NCPA - National Center for Policy Analysis

Eco-Nomics and Property Rights

June 26, 2003

Increased property rights and market solutions to specific problems are better ways to protect and improve the environment than relying on government regulation, says economist Richard Stroup.

According to Stroup, government policies that erode property rights protections reduce owners' incentives to conserve their environmental resources. As a result, strict regulation has failed to bring about significant benefits to the environment. For example:

  • The Endangered Species Act of 1973, which allows federal agents to control landowners' use of their property if endangered animals inhabit it, has helped save only 13 out of nearly 1,800 listed species.
  • The 1980 "Superfund" clean up of hazardous waste sites has cost $20 billion, and at 87 of 96 sites surveyed, the cost per cancer case averted was $100 million.
  • As the cost of regulation grew from $51 to $218 billion between 1977 and 2000, so did the number of lobbyists in Washington, from 3,403 to 51,381.

Furthermore, says Stroup, extensive research shows that countries with well-protected property rights have healthier citizens, cleaner air and water, and more incentives to safeguard environmental resources.

  • In nations with strong property rights, 93 percent of the population has access to safe drinking water, while only 48 percent do in countries with weak rights.
  • Ethiopia, a socialist country with very weak property rights, has three times the amount of arable farmland as the Netherlands yet exported only $4.02 per person worth of food in 2001; the Netherlands, which relies on markets and trade, exported $904 per person.

By giving property owners financial incentives to protect their property -- and by extension, the land, water and air that comprises it -- both the economy and the environment will benefit. More regulation, on the other hand, results in lower environmental standards in the long run, explains Stroup.

Source: Richard L. Stroup, "Eco-Nomics: What Everyone Should Know About Economics and the Environment," 2003, Cato Institute.


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