Free-market models and partnerships are increasingly producing better results for conservation than government intervention and over-regulation.
Making conservation financially beneficial rather than detrimental to private individuals and businesses is proving incredibly successful at incentivizing environmentally conscious practices. Numerous cases are being pioneered and reported, from taking on water scarcity problems in California by creating water trade systems, to saving endangered species through private reserves and funding reforestation with internet advertising. The Property and Environment Research Center, or PERC, has a term for such individuals who are boldly implementing private sector, free-market mechanisms in the environmental space: enviropreneurs.
One such incredible example of free-market models shaped towards environmental causes, Ecosia.org, showcases the ability that private sector services have to enact change when harnessed for the purposes of conservation. A German company, Ecosia.org is an online search engine that partners with Bing to obtain its searching technology. Like any other search engine, Ecosia receives income from advertisements, but unlike other search engines, 80% or more of Ecosia’s profits are put towards reforestation. To date, Ecosia has planted more than 30 million trees, and I am tickled to say that my own personal searches helped to fund approximately 1.8 trees out of that number. Such a simple, appealing, and straightforward model surely illustrates the potential for private sector environmental action.
A separate case in which a free-market mentality could outperform government action can be found in the work of AquaShares. Co-founder James Workman is championing a concept which could be applied in areas of the United States affected by water scarcity and offer a better incentive to conserve water than fines and rationing. His company AquaShares uses a few simple steps to establish a voluntary water utility market for communities.
AquaShares works with individuals and water utility companies to record the average water usage of participating households, and when a consumer uses less than their average, the gap is translated into a credit, or “share,” that can be traded. Other individuals who would like to use more water may compensate a neighbor for some of his or her shares. Once in place, it is essentially an online marketplace where everyday consumers can commoditize the water that they save and trade it to other members of their community through a system of standardized value.
James Workman points out an important result of this system: “Now if you use less [water] than that, you get rewarded for reducing your share.”
In a selection on the efforts of AquaShares and James Workmen, the PERC podcast Enviropreneurs at Work observes that policies which seek to “conserve water by imposing limitations on water use,” often result in an atmosphere that “pits neighbors against neighbors.” The recording goes onto to criticize such regulations as having “had little effect on the supply and demand,” declaring that “Mother Nature dealt us scarcity, and heavy-handed water policy has made it worse.”
Yet the conclusion reached is one of optimism: that hope can be found in a system proposed by AquaShares which “partners with utilities” and allows consumers to “earn, own, and trade the water they save.” While increasing the number of reservoirs and improving their management is a must, such voluntary trading systems are far better alternatives to water management than laws like the one California just passed, which imposes fines for using too much of an area’s daily allotted water quota.
Other examples of the benefits of free markets include the American Prairie Reserve, a non-profit organization based in Montana which is privately funded and has a goal of preserving vast tracts of unique North American prairie. The sheer extent of the land in the sights of the organization for this purpose is dizzying, with an anticipated reserve that Reason Magazine reports would be over 3 million acres in size and include the Charles M. Russell National Wildlife Refuge as well as leased public lands. But beyond the incredible objective of a protected reserve, the efforts of the American Prairie Reserve have had huge impact in the fight for the endangered American Bison.
The history of this fight is one that reflects the exceptional ability of the private sector to promote conservation when government involvement is nonexistent or inadequate. The Mises Institute recounts that as early as the 1860’s, when government policy often hurt or did precious little to help the preservation of this species, private ranchers began to gather wild buffalo, and by the early 1900’s, the Yellowstone National Park reported 23-25 bison, while private owners boasted 700 bison. Even in more modern times, as recently as the 1990’s, the ratio of privately to publicly-owned buffalo has remained lopsided.
Today’s buffalo that can be found in the care of private owners number an amazing 250,000. The herd currently residing on the American Prairie Reserve is classified as “indigenous species managed as livestock,” but the APR strives to give its bison the freedom to openly roam. Yet such an approach needs the cooperation of the individuals on adjacent lands, often ranchers, to give a sort of “travel visa” to the Bison and countless other native wildlife found on the reserve. How can this attitude on the part of surrounding ranchers be motivated? A solution here arises from the principle of making conservation a financially attractive option for these people and their business. The American Prairie Reserve accomplishes this through their Wild Sky beef program, which offers a premium higher rate for meat from ranches that allow and accommodate the presence of wildlife.
This concept of compensating private citizens or companies for the loss introduced by environmentally conscious practices is another market-based tool that can aid conservation. Author, environmental attorney at the Pacific Legal Foundation, and adjunct fellow at PERC Jonathan Wood has written extensively on the topic.
Wood advocates the use of this model in tricky adjudication between private landowners and environmental activists in the case of the Dusky Gopher Frog found indigenously in Mississippi. When 1500 acres of private land were classified as “critical habitat” for this species of frog, the owners contested the high cost of this designation in court, but the Center for Biological Diversity, downplayed these costs to almost nothing. Rather than a back and forth over vastly different loss estimates, Wood suggests a contractual mediation which allows an environmental group to “complete the permitting or environmental review process for a property owner.”
Wood writes, “If the environmental group believes that process can be completed for $1,000 and the property owner believes it would cost $10,000, the environmental group could offer to do the work for $5,000,” detailing the particulars of a mutual benefit in which “the environmental group would raise $4,000 to fund its conservation work and the property owner would avoid $5,000 in perceived cost.” The potential for alleviating conflict over ultimate cost and achieving win-win outcomes is a large draw for this method.
While the reach of the private sector in the environmental sphere has been met with some skepticism, many of these organizations are paving the way by showing the potential for private sector partnerships and models to make a positive impact on conservation. But the hope in these examples does not discount the sometimes ugly side of how businesses and non-governmental organizations can potentially abuse an environmental agenda.
For example, The Nature Conservancy publicly asserts on their site that “the private sector has an important role to play in advancing our conservation mission,” but a search for these details in certain cases leaves more questions than answers. The organization’s words seem to support the narrative that The Nature Conservancy looks to collaborate with members of industries that have an impact on the areas of the environment which they focus on preserving. Just a sampling of their collaborations includes the details of over 40 current partnership projects and a list of partners ranging from Disney to The Coca Cola Company, from Neutrogena skincare to Shell oil.
The Nature Conservancy’s message is certainly appealing, and not altogether unrealistic. But whether the organization has been able to live up to its stated purpose is undetermined. The question remains whether this optimistic perspective is met with as much goodwill from the other parties involved. Are the motives of private sector actors, particularly those in industries that endure massive scrutiny from environmental activists, truly pure?
As author and Senior Policy Advisor at CFACT Paul Driessen observes, such companies can often be merely seeking “feel-good PR” and falling into the role of appeasement that Winston Churchill describes as “one who feeds a crocodile, hoping it will eat him last.” With this in mind, another look at The Nature Conservancy shows a different perspective: that its long list may be more about name-dropping than positive relationships with businesses.
Supporting this possibility is a site page dedicated to the organization’s work with Shell oil that is disappointingly vague. While other project links on The Nature Conservancy’s website contain detailed information, including dates, locales, and explanations of their methods, the write-up on Shell’s contributions is unconvincing. Broad, generalized statements instead of specifics, and wording that suggests Shell oil is offering money rather than collaboration, indicates the intent of purchasing a bit of meat to feed the crocodile.
While the area of private sector partnerships certainly contains pitfalls for the environmental field, the realm of environmental free-market models is not exempt. Taking the example of AquaShares’ budding markets in the area of water utilities, expanding the scale of this endeavor is not an easy path. The implementation of a drastically new way of treating a resource presents incredible difficulty, and PERC notes that currently in America “we rely on various authorities and utilities to distribute water,” and that “For many people abandoning the status quo in favor of markets is a scary proposition…especially with a system that has operated the same way for decades, if not a century.” These and other obstacles are important to recognize and are key to a balanced perception of private sector capabilities in environmental activity.
Yet the promise that private sector, free-market ideas and actors still hold is hard to deny, and examples like Ecosia.org, AquaShares, and the American Prairie Reserve point to a future of cooperation and innovation that can enable the private sector to do tremendous work for conservation.