Each month, an expert from the liberty movement shares thoughts on how to be more strategic in our charitable giving. This month, Reed Watson, executive director of the Property and Environment Research Center explores why, despite the perception, care for the environment is not at cross purposes with the goals of right-of-center donors.
Earth Day is April 22, but I doubt you have it circled on your giving calendar.
That’s because too many libertarians and conservatives view the environment as a “no fly zone” for their philanthropy.
Some donors struggle to square their beliefs in free enterprise and limited government with the widely held (but false!) notion that environmental degradation results from so-called “market failures.” Worse, others view liberty and environmental quality as mutually exclusive.
They are not!
Liberty and environmental stewardship go hand-in-hand. More good news: You have ample opportunities to make charitable investments that advance both. The following information might help you start.
Free-Market Environmentalism
In the late 70s a group of economists at Montana State University began exploring the question of why, if markets and the price system worked well at allocating economic resources, they failed so miserably at conserving environmental resources. Such had been their training, even from such bastions of classical liberal thinking as the University of Chicago and the University of Washington.
The answer they reached surprised many: Environmental degradation was not the result of market failure, but rather a result of the absence of markets. In every instance of resource depletion they studied, from forests to fisheries to federal lands, a lack of clear ownership discouraged conservation and made voluntary trade too costly, or outright impossible.
The paradigm they developed became known as free-market environmentalism or “FME,” and it rests on three foundational principles:
1. “Wealthier is healthier!” Markets, property rights, and the rule of law are fundamental to economic growth, and economic growth is fundamental to improving environmental quality.
2. “No one washes a rental car.” Property rights make the environment an asset rather than a liability by providing owners an incentive for stewardship.
3. “Environmental gains from trade are possible.” Voluntary exchange in the marketplace allows people with different priorities regarding the use of natural resources to cooperate rather than fight. When cooperation supplants conflict, gains from trade emerge.
For the liberty-minded donor who wants to support environmental conservation, there are two broad investment categories: (1) research centers and policy shops advancing FME principles, and (2) conservation organizations applying them.
Each category raises a unique set of issues donors should keep in mind.
Advancing an Alternative
Research centers and policy shops talk the talk, and I don’t mean that pejoratively. These organizations fight the intellectual war against the status quo of environmental politics and rent-seeking. A small handful of free-market organizations are dedicated exclusively to environmental issues. The Property and Environment Research Center (PERC), where I work, is one of them.
Despite being outnumbered and out-funded, these groups are winning some important battles.
For example, two years ago few opposed the reauthorization of the Land and Water Conservation Fund, a 1965 law that funds federal land acquisitions and conservation projects with off-shore oil and gas royalties. PERC scholars pointed out the absurdity of expanding the federal estate when the National Park Service was reporting a $12 billion maintenance backlog. Legislation is now pending to direct LWCF funds exclusively to deferred maintenance—no more land acquisitions—and to harness market-based innovations such as congestion-based user fees and national park franchises.
Increasingly, national think tanks are also funding environmental-focused scholarship and policy initiatives. Even more promising, a number of state-based think tanks are committing resources to advancing free market environmentalism at the state and local level. Utah’s Sutherland Institute, the Washington Policy Center, and Michigan’s Mackinac Center are leaders here and generate high returns on investment.
A key to philanthropic success in this category is understanding the organization’s primary objective. Is the goal to advance ideas and policies that ultimately improve environmental outcomes or, more commonly, to reign in environmental regulation for the sake of deregulation and economic prosperity? These two objectives are not mutually exclusive, but they are distinct.
Boots on the Ground
Another option for the liberty-minded environmental donors might surprise you: boots on the ground conservationists.
The fact is, free-market environmentalism is no longer just an idea. It is a proven and effective alternative to political environmentalism, and many professional conservationists are walking the walk.
The choice here is one of scale. Several large conservation organizations have recognized the utility of property rights and voluntary exchange to enhance environmental assets, and they’re deploying these as conservation strategies around the world. One noteworthy example is the Environmental Defense Fund, which pioneered and then popularized tradable property rights in marine fisheries.
On the other end of the spectrum are small-scale environmental entrepreneurs, or “enviropreneurs,” who are turning environmental conflicts into business opportunities. Many have structured their organizations as not-for-profit charities and can generate tangible conservation benefits even with modest gifts. This database is a good starting point.
Do Not Be Afraid
It is easy and not uncommon for liberty-minded donors to shy away from environmental giving. This need not be the case. The individuals and organizations advancing free-market environmentalism—and even those applying it on the ground—offer donors the opportunity to support both liberty and environmental quality. On this Earth Day, consider making a gift that supports the environment and liberty. It can be done.
Reed Watson is the executive director at PERC. the Property and Environment Research Center in Bozeman, Montana. His research focuses on the implementation of market-based solutions to natural resource conflicts focusing particularly on public lands, water, and wildlife issues. His writing has appeared in the Wall Street Journal, New York Times, and the academic literature. Reed holds a J.D. and M.A. in Environmental Economics from Duke University and a B.S. in Economics from Clemson University. He lives in Bozeman with his wife, two sons, and a dog. He can be reached at reed@perc.org.
