Protecting Property Rights, Preserving Federalism and Saving Wetlands

Policy Reports | Energy and Natural Resources

No. 291
Wednesday, October 25, 2006
by Daniel R. Simmons, J.D. and H. Sterling Burnett, Ph.D.

Would Less Federal Regulation Be Bad for the Environment?

Contrary to the federal government's view for its first one and one-half centuries, wetlands are not public nuisances. Many wetlands provide economically and ecologically valuable services - such as water filtration, flood mitigation and habitat for species - which were not fully understood or considered until relatively recently. Clearly, both Kennedy's concurring opinion and the minority opinion in the Rapanos and Carabell cases indicate some justices are concerned that the environment would suffer greatly if the Clean Water Act's regulatory authority was restricted.

Even so, the current position of the Corps and the EPA goes beyond clear congressional intent and, arguably, beyond what the Constitution allows. But even where the federal government has legitimate authority over wetlands, evidence indicates that states and private parties are more than capable of protecting much of the nation's ecologically valuable wetlands.

Protecting Wetlands. To establish a proper wetlands policy, it should first be explicitly acknowledged that while many wetlands are economically or ecologically valuable, others are not - rather, they are simply a breeding ground for pests. A rational wetlands policy would distinguish between the two - and arguably, the federal government has no legitimate role when the question is whether or not a private party, state or local government should be allowed to develop a non-vital wetland.

Second, it is clear that the federal government has direct authority and responsibility to manage publicly owned wetlands:

  • Approximately 25 percent of wetlands in the lower 48 states are on federal property, and Article IV, Section 3 of the Constitution grants Congress the "Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States."
  • Executive Order 11990, issued in May 1977 by President Carter, requires executive branch agencies to avoid adverse impacts on wetlands to the "maximum extent possible."49

Thus, federal wetlands regulations on federally owned property raise no constitutional issues. However, federal lands often abut state or private property. When the government determines a particular wetland or adjoining land is ecologically valuable and split ownership threatens to degrade the wetland, the government should purchase the portion it doesn't own.50

"Federal subsidies encourage farmers and developers to destroy wetlands."

Ending Subsidies That Harm Wetlands. Another critical step the federal government could take to protect wetlands is to end subsidies that encourage unwise and destructive development of fragile, valuable wetlands.51 For instance, agricultural subsidies encourage farmers to cultivate as many acres as possible, often at the expense of wetlands. From 1986 to 1997, the conterminous United States experienced a net loss of 644,000 acres of wetlands, according to a report by the U.S. Fish and Wildlife Service (USFWS).52 While wetland losses have slowed in recent years and there are other causes of wetland depletion, the draining of wetlands for agricultural use continues to be the leading cause of wetland loss. Wetland conversion for agricultural use is responsible for:53

  • 87 percent of all wetland losses from the 1950s to the 1970s,
  • 54 percent of wetland loss from the 1970s through the 1980s, and
  • 49 percent of wetlands lost from 1986 to 1997.

A growing amount of wetlands acreage is also lost to commercial and residential development on the coasts and along rivers. Much of this development would not be undertaken were it not for federally subsidized flood control programs and flood insurance. Indeed, the Heinz Center, an environmental research institute, determined that without federal flood insurance and flood control programs, development density in areas at high risk of flooding - almost always made up of or containing wetlands - would be about 25 percent lower than in areas at lower risk.54

Ending federal subsidies for farming and flood insurance would reduce the destruction of wetlands and allow the reclamation of some wetlands that have been converted to other uses.

Federal versus State Authority over Wetlands. State governments also have a great deal of authority over wetlands within their borders. Indeed, federalism is a core principle of the Constitution. Federalism is the separation of power between the federal and state governments. The Founding Fathers thought that divided powers were necessary to protect the rights of citizen by creating two opposing powers. James Madison and others hoped that this would create a "double protection" to the people.55 Federalism should not be confused with states' rights. States do not have rights, they have powers. The Ninth and Tenth Amendments in particular demonstrate that the Founding Fathers were not confused over the distinction between rights and powers:

  • Amendment IX: "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."
  • Amendment X: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Today, however, the principle of federalism is more rhetoric than reality in our nation's Capitol - and this is nowhere more true than in the federal government's assertion of authority to control the development of isolated plots of occasionally soggy ground. History indicates this federal usurpation of state and local authority over development is not only unjustified but unnecessary.

"States have an incentive to protect wetlands because they compete to lure people seeking environmental amenities."

Race-to-the-Bottom of Wetlands. Some have argued that federal programs are needed because states will engage in an environmentally destructive "race-to-the-bottom" in which they will compete for development by sacrificing their environmental amenities.56 Intuitively, race-to-the-bottom has a certain appeal, but there are many reasons why it only occurs in theory.57 The most important reason is that environmental regulations are only one aspect over which states compete for business.58 Furthermore, while states want to lure businesses, they also need employees - and environmental amenities are one factor that lures people to one state over another. This desire for environmental amenities creates pressure for more environmental protections.59

If race-to-the-bottom were a good predictor of state regulatory decisions, one would expect the states to lag behind the federal government in the protection of environmental amenities. This is not the case, especially with respect to state regulation of wetlands. According to environmental policy expert Jonathan Adler, "Not only did states not wait for the federal government to begin regulating wetlands, but the order in which states began to act is the precise opposite of what the race-to-the-bottom theory would predict."60 Consider:

  • According to the National Wetland Inventory, 15 states have more than 10 percent of their land area in wetlands; with the exception of Alaska , all of them enacted their first wetland protection statutes before the CWA was applied to wetlands.
  • Moreover, most of these states have some protections for inland wetlands in addition to coastal wetlands - the exact opposite of what the race-to-the-bottom theory would predict, says Alder.61

It is not surprising that the states often take the lead for the protection of wetlands; after all, the individual states have the "primary responsibilities and rights ... to prevent, reduce, and eliminate pollution."62 According to the EPA and Corps, 15 states had programs that addressed isolated wetlands before SWANCC; since SWANCC, two states have adopted such legislation, while others are considering similar programs.63

"Hunters and resort developers have protected millions of acres of wetlands."

Private Protection of Wetlands. Long before either federal or state governments recognized the value of wetlands, individuals and private associations were actively protecting them. Indeed, in the late 19th and early 20th centuries, while the federal government was encouraging the development of coastal wetlands for ports and urban areas in major cities on the East Coast, about 11,000 private duck clubs managed to protect five to seven million acres of wetlands from destruction. While the federal government continued to promote the development, through subsidized insurance, of environmentally sensitive barrier islands, the commercial interests at Hilton Head Island, S.C., discovered that conservation was good.64

Private protection of wetlands continues today. There are over 1,200 land trusts that protect land through donation or purchase of the land in fee simple, or through the donation or purchase of conservation easements.65 According to the Land Trust Alliance, land trusts have protected more than 6.2 million acres.

Various conservation organizations also work to protect wetlands:

  • Ducks Unlimited has preserved over 10 million acres of wildlife habitat.66
  • The National Audubon Society has been working for the last 100 years to protect wetlands for bird habitat.67
  • In Maine , the New England Forestry Foundation purchased an easement to preserve 72,000 acres of wetlands in perpetuity.68

Numerous other landowners have created or preserved wetlands to attract wildlife.69 For example, California grape growers voluntarily created a no-crop buffer zone along streams, based on an economic model developed by a local agency.70

With so many ways to protect wetlands, there is ample reason to believe they will continue to receive protection by states, local governments and private parties, even if the regulatory scope of the CWA is limited. In fact, some research suggests wetlands may be better protected through public and private incentive-based programs for wetland restoration.71

"Due to private organizations, there has been no net loss of wetlands since the mid-1980s."

Incentive-Based Programs. The voluntary, incentive-based programs of the U.S. Fish and Wildlife Service's Partners for Wildlife Program and the Department of Agriculture's Wetland Reserve Program, along with state, local and private efforts, have been largely responsible for stemming the loss of wetlands since the mid-1980s.72 EPA's Clean Water Action Plan recognizes the role these incentive-based programs have played and will continue to play in wetland conservation and restoration.73

For instance:

  • Under the Partners for Wildlife Program, landowners restored 48,800 acres of wetlands in 2001 and 65,000 acres in 2002.
  • In Orange County, N.C., one family joined a Natural Resource Conservation Service project to restore 17 acres of wetlands in 2001.
  • And in Oregon , a married couple worked with government to repair 260 acres of wetlands along the Sprague River.74

An examination of federally reported data concluded that while the United States has achieved the stated goal of no net loss of wetlands, this would have been the case even without Section 404. In fact, according to this analysis, diverting the funds allocated to the Corps' regulatory program to voluntary incentive programs would have actually increased the rate of gain.75

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