ELE 2007 Symposium

Property Rights in Environmental Assets: Economic and Legal Perspectives

ELE symposium held on October 26, 2007

Participants

Participant Biographies
David Adelman, Arizona
Jim Boyd, Resources for the Future
Bonnie Colby, Arizona
Kirsten Engel, Arizona
Robert Deacon, UCSB
George Frisvold, Arizona
Robert Innes, Arizona
D. Bruce Johnsen, George Mason
Jason S. Johnston, Penn
Gary D. Libecap, UCSB
Dean Lueck, Arizona
Anup Malani, Chicago
Thomas Merrill, Columbia
Marc Miller, Arizona
Barak Orbach, Arizona
Tauhid Rahman, Arizona
Carol M. Rose, Arizona
Roger Sedjo, Resources for the Future
Kathy Segerson, UConn
Henry Smith, Yale
Katrina Wyman, NYU

Papers

Final versions of the papers presented at the symposium were published in Volume 50, Number 2 of the Arizona Law Review. The linked files are in pdf format.

Symposium Introduction: Property Rights and the Environment
Kirsten Engel, Professor of Law, James E. Rogers College of Law, University of Arizona, and Co-director, Program on Economics, Law, and the Environment; and Dean Lueck, Bartley P. Cardon Professor of Agricultural and Resource Economics, University of Arizona, and Co-director, Program on Economics, Law, and the Environment.

Open-Access Losses and Delay in the Assignment of Property Rights
Gary D. Libecap, Donald Bren Professor, Corporate Environmental Management, Bren School of Environmental Management, UC Santa Barbara
Abstract: Even though formal property rights are the theoretically optimal response to open access problems involving natural and environmental resources, they typically are adopted only after considerable waste has taken place. Instead, the usual response in local, national, and international settings is first to rely on uniform rules and standards as a means of constraining behavior. While providing some relief, uniform rules do not close the externality, and excessive exploitation along unregulated margins continues. As external costs and resource values rise, there finally is a resort to property rights of some type. However, the need for transfers and other concessions addressing distributional concerns affects the ability of rights arrangements to mitigate open-access losses. This Article outlines the reasons this pattern exists and presents three empirical examples—overfishing, over extraction of oil and gas, and excessive air pollution—to illustrate the main points.

Big Roads, Big Rights: Varieties of Public Infrastructure and Their Impact on Environmental Resources
Carol M. Rose, Lhose Chair in Water and Natural Resources Law, James Rogers College of Law, University of Arizona
Abstract: Two types of public infrastructure—roads and property rights—are often thought critical to economic development; this Article compares their impacts on the natural environment. Both roads and property rights draw unfamiliar persons to remote areas, undermine existing informal resource practices, and enhance wide commercial trade, creating wealth but also reducing local resource diversity. New kinds of property rights hold much promise for environmental protection, but unlike roads and conventional property rights, environmental property rights would be tasked with curtailing commerce, as in roadless areas and caps on resource use. This sharp divergence from the traditional commercial mission of public infrastructure can limit support for environmental property rights, creating an opening for fuzzier and more consultative versions of environmental property.

Governing Water: The Semicommons of Fluid Property Rights
Henry Smith, Fred A. Johnston Professor of Property and Environmental Law, Yale University
Abstract: This article applies an information-cost theory of property to water law. Because of its fluidity, exclusion is difficult in the case of water and gives way to rule of proper use, i.e., governance regimes. Looking at water through this lens reveals that prior appropriation employs more governance and riparianism rests more on a foundation of exclusion than is commonly thought. The development of increasing amounts of exclusion and governance are both compatible with a broadly Demsetzian account that is sensitive to the nature of the resource. Moreover, hybrids between prior appropriation and riparianism are not anomalous. Exclusion strategies based on boundaries and quantification allow for rights to be formal and modular, but this approach is particularly challenging in the case of water and other fugitive resources. The challenges of exclusion that water and other fugitive resources present often lead to a semicommons in which elements of private and common property both coexist and interact.

The Role of Property Rights in Climate Change Mitigation and Adaptation
Jason Scott Johnston, Robert G. Fuller, Jr. Professor, University of Pennsylvania Law School
Uncontrolled human greenhouse gas emissions (GHGs) and their effect in causing climate change are often taken as a paradigmatic example of the uncontrolled overuse of a common property resource. A well-known regulatory response to climate change is to create tradable rights to emit carbon dioxide and other GHGs.; Short to medium run climate change is inevitable, however, regardless of the success or failure of such a system of tradable rights. This paper argues that in the short to medium run, the primary determinants of the costs and benefits of climate change, and how those costs vary across different nations, will be national and sub national property rights systems.; The paper explores how climate change adaptation is likely to vary under alternative property rights regimes.

Bioprospecting and Biodiversity Conservation: What Happens When Discoveries Are Made?
George B. Frisvold, Professor of Agricultural and Resource Economics University of Arizona
Abstract: There has been extensive debate over whether private-sector bioprospecting for pharmaceutical compounds creates significant incentives for biodiversity conservation. We offer a case study of the discovery and commercial development of the anti-cancer drug taxol from the Pacific yew tree, highlighting neglected issues in the debate over bioprospecting and conservation incentives. The discovery of taxol and the search for taxol-like compounds illustrates how bioprospecting can substitute threats to biodiversity from over-harvesting for threats to biodiversity from habitat conversion. As this example illustrates, whether creation of market demand for genetic resources encourages or discourages biodiversity conservation depends crucially on underlying property rights.

The Property Rights Challenges in Marine Fisheries
Katrina Wyman, Associate Professor of Law, New York University
Abstract: TThis article argues that fisheries policymakers currently face a multifaceted challenge. Wild fish stocks are declining, aquaculture is growing, and there are many possible policy responses to these developments. Drawing on economic analysis of property rights, the Article frames the challenge facing policymakers as an optimization problem in which the objective should be to design property rights in fisheries that will produce the greatest net benefits. Complicating matters, the Article suggests that there is no single property arrangement that is optimal for fisheries in general and that policymakers will need to design many different property rights regimes to reflect local conditions.

Improving Efficiency by Assigning Harvest Rights to Fishery Cooperatives: Evidence from the Chignik Salmon Co-op
Robert T. Deacon, Professor of Economics, University of California, Santa Barbara, Dominic Parker, Environmental Science and Management, University of California, Santa Barbara, and Chris Costello, Associate Professor of Environmental Management, University of California, Santa Barbara
Abstract: During 2002–2004 a voluntary, profit sharing harvesters’ co-operative was allowed to operate in the Chignik Salmon fishery in Alaska. Regulators split the fishery’s total allowable catch between the co-op and independent harvesters. Our economic model predicts that the co-op would centrally coordinate its members’ activities, resulting in more efficient effort deployment than in the independent fleet. Empirical analysis of relevant data supports these predictions. We find that, in contrast to the independent fleet, the co-op concentrated effort among its most efficient members, fished closer to port, spread harvesting over a longer time span, and shared information on stock locations.