Regulatory Costs of Anti-Property Approaches to Environmental Concerns

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Environmental regulations transfer substantial wealth and can be subject to the same political failure and regulatory pork-barreling that characterize economic regulation—perhaps more so, given the international scale of control sought, and some of the movement’s anti-market roots.  

The results of misguided environmental regulation and especially extremism include not just burdensome compliance costs but sacrificed environmental benefits, since regulation becomes “necessary” and embedded because of the failure to define property and use rights over resources and amenities in the first place, aggravating tragedy-of-the-commons problems.

In a Mont Pelerin Society speech entitled “The Bankruptcy of Collectivist Environmental Policy,” Competitive Enterprise Institute founder Fred L. Smith Jr. explained:   

Economic efficiency without economic freedom is impossible. Yet the progressives ignore that fact or simply claim that it is irrelevant for modern environmental policy discussions. The economic progressives argued that efficiency was impossible in a free market; modern Malthusian progressives argue that we must sacrifice freedom to save Planet Earth. The error is similar, for indeed, today, we do seek clean air and water in much the same way as economic planners once sought to produce wheat and bread. Political experts determine “desired” output levels, bureaucrats develop implementation plans, and mandates are promulgated.

And indeed, planned economies did produce some wheat, just as environmental regulators have achieved some environmental gains. However, their policies have failed to enlist the creative genius and energies of the peoples of the world in this task, because they have created no institutional framework for such contribution. The tasks assigned the individual in both worlds are similar: pay taxes, support expanded government intervention, and obey orders.

As classical liberals know well, this approach means that we cannot use the dispersed knowledge of the populace. Modern progressives have not suggested a means to advance environmental objectives individually, nor are they provided any incentive to do so with their policies. The regulatory state enervates rather than motivates, whether the problem is economic or ecological.

The last governmental studies on aggregate environmental costs decades ago—in the last century—led researchers to posit many tens of billions in costs or “investments,” while noting that they left much out of the picture; and none of those indirect costs have been added back. Indeed, the current situation is not merely that costs are not being incorporated, they are denied, and legally required aggregate cost surveys of regulation as such have been abandoned altogether.

There are plenty of examples of the adverse incentives created by the planning mentality. Critical habitat designation can render property worthless, pit landowners and species against one another, and seal the doom of charismatic megafauna as well as the homely or slimy. For a recent overview of the Endangered Species Act, see Robert Gordon’s “‘Whatever the Cost’ of the Endangered Species Act, It’s Huge.” Bans on plastics can harm the developing world and increase rather than reduce resource use. The Office of Management and Budget’s Circular A-4 guidance on agency regulatory review resorts to treatment of environmental quality and amenities with willingness-to-pay and market socialist frameworks. Property rights are challenging but necessary to protecting and expanding environmental amenities with a human-wellbeing focus as distinct from unmeasurable psychic values of untouched nature.

The Yellowstone hotspot is South Dakota-bound and will inevitably someday erupt, no matter what humans do. There are eight or nine planets in the solar system depending upon one’s sympathies toward Pluto, along with at least 146 moons, nearly 2 million asteroids larger than a kilometer, and millions of smaller ones; those count as unspoiled nature, perhaps far more vast than most humans’ conception of such a phenomenon. On earth, we take positive steps like incorporating property rights to boost fishing grounds, and avoiding regulatory passions—such as antitrust barriers to “collusion”—that can disrupt marine resource protection, and have plenty to learn and often a right to humility rather than the planner’s presumption of expertise.

Ordinary ecology and conservation become replaced with secular religion and a doom and gloom alliance as distinct from better engineering, waste management, and integration into property rights frameworks.

Note: This post is part of a series on “Rule of Flaw and the Costs of Coercion: Charting Undisclosed Burdens of the Administrative State,” and comprises an element of A Brief Outline of Undisclosed Costs of Regulation.