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Enviropreneur Showcase: GreenFaith

In an era of increased environmental degradation and strife, PERC Enviropreneur Institute (PEI) alum Reverend Fletcher Harper and his organization GreenFaith offer a unique look at environmental solutions and activism. Established in 1992 as a small and local organization in New Jersey, GreenFaith has grown to national proportions as an inter-faith environmental organization working with diverse religious groups to promote and mobilize environmental leadership.

Although religion and the environment may initially seem odd bedfellows, Harper is one among many* working to reclaim environmental stewardship as an integral part of the world’s religious traditions. Deep connections between religion and the environment already exist. For example, most of the world’s religions recognize the natural world as a source of revelation or site of sacred presence. Although presented in a variety of ways, human stewardship of this divine creation is part of the religious practitioner’s job description.

While hard science is needed to predict and study the physical properties and changes of the earth, anthropogenic environmental problems also require a close study of the beliefs and actions of those driving the environmental change. GreenFaith is calling on environmental leaders to not only preach good environmental standards, but to act on them. Through the GreenFaith certification program, congregations across the nation have reduced carbon emissions by 30 to 50 percent, financed solar energy programs, and decreased water consumption, to name a few.

GreenFaith has used lessons garnered from PEI to attract new congregations to their certification program by touting the benefits of financial savings. Economic incentives are therefore a major driving force in the “greening” of congregations. Harper points out that economics and religion, counter to popular belief, really are working toward the same objective: human flourishing.

“In the end, GreenFaith isn’t just about teaching people that God wants a healthy environment,” said Harper. “It’s about mobilizing the faith-based sector – one of the largest social networks in the country – to make it actually happen. PERC has helped us understand new tools and perspectives on how to achieve this goal.”

*See the Yale Forum on Religion and Ecology for further reference

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Meet Jeremy Gingerich, PERC Enviropreneur

After two weeks of workshops, mentoring sessions, and networking, this year’s 14 enviropreneurs head home to implement the innovative market-based conservation strategies they explored at PERC’s 2012 Enviropreneur Institute. Check out what one enviropreneur, Jeremy Gingerich, has to say about protecting open landscapes in the west and how his time at the Enviropreneur Institute will help him achieve his goals.

 

For more on PERC’s Enviropreneur Institute, visit our Facebook page for pictures from this year’s incredible group.

Don’t know what an enviropreneur is? Find out here.

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Celebrating Humanity in the Environment

A curious model for conservation is taking the stage. It is grounded in protecting landscapes and species but adds humans to the mix. Though not a new idea, it is often dismissed, even discouraged, by environmental thinkers. This conservation ethic has the power to enhance resource stewardship and environmental quality.

The new paradigm acknowledges humans as an important part of nature and is grounded in a realistic view of the state of the world. The resilience of nature is recognized with an understanding that some places are more fragile than others. The idea concedes that increased conservation will come when people personally recognize the benefits. This ethic has been supported by three iconic conservation players.

Patrick Moore, a co-founder of Greenpeace, was raised in a logging community and earned a PhD in resource ecology and forestry. “The central teaching of ecology is that we are part of nature and interdependent with it,” writes Moore in his 1995 book, Pacific Spirit. He believes that both protected forests and managed forests involve human action, which can enhance the benefits provided to society.

Fifteen years after its founding, Moore parted with Greenpeace. He was disturbed by the misinformation that was being disseminated and the unwillingness of organization leaders to compromise to work toward realistic solutions. Abject opposition to logging is one case in point. Stiff regulations can make forests a liability by decreasing permissible harvest and increasing management costs. Moore sees the forest and the trees that provide habitat, ecosystem services, and wood products. Trees are renewable and through proper forest management we can harvest timber while enhancing environmental quality.

Using statistical information Bjorn Lomborg, a statistician, has systematically analyzed global environmental issues. As a student, Lomborg was pessimistic about the future of the environment. He also was once a Greenpeace supporter. Following years of data collection and analysis, Lomborg changed his tune. “We are not overexploiting our renewable resources,” he writes in his 2001 book, The Skeptical Environmentalist. Though we often hear otherwise, his analysis shows that global forest coverage has not changed much in the last 50 years. He also believes that “there do not seem to be any serious problems with the nonrenewable resources.” Although some regions are better cared for than others, there are more reasons for optimism than pessimism. Lomborg concludes that we are living in a healthier, wealthier, and cleaner environment than ever before thanks to human innovation.

Similar to Lomborg and Moore, Peter Kareiva puts humans at the center of conservation. Kareiva is the chief scientist for The Nature Conservancy, the world’s largest conservation organization. He sees a global landscape that has been touched by humans. The only conservation that makes sense to Kareiva is one that considers human needs and desires. “Protecting biodiversity for its own sake has not worked,” he co-writes in the Fall 2011 issue of Breakthrough Journal. To enhance conservation in today’s world requires us to “embrace human development” and “to integrate the value of nature’s benefits into [corporations] operations and cultures.”

It is time for conservationists from all walks to shed old paradigms of doom and gloom and look at the world as it really is. Though humans have touched nearly every place on earth, our increased prosperity has brought enhanced environmental quality. We are all a part of nature and nature will be as we steward it. Therefore, incentives for conservation must be aligned with human needs and good stewardship.

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Where Free Markets Meet Faith

In contrast to the historical ideal of Manifest Destiny, in which the conquest of the land was held to be a biblical right imbued to God’s loyal followers, a contemporary breed of religious practitioners are working to combine faith and ecology in new ways. Often found under the movements entitled “ecotheology” or “green faith,” religious practitioners of all denominations and creeds are acting to conserve what they consider to be God’s creation, following tenets many believe are already in line with their religious practices.

PERC Enviropreneur Institute graduates Fletcher Harper (‘07) and Stacey Kennealy (‘10) are looking to these religious groups to take action and work toward improving environmental quality. While there doesn’t seem to be much in common between those placing their faith in markets and those putting faith in the divine, Harper and Kennealy’s interfaith coalition, GreenFaith, recognizes that incentives matter.

GreenFaith’s mission is to inspire, educate, and mobilize people of religious backgrounds to protect the earth as a moral and sacred responsibility. As Paul Schwennesen writes in the latest issue of PERC Reports, however, “simply insisting that people ‘do what’s right’ doesn’t capture the full measure of GreenFaith’s work; the group calls for their members to address the mundane as well as the celestial. Values need to be specific and actionable.”

Thus, GreenFaith has used lessons garnered from PEI to attract new congregations to their Certification Program by touting the benefits of financial savings, as well as engaging new and younger members. The major force driving GreenFaith’s success, therefore, has not been morals, but the promise of growth – and this strategy is having success.

“In the end, GreenFaith isn’t just about teaching people that God wants a healthy environment,” said Harper. “It’s about mobilizing the faith-based sector – one of the largest social networks in the country – to make it actually happen. PERC has helped us understand new tools and perspectives on how to achieve this goal.”

Read the full article here in the spring issue of PERC Reports.

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Who Owns the Truffula Forest?

The Lorax, a Dr. Seuss classic, is hitting the big screen this weekend. The Lorax is an odd, little character that intrepidly opposes a thneed manufacturing plant (whatever that is!) run by the Oncelor.

Similar to most environmental story plots, this one has a good environmentalist, the Lorax, that holds the moral high ground and a bad, greedy, profit mongering, capitalist, the Oncelor. In this story the Oncelor produces thneeds that appear to be in high demand. During production he clear cuts every last Trufulla tree, smogs the air, and clogs the water. As a result of the Oncelor’s insensitive activities the Brown Bar-ba-loots go hungry for there is no more Truffala fruit, the Swomee Swans can no longer croak a note, and the gills of the Humming Fish have become gummed. All in the name of profit. This, in the end, is also lost because the Oncelor puts himself out of business by extricating every last Truffala tree which are a needed input for thneed production.

In his strategy to garner attention for conservation, Dr. Suess misses the fundamental motivator: incentives. Industry and profit are not necessarily bad and harmful to the environment. Environmental problems are the result of conflicting demands on resources. Given well specified rights, negotiation will motivate the highest valued resource use. If the Truffala forest was open access for anyone to cut, it is possible that the Oncelor and others would race to harvest every last tree. Given ownership, however, the Oncelor is more likely to invest in future trees to ensure the possibility of future production. Weyerhaeuser, for example, is proud to announce that they plant millions of trees every year. They do so not to prove their conservation ethic, rather as an investment in timber for future production.

A bit of green PR doesn’t hurt, either. The list of movie sponsors is a bit surprising, to say the least. As you can imagine, the motivator of many of these sponsors is not just good green ethics as much as good for the bottom line. And that’s OK. If you want to change behavior, change the incentives. Profit is a good motivator. If you want to understand the fundamentals of environmental problems look at the property rights and follow the incentives. Well specified property rights encourage long-term stewardship and ensure accountability. That is the moral of my story.

I have not yet seen “The Lorax” movie but will think about how the storyline may differ given well specified property rights when I do. Indeed, the global trend over several decades has been better property rights, more economic freedoms, and increased prosperity. I do care about the environment, both near and far. And I see things getting better, they really are!

Originally posted at Environmental Trends.

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Trade a Tortoise

Two years ago in PERC Reports Todd Gartner wrote about his efforts at “helping the American Forest Foundation develop a market-based habitat credit trading system in portions of Georgia and Alabama. The incentive-based framework will complement other efforts in the region to keep the eastern population of the gopher tortoise off the Endangered Species list.”

Today, Gartner, in collaboration with Josh Donlan and James Mulligan of Advanced Conservation Strategies, are ready to launch their first pilot transactions.

Here is how the gopher tortoise candidate conservation marketplace is being designed and piloted:

  • An interested and eligible private landowner (the “seller”) receives a negotiated payment to conserve, manage, or restore longleaf pine forests capable of supporting healthy populations of gopher tortoises on his or her property. In so doing, the landowner generates gopher tortoise habitat credits.
  • The entity paying the landowner (the “buyer”) receives the habitat credits in return. The buyer may use the credits to offset the impact on gopher tortoise habitat elsewhere, in order to meet a voluntary net zero biodiversity impact commitment.  Or, the buyer can save the credits for later use to meet offset requirements if the species is listed under the ESA. Other buyers may purchase credits simply to spur gopher tortoise conservation.
  • A gopher tortoise habitat credit is the currency that can be bought and sold. The number of credits on a parcel of land is determined via a science-based and peer-reviewed method to ensure a net conservation benefit for the tortoise when used as offsets for future impacts. The credit price includes funds to manage and monitor the habitat, along with a negotiated profit margin for the seller.
  • The USFWS approves the crediting methodology and maintains agreements with buyers and sellers. The agency may also provide federal-level assurances to both the buyer and seller. This regulatory certainty allows buyers to preemptively buy credits that can be used toward offsetting future impacts if the species were to be listed.

With 87 percent of southern forests in private ownership, protecting species like the gopher tortoise requires an innovative approach. The gopher tortoise conservation marketplace is testing a new strategy, which provides financial incentives to private landowners who manage their woodlands for habitat and candidate species.

If you would like to learn more about market-based approaches for conservation, such as the approach Gartner began formulating as a PERC Enviropreneur Fellow, then apply to PERC’s Enviropreneur Institute by March 5.

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The 10,000 Mile Diet

Publishers Weekly recommends The Locavore’s Dilemma: In Praise of the 10,000 Mile Diet, co-authored by former PERC fellows Pierre Desrochers and Hiroko Shimizu, as a book to watch for in 2012.

Check out Shimizu’s piece in  PERC Reports where she outlines three myths about eating local.

  • Myth 1: Eating locally produced food reduces our environmental impact.
  • Myth 2: Local food is inherently safer.
  • Myth 3: Local food promotes economic growth and social justice.

“In short, the best way to reduce the carbon footprint of agricultural production is to produce food where it can be done most efficiently and to engage in international trade. Selecting food based on its affordability, availability, and quality is a better way to help the planet than focusing on food miles.”

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Hunting Endangered Species

The scimitar horned oryx, the addax, the dama gazelle – endangered animals one would expect to encounter in Africa. Yet, as some Texas ranches are proving, helping to bring back large numbers of these endangered species can be a profitable pastime. As this 60 Minutes segment shows, by allowing a number of these animals to be hunted for a high price, exotic wildlife ranches have achieved a major feat in wildlife conservation. A billion dollar industry, supporting more than 14,000 jobs, exotic ranches have worked to bolster the populations of approximately 125 different endangered species.


The funds collected from hunting a small percentage of the endangered animals gives ranchers the money they need to continue to run their ranches. Thus, hunting endangered species in Texas has provided economic incentives for ranchers to continue to conserve and protect the species.

Read Terry Anderson and Shawn Regan’s article, “Shoot an Elephant, Save a Community,” to see how assigning economic value to animals in Africa is also working to conserve wildlife.

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The Case for Economics and the Environment

Don’t miss Gernot Wagner’s latest piece in the Washington Post. Wagner teaches at Columbia, is the author of But Will the Planet Notice? How Smart Economics Can Save the World, and is an economist at the Environmental Defense Fund.

Wagner points out that it has become acceptable to say that markets don’t work, just look at “the demise of Lehman Brothers and the subsequent swoon of the global economy.”

The next time you hear someone say this, you can tell them they’re wrong for two reasons: Lehman Brothers is more a symptom of what happened rather than the underlying cause, and it was guided by much larger forces than itself. Markets, in fact, work all too well. They are an aggregator of wishes and desires, however misguided they may be.

Furthermore, how can we say that markets don’t work when we are “far from having anything approaching a free market?”

Fossil fuel subsidies and various other loopholes and distortions make the playing field uneven. More significantly, we violate one of the most basic tenets of economics, that there is no free lunch. In reality, it turns out, we all get a steady stream of free passes. It starts in the financial sector, where the benefits of bankers’ actions are often and almost entirely privatized: They pocket the bonus if the bet pays off. But the costs are socialized: Bankers pay but a tiny fraction of the costs of their failed bets; society pays. The fundamental mismatch, as evidenced by the collapse of Lehman Brothers, has enormous consequences for the rest of us.

So what can be done? Perhaps more people should study economics. When people think about economics, Wagner writes, “their minds turn to business and finance. But economics goes beyond these fields, and the difference between business and economics goes beyond size.” Economics is about a way of thinking.  “Economics is organized common sense,” and as Wagner points out, “If there is anything we need right now to guide our economy and the planet out of this dual malaise, it’s more common sense.”

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Happy Holidays and Merry Christmas!

  ‘Tis The Season

When PERC opened its doors in 1980, free market environmentalism (FME) was considered an oxymoron; environmentalists saw markets as an enemy, not an ally. Now, thanks to PERC, the largest and oldest think-tank focusing on market solutions to environmental problems, FME is being tried and tested around the world. In Africa, private land owners are protecting rhinos from poaching; in the Caribbean an alumnus of PERC’s Enviropreneur Institute (PEI) is working to help replant and regenerate dying coral reefs; and in the Gulf of Mexico, the Environmental Defense Fund has joined PERC in campaigning for property rights solutions to overfishing.

At 45°N and 4,820 feet elevation, PERC needs your help to keep its dedicated PERC staff warm this winter season!  Your tax-deductible gift will help fund innovative research, convene conferences, publish the results in PERC Reports and other venues, and add to the growing number of environmentalists implementing PERC’s ideas.

Here are some specific things that your donation to PERC can accomplish:

  • $25 will cover the cost of producing and distributing PERC Reports to one reader for one year;
  • $100 will pay for printing and distributing a PERC Case Study to 100 people;
  • $2,000 will provide a scholarship for a student to participate in PERC’s summer programs;
  • $5,000 will pay for a Lone Mountain Fellowship, which brings a professor to visit PERC;
  • $15,000 will give an environmental entrepreneur an opportunity to attend PEI and learn to apply FME to their work.

I assure you that your tax-deductible contribution will promote environmental quality with less government and more individual freedom. Now is the moment when improving the environment by utilizing property rights and markets rather than big government can truly benefit America as the nation works to deal with its fiscal crisis.

Sincerely,

Terry L. Anderson

Executive Director

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Christmas Trees: Real or Fake?

It is the time of year for the seasonal debate over the family Christmas tree: live or artificial? A live tree means removing a tree from the forest, or tree plantation, as it may be. A fake tree is usually an import from a foreign factory.

About 30 million live Christmas trees are sold in the US every year. That is a lot of trees. But do not fear! Our Christmas tree harvesting activities result in growing more trees, not less. Two or three seedlings are planted for nearly every single Christmas tree cut. Christmas tree plantations cover 350,000 acres of land in the US and are growing about 350 million trees. As long as people continue to demand a fresh tree at Christmas, farmers will continue to provide them.

While it is still popular in some regions, such as here in Montana, to head to the local National Forest to cut a tree, the majority of Christmas trees are grown on tree farms. Regardless, Forest Service permits to harvest a tree are issued to help manage the forest under agency guidelines.

At seasons end, real trees can be recycled and used for making everything from mulch to medicines, or to enhance wildlife habitat and prevent erosion. They can be cut into firewood and burned for home heat or as the centerpiece for your next weenie roast. They are even used as biomass to create energy.

Alternatively, you can buy a fake tree that is probably made in China. Artificial trees are not biodegradable, nor are they a good fuel source.

If Christmas is your holiday and you desire a tree, buy your Christmas tree with pride knowing that by purchasing a tree you are helping to plant several more.

Originally posted at Environmental Trends.

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Q&A with Steven Medema on the Coase Theorem and Environmental Economics

There has been plenty of confusion surrounding the work of Ronald Coase since his article “The Problem of Social Cost” appeared in 1960 – so much, in fact, that two scholars wrote in 1992 that the so-called Coase theorem has “generated a negative externality for economists.” To clear up some of the confusion, we talked with Steven Medema for the next installment of PERC’s Q&A series.

Few know more about the legendary economist and his impact on economic thought than Steven Medema. He is the author of many books and scholarly articles on the history of twentieth-century economics, with an emphasis on the work of Ronald Coase. His latest book, The Hesitant Hand: Taming Self-Interest in the History of Economic Ideas, was awarded the 2010 Book Prize by the European Society for the History of Economic Thought.

Medema is a professor of economics at the University of Colorado Denver and a 2011 PERC Lone Mountain fellow. For more of PERC’s Q&As, see the series archive.

Q: Ronald Coase’s 1960 article on “The Problem of Social Cost” had a tremendous impact on economics, including PERC’s work on free market environmentalism. What is the “Coase theorem” and how has it evolved in economic thought?

A: The Coase theorem tells us that if property rights over the relevant resources are well-defined and the costs of transacting are zero, parties who disagree over the use of those resources will negotiate to an efficient solution, regardless of to whom the property rights are assigned. The upshot of the theorem is that private negotiations or other market-like processes can efficiently resolve social cost (“externality”) problems such as those associated with air and water pollution. Of course, transaction costs are never zero, and much of the discussion of the theorem over the years has attempted to work out the possibilities and limitations of negotiated solutions when transaction costs are positive. Though much of the early reaction to the theorem was negative, the discussion has evolved into one that focuses somewhat less on the theorem per se (that is, with its highly restrictive assumptions) and somewhat more on departures from these conditions and how Coase-theorem-like processes may be operative under more realistic conditions.

Q: Over the years, people have come to refer to a hypothetical world of zero transaction costs as a “Coasian world.” Is this view accurate?

A: Those who refer to such a world haven’t read Coase very closely. The world of zero transaction costs is a fiction—but a sometimes useful fiction, not unlike a vacuum in physics. It was also a bedrock assumption of mainstream economics for ages, including of the economics against which Coase was reacting in “The Problem of Social Cost.” What Coase showed was that, in the world of neoclassical economics, government regulation was unnecessary for an efficient resolution of social cost problems. If property rights are assigned over the resources in question and there are no costs of transacting, the parties will efficiently resolve the problem through negotiation. So, Pigovian remedies are unnecessary in a Pigovian (costless transacting) world. But Coase’s emphasis was on the fact that the costs of transacting are not zero, and nor are the costs associated with government action to deal with social cost problems. The evaluation of how society should deal with such problems thus involves a comparison of the benefits and costs of alternative courses of action—including the possibility of allowing the problem to persist if the costs of “curing” it are worse than the disease itself.

Q: We hear a lot about the Coase theorem in environmental economics. How has the Coase theorem impacted discussions of environmental economics and environmental policy?

A: I think that its central impact has been in the way of making scholars—and later policy makers—aware of the possibility of using the exchange process to deal with social cost issues. Of course, the Coase theorem is an idealized construct that does not reflect the world in which we live. But by showing how property-rights-based solutions can generate private, efficiency-enhancing moves, the theorem opened the door to the subsequent analysis of exchange solutions in the real world, and thus to both theories and policies that employ such a framework.

Q: You suggest that the Coase theorem is widely recognized among environmental economists and taught in most textbooks, yet its relevance is often viewed as extremely limited. Why is this so? Why then are so many environmental economists interested in Coase?

A:  My sense is that most environmental economists see Coase as important because he emphasized that social cost problems are ultimately problems related to incomplete property rights. This makes Coase’s analysis the natural starting point for the analysis of social cost issues. The rub comes in where one goes from there. Some continue to hew to what we might call a “Pigovian” line—emphasizing that regulatory mechanisms or taxes are necessary to correct the problem—while others are more interested in exploring whether markets or market-like mechanisms can be utilized to resolve the problem. But there is broad general agreement that social cost problems have their roots on the property rights side, and this viewpoint owes to Coase.

Q: Discussions of environmental economics often center around externalities. Coase avoids this term. How has Coase’s work influenced the way we think about external costs?

A: My sense is that, at a minimum, he impressed upon some that social cost problems, or externalities, are reciprocal in nature. One can view this in two ways. First, it takes two to tango. That is, if A is generating smoke that harms B, B may be said to be as much the “cause” of the harm as A, since B could mitigate damages by, e.g., moving away. Second, A may be imposing harm on B, but to restrain A’s activity in favor of B is to impose harm on A. Some see this as a “right-wing” sort of point, but it is not. It actually has a long history in jurisprudence and was held by none other than J.R. Commons, a prominent Institutionalist economist and Progressive in who worked during the first half of the twentieth century. But value judgments often get in the way of sound reasoning when it comes to things like externalities, so not everyone has gotten on board with Coase’s notion of reciprocity.

Q: Critics of Coase often contend that transaction costs in markets are too high for Coasian-type bargaining to occur: negotiations can be costly, multiple parties can be affected, and information is diffuse. This is no doubt often the case, yet transaction costs are also present in the political process. How do these costs affect the way we understand Coase’s relevancy to environmental policy?

A: If one adopts an efficiency-based perspective on these things, the point to be taken is that there is no such thing as a determinate optimal solution to social cost problems. One can only come to grips with these things on a case-by-case basis, weighing the benefits and costs associated with alternative courses of action and recognizing that both markets/exchange and government activity have associated with them certain costs—often substantial. Coase is not about the Coase theorem; he was a strong advocate of comparative institutional analysis and that, at a minimum, economic benefits and costs have an important role to play in evaluating policy options. With this came a great concern about the costs associated with government action—costs that he (rightly) believed had been underplayed or ignored in the theory and practice of social cost policy.

Q: Why are concerns about equity so prominent in environmental discussions of Coase?

A: Probably because Coase focused so heavily on efficiency. But there was good reason for this—it was the language in which the welfare economics of social cost issues had been discussed for a half-century. And as we all know, there are plenty of occasions when the dictates of efficiency collide with some people’s sense of what is “right.” The very possibility that the “victims” of pollution should bribe the factory owners to reduce their pollution levels is anathema to many. Interestingly, though, Coase talks about larger concerns (“aesthetics and morals”) toward the end of “The Problem of Social Cost.” But since most readers failed to pay attention to his arguments beyond the Coase theorem material (the first 15 pages of a 44-page article), they didn’t seem to notice this.

Q: What can we take away from Coase’s work and apply to the area of free market environmentalism?

A: I believe that there are two key insights. The first is that markets/exchange can work to resolve certain social cost issues. The question is which ones, and this can only emerge from careful and patient study. The second is that neither markets nor government are panaceas. Both generate imperfect solutions, and the question is that of which of these imperfect solutions is best for dealing with the problem at hand. This, too, can only be determined from careful and patient study. Unfortunately, too many economists and policy makers do not want to hear such things. But “create markets” or “we need government to solve the problem” takes us nowhere. These are difficult problems, and we seldom find that difficult problems have easy solutions.