With the recent passing of Ronald Coase, much tribute has rightly been given to his inordinate contributions to the world of economics, here by Peter Boetkke and here by Patrick Lyons of the NYT. I’m not an economist and don’t even pretend to be one on TV, but have followed and appreciated Coase’s contributions to the scholarship of environmental policy involving the economic problem of environmental externalities. Most modern economists, save Coase, believe that environmental pollution is the result of market failure. Adler has a good piece today on Coase’s rejection of the concept of externalities and corrects those who may misunderstand or misinterpret Coase’s argument. According to Coase, when property rights are clear and well-defined, contracting parties, including the polluter, will allocate resources effectively and efficiently, as the economic benefits and costs – read environmental – are fully borne by the effected parties. This idea was coined the Coase Theorem. Continue reading
Props to Todd Gartner, of the World Resources Institute, and Laura Huggins, of the Property and Environmental Research Center, for joining efforts to promote innovative new ways to protect threatened and endangered species. Todd and Laura are bold new voices on leveraging markets to accelerate the protection of habitat loss for many species struggling for their continued existence.
This work is absolutely essential for protecting T&E species of which over 75 percent can be found on private lands. While the Endangered Species Act is an important piece of legislation, serving as a backstop from keeping species from being driven into extinction, ESA can also create perverse incentives to landowners who, rather than conserve critical habitat, quietly eliminate it before ESA locks down the uses and economic value of their property. These new market-based initiatives encourage landowners to take proactive steps to conserve habitat before species are required to be listed under ESA. Our goal as a society
should must be to transform species protection into a positive rather than a negative. And the efforts of Todd and Laura are helping to change not only the economics but the dialogue and cultural valuation, which is even more important.