February 15, 2013

Are ecology and economics reconcilable?

By Jonathan Wood Attorney

The latest issue of PERC Reports explores whether ecology and economics are reconcilable. This is an issue which we’ve covered extensively on this blog. As we’ve explained, environmental values are best protected by a system of secure property rights, with compensation provided anytime those rights are restricted, including for environmental purposes. These protections are essential to identify those environmental resources that should be protected, without needlessly preventing other resources from being put to productive use. Property rights are also an effective tool for promoting environmental stewardship.

Unfortunately, much of the environmental movement reflexively rejects property rights approaches to environmental protection. For example, one of PERC’s articles explains how politics and ideology have unnecessarily frustrated efforts to balance forest protection with timber harvesting. Environmentalists reject the conversion of some of the natural forest to timber plantations—that would be operated sustainably and with increased productivity—despite the fact that it would greatly reduce the share of the natural forest that is harvested. A similar issue recently arose in Texas, where private landowners have established preserves for exotic endangered species from around the world—including some that are extinct in the wild—financed largely by revenues from the managed hunting of the animals. Last year, radical animal rights groups successfully lobbied the federal government to regulate these animals under the Endangered Species Act. Of course, this frustrates the incentive to create these preserves, and the species are ultimately more likely to be lost.

The magazine also has an article by Matt Ridley explaining why economic growth is the best means of increasing environmental protection.

All the economic models agree that the fastest economic growth will produce the smallest population, the most frugal use of resources, and the most land sparing. So what could go wrong?

The Jevons Paradox argues that we compensate for greater efficiency by using more of a resource because it is cheaper. But this is no longer true of land: There is a steady release of land from farming going on in countries like the United States. …

Organic farming is another example of ecologically good intentions that would pave the road to environmental hell. Organic farming is nice enough as a local fad, but if it were pursued on a global scale it would require a doubling of the amount of land devoted to agriculture, because organic yields are necessarily much lower than those using synthetic fertilizer. In effect, organic farmers have to grow their own fertilizer as “green manure” or dung from livestock, which takes up far more land than making fertilizer in a factory. If the world were to go organic, it would require a renewed and massive assault on forests, wetlands, and nature reserves to feed the global population.

Paradoxically, economics has done more for nature than ecology has.

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