Capturing Public Goods from Private Lands
Reed Watson, PERC December 7, 2011 Austin, Texas
Outline • The public goods problem • The property rights solution
– Examples • Entiat River, Washington • Cheney Lake, Kansas • Devil’s Kitchen, Montana
– Takeaways • Opportunities in Texas • Questions
Public goods problem • Common examples: national defense, radio
waves, open space, air quality, wildlife habitat, etc.
• Defining characteristics: – Non-rivalrous: one person’s consumption does
not reduce availability to others. – Non-excludable: impossible to limit
consumption. – Diffuse benefits, local costs.
• Traditional thinking: – Private parties will not produce public goods in
optimal quantities (if at all) because production doesn’t pay.
Public good or private bad?
0
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0-3 4 to 10 >10
Harvest Age = ƒ(RCW Density)
Property rights solution • Private landowners will produce environmental
goods and services like open space, air quality, and wildlife habitat IF… 1. property rights are clearly defined, secure, and
transferable; AND 2. transaction costs are low.
• English translation: 1. No one washes a rental car. 2. If it pays, it stays.
• The additional revenues earned by private
landowners producing public goods can help protect rural landscapes and economies.
Example: Entiat River, Washington
Example: Cheney Lake, Kansas
Example: Devil’s Kitchen, Montana
Takeaways • Creative cooperation
– Organic ideas have the most success. – Political entrepreneurs can grease the skids.
• Objective measurement – What does the buyer want? What can the seller influence? – Can both agree to an objective measure?
• Scope – Large enough to have an impact and hedge risk. – Small enough that coordination and monitoring costs stay
affordable. • Timing
– Both buyers and sellers want flexibility for themselves but certainty from the other group.
Opportunities in Texas • Wildlife populations
– Private landowners can enhance endangered species and other wildlife populations if they’re seen as assets, not liabilities.
– Contract-based habitat conservation often produces immediate, amicable, and lasting results.
• Water supply and water quality – Contracts such as easements
might be a cost-effective way of securing water supply and quality for booming municipal populations.
– Groundwater rights must be clearly defined, secure, and transferable.
“Conservation will ultimately boil down to rewarding the private landowner who conserves the public interest.” -Aldo Leopold
www.perc.org (406) 587-9591 [email protected] 2048 Analysis Drive, Suite A Bozeman, Montana 59718
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