Lessons From the Old West: Don’t Ban It, Brand It

Last Saturday was roundup and branding day at my ranch in the Madison River Valley, about 20 miles west of Bozeman. Neighbors came to help and I put the P J (my registered brand) on the left side of my calves. As I carefully placed the irons on each calf (yes, they are hot, and yes, there is short term pain but it seems to subside quickly) I was reminded of why branding came to work so well in the West.

In the old West a statewide registration of brands developed rapidly. Often a brand registration system was one of the first pieces of legislation a territory would pass (for more details, see Anderson and Hill’s The Not So Wild, Wild West). Those registrations continue today. You can go to the Montana Brand Registry and find that if a cow has a P on the left rib and a J on the left hip, that cow belongs to the P J Ranch. Or, a PJ on the left shoulder of a horse establishes my clear claim to that horse. I can issue you a bill of sale if you buy one of my horses or cows, and that serves a proof of a legitimate transfer of rights.

This system works well for the people in white hats, my neighbors who want to know who a stray belongs to, and against those in black hats, the rustlers who might want to steal my livestock. The state maintains the registration and enforces ownership claims. And I can use the existing court system to enforce my property rights.

Branding cattle and horses carries important lessons for environmental problems, namely that we should move towards greater branding of transitory resources, particularly air and water. This would help both the white hats, people who behave responsibly, and constrain the black hats, the villains that dump their waste on other people’s property. PERC has outlined how this can be done with marine fisherieswater markets, and other resources, but, unfortunately, environmental regulations have focused more on command and control than on lowering the costs of measuring and monitoring pollution. If only a fraction of the money that is spent on formulating, enforcing, and complying with environmental regulations was devoted to developing branding technology we would be much better off.

Atrazine is a common chemical used to control broad leaf weeds. Its widespread application in the Midwest has caused concern over its presence in drinking water. Should atrazine be banned, as it has been in most of Europe? Used correctly, atrazine is a cheap way of lowering the cost of food production. Instead of banning it, why not brand it? One could require every user to of atrazine to have, at the time of purchase, a particular tracer placed in his or her container of pesticide. A registration of users would be maintained by the state. Then if levels of atrazine in drinking water exceed a specified level, those harmed (and proof of harm is an important part of common law remedies) could take those responsible to court.

Of course the use of tracers must be coupled with a common-sense understanding that “the dose makes the poison.” We now have the ability to measure extremely minute amounts of potentially harmful chemicals in our air and water. The fact that atrazine may be measured in ground water doesn’t necessarily mean harm has been done. If one of my cows sticks her head through the fence and eats a mouthful of grass, I may owe my neighbor a couple of pennies. But my neighbor shouldn’t be able to shut down my entire ranching operation.

Notice that branding doesn’t remove the state from the scene, but instead focuses its coercive power on the definition and enforcement of property rights, which penalizes those who act irresponsibly and rewards those who don’t infringe on the property rights of others. Having my cattle branded reduces the transaction costs of running a responsible ranching operation. Branding pesticides and herbicides would have the same positive effect on environmental quality.


Silent Spring at 50: Reexamining Rachel Carson’s Classic

After 50 years, Silent Spring is rarely read, but it is routinely cited as a canonical work in environmentalism. Rachel Carson is hailed as a near saint in the environmental movement. There is no doubt the book played a major role helping to spur the environmental movement in the 1960s.

A careful reading of Silent Spring, however, will leave one dismayed at the relentless negative view Rachel Carson had of a time of unprecedented prosperity and improved health standards. We joined a group of authors from various disciplines who looked at different aspects of the book in historical context. That book, Silent Spring at 50, will be published in September. PERC’s latest publication, “Silent Spring at 50: Reflections on an Environmental Classic,” gives a sample of the full work.

Among the issues discussed in the book are the following:

1. Pesticides often benefit both human well-being and the environment. When discussing the effects of pesticides, Carson was entirely negative, failing to consider how these products greatly expand agricultural output, thereby allowing less land to be dedicated to cultivation, as well as having saved millions from starvation in the decade before her book was published. Her claims, such as that one might die from exposure to one molecule of a pesticide, are presented as if scientific fact. Carson ignored the reductions in habitat loss, increased no-till farming, reduced erosion and agricultural runoff that can be attributed to increased use of pesticides.

2. Bird populations were not decreasing.  Silent Spring is most famous for what its title evokes—a spring with no birds, as they have all died due to pesticides. Yet Carson ignored well-known Audubon Society data that indicated increasing, not declining, bird populations in some locations she identified (see brown thrasher chart below). Could she have been unaware of the data? Not likely, since she was a long-time active member of Audubon.

3. There was no cancer epidemic. Carson asserted that one person in four in the United States would die of cancer, and that cancer was becoming epidemic in children, despite public health data to the contrary. American life expectancy had risen more than 20 years in the 20th century when Carson was writing, but she only discussed impending doom. It is true that more Americans were dying of cancer when her book was published than had in previous decades, but that was because Americans no longer died of other diseases. They were lucky enough, as we are now, to have lived long enough to die of cancer and other diseases that mostly afflict the old. Despite the furor in those days of the impending Surgeon General report on tobacco, Carson ignored the role of smoking in cancer. She never mentioned the widely-available evidence about tobacco, preferring to blame man-made chemicals for cancer.

Like her successors who consistently forecast doom for the planet and its inhabitants, Silent Spring is alarmist and suffers from technophobia. It resolutely refused to recognize the billions of people, us among them, whose lives have been so greatly improved by the blessings of modern technology.


Q&A with Michael Higuera on Enviropreneurship and Land Conservation

This summer PERC welcomed sixteen conservationists from around the world for its 11th annual Enviropreneur Institute. The program works with environmental entrepreneurs, or enviropreneurs, who seek a better understanding of how business and economic principles can be applied to environmental problems. For two weeks, participants have the opportunity to interact with leading experts in the field of free market environmentalism, including those who have researched and applied markets and property rights in their environmental work.

Michael Higuera of The Nature Conservancy attended this year’s program. He works for TNC in Boulder, Colorado, where he protects land through conservation transactions across the state. Michael began his career practicing transactional law in Denver, but discovered that finding solutions and bringing people together resonated with him more than the process of litigation. We thank him for answering our questions. For more of PERC’s Q&A series, see the Q&A archives.

Q: What types of conservation transactions are you currently facilitating?

A: I am primarily responsible for obtaining conservation easements on large ranches (over 10,000 acres) in eastern Colorado in order to preserve shortgrass prairie and protect native bird and wildlife species.  These transactions are funded by private donations, landowner donations, and public funds from sources such as the lottery, the Division of Wildlife, and federal programs.  In addition to that responsibility, I am working with a small group of people to determine ways to bring private capital into our conservation work and land transactions.  We have been exploring ways to engage the private sector in acquiring properties with significant biodiversity value and are considering using an investment vehicle such as a real estate investment fund. The fund would manage the properties for a profit while also protecting their biodiversity by placing a conservation easement on the land.  The sale of the conservation easement would help the fund acquire the property at a lower basis thereby increasing the operating return on its investment.  Similarly, my project at PERC’s PEI program sought to find ways to work with oil companies to manage drilling operations in an environmentally sensitive manner.  The common element between the real estate fund and the oil company ideas is finding market-based incentives that make it attractive for those ventures to promote conservation on their properties.

Q: What might some incentives be for the companies to conserve land tracts used in part for drilling?

A:  We cannot use a conservation easement to address drilling for oil because mineral rights are very different than surface rights which can be protected by easements, but my idea was inspired by the success of the conservation easement as way to facilitate the acquisition of property rights that are valuable to TNC’s mission to protect biodiversity.  The crux of my project at PEI was exploring ways to create incentives for oil companies to work with conservation organizations like TNC to plan their projects to avoid sensitive areas and minimize impacts.  The most ambitious way to do that would be for companies to create a product that is differentiated in the marketplace from others by the way in which it was extracted.  We certainly see this in the organic food market, fair trade certifications, and in the forestry markets.  Unlike the conservation easement model that relies in part on public funding and tax incentives, this model would rely on the consumer to pay for the conservation benefits.

A conservation drilling plan would provide protections for biodiversity. which is a win for TNC and others who value nature.  It could also be a win for the oil company by allowing them to differentiate their product, increase market share, and command a premium at the pump.  Consumers who want to be part of the solution would win too.

Q. You’ve discussed the possibility of an eventual fourth pump at gas stations nationwide.  What would this new “conservation gasoline” be, and how would it work?

A:  The fourth pump is really the home run for this idea and represents something that I think needs to happen in conservation more generally.  It represents a way to empower consumers with choices.  If conservation is important to people, then people need to step up and vote with their dollars.  Part of the reason that I have come to this conclusion is because I have more faith in people’s ability to make change through the market than at the ballot box.  The lobbying efforts of the oil industry have proven pretty effective at limiting new regulations.  Consumer demand and pressure at companies such as Walmart (that’s now carrying organic food and taking steps to be energy efficient) have resulted in some amazing changes that I do not think could have originated from a legislative process.  Another reason this kind of consumer or market-generated conservation has the potential to be so powerful is because it creates self-funded conservation that does not rely on public funding and, if it is successful, it ends up being replicated by competitors who see that it creates value.  This kind of domino effect is where you really end up having change happen on its own and at scale.  This will also become more important as we enter a time period of less and less government spending in response to the budget crisis.

Q. What challenges lie ahead in creating market incentives for oil companies to conserve land?

A:  There are a lot of challenges but the fun thing about working at an organization like TNC is that the possibilities for results at scale are what drive and inspire us, not the hurdles that lie ahead.  I think that the primary challenges are building a cooperative relationship with an industry that has not seen it in its interest to proactively work to promote conservation.  Another key challenge will be developing a market for this type of product in a market space that did not previously exist.  It will be critically important to create a market that has a mechanism to assure consumers that their dollars are making a difference on the ground and really advancing conservation while at the same time that mechanism needs to be user friendly for the oil companies.

Q: What did you take away from PERC’s Enviropreneur Institute that will help you with developing your project?  

A:  I came away from PERC with a fresh way of looking at problems and new tools for doing so.  Additionally, I forged relationships with a great network of people who renewed my enthusiasm for my work and with whom I hope to collaborate in the future.  I think PERC also helped deepen my understanding of markets, incentives, and property rights as a way to advance conservation.

For more from Michael Higuera, see his earlier post “What does it mean to be an environmentalist?