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Entrepreneurs and the Environment: Michael De Alessi in The World and I

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Entrepreneurs and the Environment: Michael De Alessi in The World and I

Encryption and Health Care

Published in The World and I

April 1, 2001

 

Despite much ecological pessimism in recent years, the gains in environmental quality around the world in the last few decades have been astounding. People are living longer, the air is getting cleaner, and agriculture is becoming more productive, freeing up more land for wildlife and forest growth.

 

Yet, strangely enough, the general view of the environment's future seems to be a dim one, and the issues of environmental protection and conservation seem to be growing in importance all the time.

 

Why the disparity? One reason is that although entrepreneurs have largely driven the gains in agriculture and technology that have improved environmental quality, they are still not viewed as trustworthy stewards of the environment--despite the generally dismal track record of governmental conservation programs. Widespread fisheries depletion, overgrazed and overcrowded national parks, the forest fires that ravaged the Southwest last year, and the failure to recover endangered species are all potent reasons to search for more viable alternatives.

 

Private conservation is one such alternative. It provides environmental benefits through the institutions of private ownership and the marketplace, which create incentives to protect and enhance natural resources. And whether they are profit seekers or simply motivated by a love of nature, private conservationists tap into the entrepreneurial spirit, providing a variety of approaches to solving environmental problems.

 

Even some traditional environmentalists recognize private conservation's potential. For example, Brent Blackwelder, president of the "green" organization Friends of the Earth, has said, "While I don't believe that private efforts alone are the answer, recognizing the ingenuity, commitment, and effectiveness of private stewards is imperative."

 

In the United States, private conservation predates the nation's independence. When Jefferson saw the Natural Bridge of Virginia, a remarkable natural limestone formation, it so inspired him that he bought it from King George of England in 1774. It is still privately owned today and open to the public, yet its natural setting remains unspoiled.

 

SAVING WOOD DUCKS AND THE WOODS

Another early private-conservation success story was the recovery of the wood duck in the United States. Due to hunting and government incentives to fill in wetland habitat toward the end of the nineteenth century, the wood duck population was dwindling. But conservationists found that it was easy to create artificial nesting habitat for this species, and soon duck boxes were being placed around the country. Everyone from Boy Scouts to wildlife biologists helped put up the boxes, often on private land. Today, the wood duck is one of the commonest waterfowl species in the United States.

 

Unfortunately, helping rare and endangered species has gone from being an attractive proposition to a liability. Under the U.S. Endangered Species Act (ESA), having a rare or endangered species can mean a loss of rights to private land. The size and scope of such measures as the ESA have discouraged many private conservation efforts and have overshadowed past successes such as the recovery of the wood duck.

 

In fact, some of the best examples of private conservation arose in direct opposition to government programs of their day. Hawk Mountain in Pennsylvania has been a privately owned sanctuary since it was purchased in 1934 by the early suffragette Rosalie Edge. Before 1934, vast numbers of raptors would glide by Hawk Mountain on their southbound autumn migrations, where an army of hunters would fell them and collect the government bounty on raptors.

 

Early conservationists lobbied to stop the slaughter, but their pleas fell on deaf ears. So Edge simply raised some money and bought the mountaintop in 1934, hiring a warden to patrol and protect both the property and the birds. Today, it is one of the premier hawk-watching sites in the world, visited by 80,000 people annually.

 

Forests offer another stark contrast between public and private management. The national-forest system was set up initially for logging, but over the past 30 years that focus has changed to preserving wilderness--that is, doing nothing with the land. The worst part of this has been the government's fire-suppression policy. Instead of large, beautiful forests with big trees and green, open areas underneath, the policy has created a dense underbrush, so that now, when there is a fire, it burns hot enough to reach the crowns of the bigger trees, killing them, whereas before this was not the case. The trees are also more susceptible to disease and pests such as bark beetles.

 

On private lands, however, there has tended to be salvage harvest of trees, work to limit noxious pests, and control of the undergrowth. Many private forest owners are also moving away from logging as their sole revenue source toward such fee-based activities as camping, hiking, and hunting. In fact, due to current management practices on public lands, George Reiger, the conservation editor at Field and Stream magazine, believes that "the future of hunting for millions of American sportsmen will be on privately managed farms, forests, and rangelands."

 

RHINOS IN ZIMBABWE, BANDICOOTS IN AUSTRALIA

Private efforts have even been able to set aside areas as big as the national parks. Zimbabwe, for example, has private wildlife conservancies that were created by owners of adjoining lands, mostly cattle ranches. After the internal fences were torn down and all the cattle removed, native wildlife returned rapidly. The largest, the Save Valley Conservancy, covers almost a million acres.

 

One impetus for creating the conservancies was to put the last remaining black rhinoceroses in Zimbabwe on private lands. The black rhino population had dwindled to just a few hundred. The ecotourism revenues of the conservancies depend on the rhinos, so they are vigilantly protected. A scout tracks each animal all day, and not a single one has been poached in the Save since its formation. In addition, for the first time in decades, Zimbabwe's black rhino population is increasing--at its biological maximum speed, no less.

 

Zimbabwe has shown the world that a sense of communal ownership can have dramatic conservation effects. On the nation's communal lands, where some of Africa's poorest people live, the wildlife used to be managed by the state, and so elephants and other large animals were considered a nuisance (they trampled crops and people, for example). Some years ago, however, Zimbabwe created the CAMPFIRE program, which allows local people to capture the rewards of effective wildlife management--by, for example, using the fees paid by hunters to build schools or mills. As a result, local residents no longer view wildlife habitat only as potential farmland; it is an asset in its own right.

 

Unfortunately, Robert Mugabe's regime is now encouraging political activists to squat on private Zimbabwean land--including the conservancies. Some rhinos have already died by becoming tangled in snares. Of course, this is a failure of politics, not of private conservation.

 

Earth Sanctuaries Ltd. (ESL), an Australian company, provides one of the world's best demonstrations of environmental entrepreneurs' effectiveness. ESL was founded in 1969 by John Wamsley, who realized that the way to save Australia's endangered species was to protect them from feral predators (mostly cats and foxes). More important, he had the wherewithal to do something about it--which is a good thing, because more mammals have become extinct in Australia in the last 200 years than anywhere else in the world.

 

According to noted environmentalist David Bellamy, "John Wamsley's vision is probably the most important thing happening in the world of conservation."

 

Since ESL started buying land, building feral-proof fences, and reintroducing native species, endangered Australian species including rufous bettongs, long-nosed potoroos, wallabies, and southern brown bandicoots have thrived. ESL is well into a business plan that includes target numbers for specific species and the goal of turning 1 percent of Australia into private wildlife reserves by 2025.

 

Revenues come from ecotourism, consulting, and wildlife sales, but ESL's biggest "profit" is saving Australia's endangered species. Its efforts are producing results and attracting investors. In fact, last May, Earth Sanctuaries was listed on the Australian Stock Exchange, earning the distinction of being the world's first publicly listed company whose core business is conservation.

 

FROM HALIBUT TO SALMON

Ownership rights are also radically changing the way entrepreneurs look at fisheries. When regulatory controls are the norm (as they are in most of the world's fisheries), fishermen look for innovative ways to beat the system. An extreme example was the Alaska halibut and sablefish fishery, where regulators tried to reduce harvests by shortening the fishing season. Before long, what was once a nearly six- month season had been reduced to 48 hours--with no reduction in the catch! People simply figured out how to catch more fish in less time.

 

Today, that fishery is one of the best managed in the United States. An individual transferable quota (ITQ) system allots a certain percentage of the total catch to each fisherman. Now there's no more race to fish and no more huge investments in the capacity necessary to catch a year's worth of fish in two days. A recent letter to the Alaska Fisherman's Journal summed up reaction to the change: "We fish better weather, deliver a better product, and have a better market. This is a better deal."

 

The key to innovation and environmental stewardship may be more than markets, however. Another crucial factor is private ownership--which Alaska fishermen do not have. They own neither the fish nor the fishery but just the right to harvest fish, and the government can take this away at any time. As a result, the fishing business is improved, but little has changed about managing the fishery.

 

A real private-conservation alternative exists under English common law. In Britain, for example, there are private, heritable rights to fish for salmon in rivers and streams. The owners of these rights have a recourse against polluters, because the latter are damaging the fishermen's rights as surely as if they were throwing rocks through someone's window.

 

Even in Washington State, where there is no such right to clean water, the fact that oyster beds can be privately owned has led to cleaner water. Oysters are filter feeders, which depend on clean water, and so the oyster growers have been the most vigilant protectors of water quality in that state. According to Dick Wilson, a Washington oyster grower, "Willapa is the cleanest bay in the country, and it is the oystermen who have kept it that way."

 

In New Zealand, ITQs have evolved into something more closely resembling real property rights, and the results have been astounding. New Zealand quota owners have formed companies that are effectively managing the fisheries. They invest heavily in research, enhancement, and other measures because the value of their ITQs is directly tied to the future health of the fisheries.

 

Philip Major, then spokesman for the New Zealand Ministry of Agriculture, described one remarkable result of this transformation some years ago: "It's the first group of fishers I've ever encountered who turned down the chance to catch more fish."

 

AN ENVIRONMENTAL GROUP'S OIL WELLS

Another example of how private ownership leads to trade-offs rather than conflicts is a private sanctuary in Louisiana owned by the Louisiana Audubon Society. National Audubon has vehemently opposed drilling for oil on public lands in any number of cases, yet there are actually some wells in the Rainey Wildlife Sanctuary. Rainey is such an important bird sanctuary that the public is not allowed to visit. But because Audubon owns the land, it was able to weigh the benefits of drilling against the environmental hazards--and to take whatever precautions it thought necessary to protect the birds.

 

Of course, many companies and individuals aren't good stewards of the environment--but once again, it seems to be a question of ownership. Degraded resources, whether rivers, forests, or airsheds, are generally unowned. Timber leases in the United States are one example. Timber companies tend to behave very differently depending on whether they harvest trees from their own property or from public lands. Private timberland owners tend not only to invest in the forest's future health but to consider fee-based alternatives to logging such as hunting or hiking, which they cannot do with a short-term lease on public forest lands.

 

Legal restrictions on how rights may be exercised can impede private conservation. Until recently, water rights in Oregon were based on a "use it or lose it" regime, in which leaving water instream for salmon was not considered a use. This created conflict between farmers and the environmental community. Once the law was changed to include instream flows in the definition of "use," however, an entrepreneurial conservation group called the Oregon Water Trust became very successful at buying water rights to leave the water instream.

 

What Thomas Jefferson understood so well in the eighteenth century-- that private ownership is the surest way to protect something--has become less influential in recent years. But the concept has hardly gone away. Human ingenuity and the entrepreneurial spirit underlie just about every private-conservation success story. When private property institutions prevail, problem solvers become remarkably resourceful at protecting and enhancing the value of what they own--for reasons as different as profit and aesthetics--whether it be fisheries and forests or backyard gardens.

 

Michael De Alessi is director of the Center for Private Conservation, a project of the Competitive Enterprise Institute in Washington, DC. He lives in San Francisco.