How Private Property Can Protect Rivers From Pollution

Many prominent environmental activists, such as teen media star Greta Thunberg and former Vice President Al Gore, raise various environmental concerns from climate change to natural resource depletion to water pollution. However, they consistently identify big government as a one-size-fits-all solution for all of these issues, despite these issues’ complexity and wide-ranging variance.

It is easy to understand how the conflation of environmentalism and expansive government authority developed, as the simplest way to implement decisions is through the absolute authority of the government. Yet, this mindset ignores the option of free-market environmentalism, which offers solutions that are more efficient and decentralized than unaccountable bureaucracy. Real-world examples bear this out. As discussed later on, ongoing conflicts regarding a proposed copper-nickel mine operation in Minnesota and its environmental effects on the publicly owned Saint Louis River could be resolved with private property rights.

Despite the criticism that capitalism often receives, privatization helps to conserve natural resources by assigning price value and the incentive of profitability for resources. When land is purchased, the new owner places an investment based on a value of not only the land, but of the resources it contains. The long-term conservation of resources, which is essential to preserve property value and to recoup investments, is not only encouraged, but is a necessary action pushed by market forces. When the supply of a resource dwindles, the market reacts by finding a new equilibrium at a higher price level, decreasing the demand for the resource and encouraging conservation.

Private property creates accountability. Individual decisions become subject to consequences, and the consequences drive value. The bathroom in your home is likely in much better condition than most public bathrooms. The conditions of many commonly owned resources—such as many waterways, public parks, and national forests—in the U.S. currently resemble those of gas station bathrooms, despite the regulations and spending by the Environmental Protection Agency (EPA) and other government entities.

The flaw of publicly owned resources is illustrated by ecologist Garrett Hardin’s famous 1968 essay, “The Tragedy of the Commons.” When a resource is commonly owned, all parties will move to acquire it before someone else does. There is no incentive for long-term use, as resources become subject to Hunger Games-style free-for-alls, with each party competing for the resource.

For example, the colonists of Plymouth Rock abandoned communal farming in favor of land privatization in hopes of yielding more corn. As George Will notes in his book, The Conservative Sensibility, the colony’s governor, William Bradford, wrote in his journal that agricultural privatization “had very good success; for it made all hands very industrious, so as much more corn was planted than otherwise would have been made by any means.”

While the intentions of government-first environmentalism may be altruistic and sincere, it shifts decisions away from those primarily affected by its consequences to bureaucracies that are motivated by an array of political and financial interests.

Many often perceive government bureaucracy as an institution independent from outside interests, but that is rarely accurate. George Will summarizes this insight from James M. Buchanan and Gordon Tullock’s book The Calculus of Consent (1962): “Government is not the sole disinterested faction, it is a faction. It’s a faction with a police force, an army, a permanence, and the power to enforce its collection of resources.” Government bureaucracies seldom suffer consequences for their actions. The result is unsurprising: major decisions that lack situation-specific information and no accountability for said decisions.

For example, in response to a lawsuit filed by the Fond du Lac Band of Lake Superior Chippewa—an American Indian reservation in eastern Minnesota—the EPA stated that the proposed open mine located approximately 70 miles north of the Band “may affect … the quality of waters” of the Saint Louis River, which runs through the reservation. The decision to reinvestigate the potential side effects of the PolyMet Mining Corp. mine comes about two and a half years after the Minnesota Pollution Control Agency (MPCA) decided to issue PolyMet a 401certification and water quality permit after meeting water quality standards. The Fond du Lac Band contends that the models used by the MPCA and PolyMet do not meet adequate standards, sending the already-prolonged conflict to a bureaucratic inquiry.

One of the few things that has been made clear by this conflict is that the government is not helping. Two-and-a-half years of inquiries, investigations, permit-seeking, and litigation across both federal and state governments have made little progress. The implementation of property rights on the river would swiftly and efficiently resolve the conflict in a manner that maximizes economic output and environmental stewardship. As extreme and outside-the-box an idea as it may seem, private water management has worked in the past.

When it comes to rivers, it is past due to hand the reins to the free market and private property owners. As noted in Terry L. Anderson and Donald R. Leal’s book Free Market Environmentalism, in the 19th century, Montana, Wyoming, Colorado, and New Mexico abandoned all common riparian ownership and opted for privatization as a means to increase their scarce water supply. In Scotland, fishing rights for wild salmon have been granted to private individuals and businesses by the Crown to maximize salmon output while preserving the salmon population. While owners do not have proprietorship of the river, but merely exclusive-fishing rights, it is nonetheless representative of the broader movement to decentralize riparian water rights.

While a transition to a private system for the Saint Louis River wouldn’t be a simple process, policy makers should start to move in that direction. The river is most commonly used for recreational activities from which owners could profit, such as fishing, canoeing and kayaking, and hiking. It wouldn’t be the water itself that is owned as it flows downstream, but the land on which the river rests. Owners would be able to collect revenue from guests from entrance and user fees or on a member subscription basis.

Moreover, privatization would be extremely beneficial to the water quality of the river, which the EPA has designated as an Area of Concern since 1987. Private property would encourage owners to act as conservationists, as pollution and contamination would lose customers and depreciate the property value. Owners could appeal to nature enthusiasts—likely a core demographic of potential customers—by providing pristine and unsullied water quality. And if profitability were not to prove enough of an incentive, the fear of litigation resulting from river pollution downstream would surely discourage any environmentally damaging actions by the owner.

Privatization of the river wouldn’t necessarily result in exclusively for-profit ownership. Non-profit conservationist organizations could purchase portions of the river and gain full autonomy over environmental actions on their property. Likewise, schools, colleges, and universities would benefit from ownership by using the river as an educational resource. Youth groups might also be interested in river ownership. The Boy Scouts of America—who own approximately 220 square miles of largely undeveloped land in New Mexico—are no strangers to using private ownership to provide incredible experiences for youth while preserving nature.

River privatization would be beneficial for the Fond du Lac Band as well. Aside from having major improvements of water quality, they would be made owners of the portion of the Saint Louis River that runs through their reservation, which is currently publicly owned despite its location within the reservation.

Despite what many contend, privatization would not greenlight reckless actions from private enterprises such as PolyMet. Any water contamination, pollution, or negative environmental consequences of the mine could jeopardize PolyMet, as the numerous owners of the river would seek litigation for property damage. The increased risk from mining would cause PolyMet to perform more accurate studies and precise analysis into the mine’s effects on water quality and come to a decision based on the real risk and rewards.

Privatization of rivers and other natural resources may face an uphill battle because it challenges the conventional wisdom on water rights. Yet, policy makers would be wise to investigate these issues. Allowing free enterprise to grow while simultaneously conserving the environment is of critical importance. In the case of the Saint Louis River, the balance should be determined by the market, where all of the river’s constituents have a voice, rather than by bureaucrats who are largely unaffected by their own decisions.