Regulating Biodiversity: Tragedy in the Political Commons

David Laband teaches natural resources economics and policy at the Forest Policy Center in the School of Forestry and Wildlife Sciences at Auburn University.

Last summer, lightning struck and killed an enormous pine tree on one side of my backyard. At about the same time, voracious pine bark beetles girdled and killed an equally impressive pine tree on the other side. Now bereft of needles, these two arboreal giants pose a potential threat to my house: if they were to fall at just the right angle, the damage could be substantial. In the interest of safety, my wife wants to have the trees removed; for the sake of promoting biodiversity on my two-acre lot, I do not.

Our personal dilemma mirrors a much larger struggle that quietly threatens to destroy the rights of private timberland owners across the United States—the desire of urban dwellers to have their cake and eat it too. They demand houses made of wood, wood furniture, paper and paper products, and so on, while also demanding environmental amenities such as aesthetically pleasing landscape views, biodiversity, and animal habitat. At a personal level this can’t be done. If the trees are removed, my wife has peace of mind, but the many animals that depend on dead pine trees for their existence, either directly or indirectly, will vanish. If the trees stay, we will be promoting the ecological diversity of our property, but my wife will worry about our house with every gust of wind. We can’t have it both ways. Similarly, at a macro level, there is a tradeoff between production/consumption of timber and production/consumption of related environmental amenities.

The Role of Intensively Managed Forests

The problem of how to grow and harvest increasing amounts of timber while simultaneously producing a steadily increasing array and level of environmental amenities associated with forested land has resulted in an industry-wide discussion of how to simultaneously achieve both objectives. There is a growing appreciation within the forestry community for the prospect that intensively managed forests may yield increasing amounts of wood while minimizing the total acreage from which wood is harvested. This maximizes the amount of acreage available to meet other demands—such as agricultural production, animal habitat, and other environmental amenities associated with natural forests.

However, intensively managed forests have come under heavy fire from self-proclaimed environmentalists. In these so-called plantation forests, man, not nature, regenerates the trees, which accordingly grow in even-aged stands. Their well-being is affected by the application of herbicides and pesticides, as well as by occasional thinning and fire management. In contrast to naturally (re)generated timberland, plantation timberland has been described as an “ecological desert,” with the stated or implied conclusion that the nature and extent of biological diversity associated with natural forests is both greater and therefore more desirable than that associated with plantation forests.¹

The Threat to Private Landowners and Social Welfare

Such pejorative rhetoric is both misleading and counterproductive. The unfortunate but nonetheless compelling truth is that we can’t have our cake and eat it too. We must make responsible choices about what to produce and how to produce it. A serious threat to private landowners develops when citizens living in urban areas demand that private owners of timberland (definitionally located in rural areas) produce environmental amenities such as aesthetically pleasing views, biodiversity, animal habitat, and the like, provided the urbanites don’t have to pay for it.

Further, they seek to enforce their demands by using the political process to pass regulations that require landowners disproportionately to bear the cost of producing these environmental amenities. For example, Oregon law requires private timberland owners to replant within two years areas from which they cut trees. Other regulations forbid clear-cutting of timberland. Federal regulations pertaining to endangered species are incredibly restrictive and intrusive with respect to an individual’s property rights. The pursuit of environmental amenities that we are told are vital to some vaguely defined public interest through policies that impose virtually all the costs on relatively small numbers of private landowners generates what might be termed a “tragedy of the political commons.”

Garrett Hardin introduced us to the tragedy of the commons.² Hardin developed a stylized example of a communal pasture open to all comers. There are no private property rights to the pasture, or rules, customs, or norms for shared use. In this setting, each shepherd, seeking to maximize the value of his holdings, keeps adding sheep to his flock as long as doing so adds an increment of gain. Further, the shepherds graze their sheep on the commons as long as the pasture provides any sustenance. Ignorant of the effects of their individual actions on the others, the shepherds collectively (and innocently) destroy the pasture. As Hardin concludes: “Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in freedom of the commons.”

Man’s exploitation of the political commons is analogous to his exploitation of natural-resource commons. Our majority-rule voting process, which permits a majority of citizens to impose differential costs on the minority, encourages overprotection of endangered species, and overproduction of biodiversity, animal habitat, and landscape views. This occurs because each individual who bears a negligible portion of the costs of providing environmental amenities has a private incentive to keep demanding additional environmental protections as long as there is any perceived marginal benefit. As with the overgrazed pasture, the result of overprotecting Bambi is, as has become apparent all over the eastern United States, disastrous. Moreover, and not surprisingly, we are starting to hear real concern voiced about the recent proliferation of other animal species such as black bears, mountain lions, and coyotes. We are creating social tragedies that result from the political commons.

The tragedy is compounded by the incentives generated for private landowners by the heavy hand of command-and-control policies. When government abrogates property rights without compensation, landowners have strong incentives to mitigate their expected losses. They can do so by changing their land use from timber production to housing or commercial development. There is no incentive to promote habitat for endangered species; doing so means only that use of one’s land will be seriously compromised by the highly restrictive provisions of the Endangered Species Act.

Instead, a landowner who finds a member of an endangered species on his property has a well-understood incentive to “shoot, shovel, and shut up.” Such behaviors are not likely to further environmental objectives.

Other People’s Costs

It is relatively easy to demonstrate that because private timberland owners bear the cost of producing biodiversity, nonland-owners demand excessive amounts of it. The first point to be made in this regard is that urbanites do not in fact place a high value on biodiversity. One need look no further than the readily observable behavior of urbanites for proof of this claim. Urbanites have the ability and prerogative to produce biodiversity on their own residential property. That is, they could let their residential lots grow wild with natural flora and fauna. This would, without question, promote ecological diversity. In practice, virtually no residential property owners, living anywhere in the United States, do this. Instead, they invest (implicitly through their time and explicitly by purchase) hundreds, if not thousands, of dollars annually in the care and maintenance of their lawns and grounds in a decidedly unnatural state. Like owners of intensively managed timberland, owners of residential property chemically treat and harvest the growth on their property. In so doing, they create a landscape with relatively little floral or faunal diversity. What this behavior reveals, of course, is that urban dwellers place a higher value on having their own aesthetically pleasing ecological deserts than on personally promoting local biodiversity, even when the latter would save them hundreds, perhaps thousands, of dollars each year. The clear implication is that urbanites simply do not attach much importance to biodiversity.

This leads directly to a second point: notwithstanding that biodiversity is of little importance to them personally, urbanites may favor local, state, and federal statutes that ostensibly enhance biodiversity, provided such statutes impose the cost burden on rural landowners. The feel-good benefit of such regulation may be small, but with no personal costs to worry about, urbanites can be convinced to vote for them. However, if there were even a moderate cost to urban dwellers, we can be reasonably certain that restrictive regulations would not be passed. This explains why, for example, Oregon’s replanting regulations are not imposed on owners of residential properties who cut down trees.

Earth’s limited resources cannot provide all things to all people simultaneously. For that matter, the earth cannot provide all things just to self-proclaimed environmentalists. Consequently, responsible choices about the use of resources must be made. It is irresponsible to enact environmental policies that impose costs disproportionately on private timberland owners. Such policies lead to overproduction of environmental protection because urban voters who place little value on environmental amenities support regulations that impose little or no cost on themselves personally.

Further, these policies create incentives for private timberland owners to minimize, not maximize, their production of environmental amenities. This problem of incompatible incentives makes it less likely that public policy will actually attain its stated objectives.

Notes

1. National Audubon Society, www.audubon.org/campaign/fh/chipmills.htm, no date.
2. Garrett Hardin, “The Tragedy of the Commons,” Science (162), 1968, pp. 1243–48; see www.dieoff.org/page95.htm.