malfeasance as from excessive government regulation.
Current environmental laws, however, do not embody this principle. Federal air and water statutes are preoccupied with whether the proper technologies have been installed or whether the proper permits have been filed at the proper time with the proper agency. The U.S. Supreme Court once acknowledged a federal common law basis for water pollution actions by polluted parties downstream. Today, the federal Clean Water Act can preempt such claims, even where substantive allegations of harm exist. This is anti-private property and anti-market. To embody free market principles, environmental rules should be designed to replicate, or reinforce, common law environmental protections. They should not seek to micromanage the land-use of private citizens and the industrial practices of private corporations, as much federal environmental law does today.
Free market environmental approaches may not appear to be immediately applicable to all environmental problems overnight. After all, few such approaches have been tried. Yet it is important to establish core principles before seeking to implement policies, and free market environmentalism can serve as a measure against with proposed reforms can judged.
That said, where expanding stewardship and adopting common-law-style protections of property rights are not yet possible, environmental policy should embrace the principle of subsidiarity and seek to have each unresolved environmental concern addressed at that level of government - local, state, federal, international - most appropriate. This means that local concerns - waste sites, drinking water, and the like - should be left in the hands of local officials who are more prepared and better situated to handle them. Regional air quality problems should be handled by states or regional authorities, with the federal government acting primarily to resolve disputes or provide technical assistance. In the case of rivers and streams, it is amazing how much protection could result were those downstream able to take direct legal action against upstream polluters.
There is not space here to fully explain the free market environmental approach, but the principles behind such an approach should now be clear. Free market environmentalists place far more faith in private citizens, endowed with private rights, acting in defense of their own perceived best interests, than they do in government bureaucracies. Given the current performance of environmental laws, this should be understandable.
Property-based conservation strategies, such as those embraced by free market environmentalists, should be no stranger to environmentalists; it was referenced as a solution to the "tragedy of the commons" by Garrett Hardin in his seminal 1968 essay. Moreover, the American environmental movement grew out of a conservation movement that relied upon private property to protect habitat and preserve open spaces. What is odd is not that many Americans believe that private property and environmental protection go hand-in-hand, but that so many environmental activists do not.