Coyote Blog

I tend to divide up environmental regulations into two buckets:

1. Regulations aimed at curbing emissions that spill out of one person's property (e.g by air or water) to others
2. Regulations mainly aimed at land use restrictions that affect how someone may use their own land

The first type of law is essential to rational functioning of strong property rights in the modern world.  Otherwise, we would all be suing each other over molecules of pollution that cross our property lines.

The second category, including wetlands and open space and habitat protection, are a threat to property rights (something one could infer just from the fact that many anti-capitalist anti-technology leftists have jumped on the environmental bandwagon, mainly focusing on this second category of limitations).

Here is one of those situations that make me a true minority in this country:  I greatly value wide-open undeveloped spaces and ranges for wild animals, but I don't expect the government to provide them for me nor do I ask other citizens to provide them to me against their will.  Unfortunately, most of the other people in this country who value these things do in fact accept, and even demand, that government provide them.  Every day, landholders are told by various government bodies that they cannot do what they like with their land, because other people who do not own the land like the land the way it is.  These landholders are effectively expropriated of their land, in these cases without even the payment the New London Kelo victims received. 

This is why I have always supported the private land trust movement, of which the Nature Conservancy is the most well-known example.  These land trusts use private donations to buy out property owners and set aside property for various conservation purposes.  This way, the people who value the conservation of the land pay the price for it, not the person who happens to be owning the targeted land.

I was sad to see, therefore, the Nature Conservancy revealed in Senate hearings as having a number of ethical lapses.  , was all over this story.  They describe the problems found as follows:

*A pattern of dealings with insiders that gave preferential treatment on land deals.

*A pattern of dealings with the companies of board members

*Selling emissions credits, including a $10 million deal with General
Motors while GM's chairman John Smith served on TNC's board.

*Selling emissions credits that it may or may not have even owned,
essentially furthering its own environmental goals (buying land) at the
expense of another environmental goal (reducing greenhouse gases)

*Allowing oil and gas drilling on one of three known habitats of the
Attwater Prairie chicken, bumbling its way through the deal so that it
ended up in court, accused of cheating one of its partners, all while
pocketing over $8 million in royalties.

The report paints a picture
of an organization that had gotten so big, and so successful, that it
lost sight of why it was formed in the first place.

There is a lot of discussion about what reforms will help prevent this problem, and a lot of discussion about eliminating the tax deduction for conservation easements:

It has become clear that some people have been abusing the law that
allows tax deductions for conservation easements. The easement
deduction allows me to sell the development rights to my property to a
land trust. I keep the property the way it is, and everyone who buys it
from me agrees to keep it that way too. If it's wilderness, it stays
wilderness. If it's a ranch, it stays a ranch. In areas with lots of
development, that can be worth a ton of money. The big question, how
much? It's a subjective appraisal, and if both parties want to unfairly
jack up the value, the hearings have shown the IRS doesn't have the
manpower to catch it. And it's led to a cottage industry in easement
tax shelters, including millions of exemptions for golf courses,
driving ranges and backyards. Phony trusts were set up not to protect
land, but to act as tax shelters for the wealthy. As the facts come
out, it's outraging critics, and depressing supporters.

In these deals, one party keeps the land while another party. like TNC, buys the "development rights" and pays the legal bills over time to defend these rights.  Personally, I have not been a big fan of conservation easements.  "Forever" is a very long time, and there are always going to be incentives to cheat -- if not in this generation, then in the next.  Also, such "conditional" property makes me nervous, somehow splitting property rights into two pieces, like a treasury strip.  I can't say I can make a firm philosophic argument against it, but it makes me uneasy. 

I would much prefer land trusts like TNC to forget about being enablers for conservation easements and get back to their original mission - buying land outright for conservation purposes.  By buying it outright, you get away from all the problems of policing private land use of the easements an organization has taken on.

I have decided to continue to donate to the Nature Conservancy.  They do a lot of cool stuff, and philosophically I much rather spend my money to have property purchased for conservation rather than to lobby Congress to force someone to conserve at the point of a gun.  I just hope TNC can get its act together so it can continue to provide a viable private alternative to government coercion.

In a followup post to the impact of "smart growth" policies on housing prices and availability, Tim Cavanaugh has this in Reason:

What's weird is how rarely, in San Francisco media, you'll hear the above
argument made at all. The "crisis" in housing prices is almost invariably
described as an inexplicable force of nature (in the local TV news) or as a
conspiracy by developers (in the alt.weeklies). You'd think, in a city full of
progressives who can talk all day about how they wish they could afford a home,
somebody might have started to wonder whether there's a connection between
political decisions and the fact that the city is remarkably segregated and
prohibitively expensive.

He has more, as does Thomas Sowell:

That fact has much to do with skyrocketing home prices. The people who vote on
the laws that severely restrict building, create costly bureaucratic delays, and
impose arbitrary planning commission notions need not pay a dime toward the huge
costs imposed on anyone trying to build anything in the San Francisco Bay area.
Newcomers get stuck with those costs...

People who wring their hands about a need for "affordable housing" seldom
consider that the way to have affordable housing is to stop making it
unaffordable. Foster City housing was affordable before the restrictive land use
laws made all housing astronomically expensive. Contrary to the vision of the
left, the free market produced affordable housing -- before government
intervention made housing unaffordable.

As I wrote here, I think of environmental issues in two categories:

1. Regulation of pollution and emissions that affect other people's property.  These regulations are essential to the maintenance of a system of strong private property rights.  Without them, we would all be in court every day suing each other for damage to our property or water or air on our land from neighboring lands. Of course, we can all argue about whether set limits are reasonable, and we do.
2. Regulations of land use that effects only your own land.  This is a relatively new area of environmental law, ushered in by the Endangered Species act and various wetlands regulations.  These regulations say that even if your proposed land use doesn't create any emissions that affect anyone else, the government may still ban your land use for some other environmentally related goal (habitat, watershed, anti-sprawl, the list is endless). 

These land-use laws constitute by far the most distressing area to me in environmental law.  In the worst cases, these laws can result in what are effectively 100% takings of a person's land without any compensation. (Example:  you buy a lot on the ocean for $500,000 to build a beach house.  Before you can build it, new regulations are passed making it illegal for you to build a house on that land.  Yes, you still own the land, but it is now worthless to you since you cannot use or develop it).  Good article on this here (pdf) and a listing of Cato Institute articles on this topic here.

The government is of necessity involved in #1, though we can argue that some regulatory structures are more efficient than others (e.g. trading vs. command and control).  Government involvement in #2 is often a mess, and is one reason why private conservation groups and land trusts have made so much headway.

Reason has recently released a fairly comprehensive roundup of private conservation efforts that goes into much more detail on this topic.

Currently, Congress is considering scaling back on tax breaks for conservation easements.  As habitat protection and open space have become larger environmental issues, conservation easements have gone way up in use.  As with most government programs, the laws of unintended consequences have taken over, and many have found ways to get tax breaks some feel are undeserved.  Nature Noted has a long series of posts on the debate. 

I have mixed feelings on the change.  To understand this, lets take a step back and look at government environmental policy.  As I have written in the past, I think of government environmental legislation in 2 parts:

1. Regulation of pollution and emissions that affect other people's property.  These regulations are essential to the maintenance of a system of strong private property rights.  Without them, we would all be in court every day suing each other for damage to our property or water or air on our land from neighboring lands. Of course, we can all argue about whether set limits are reasonable, and we do.
2. Regulations of land use that effects only your own land.  This is a relatively new area of environmental law, ushered in by the Endangered Species act and various wetlands regulations.  These regulations say that even if your proposed land use doesn't create any emisions that affect anyone else, the government may still ban your land use for some other environmentally related goal (habitat, watershed, anti-sprawl, the list is endless). 

These land-use laws constitute by far the most distressing area to me in environmental law.  In the worst cases, these laws can result in what are effectively 100% takings of a person's land without any compensation. (Example:  you buy a lot on the ocean for $500,000 to build a beach house.  Before you can build it, new regulations are passed making it illegal for you to build a house on that land.  Yes, you still own the land, but it is now worthless to you since you cannot use or develop it).  Good article on this here (pdf) and a listing of Cato Institute articles on this topic here.

I have for a long time been a supporter of the Nature Conservancy and other land trusts (see Nature Noted site linked above for lots of links and info).  These trusts works to reach the goals in #2 above but with private money instead of government regulation and takings. 

Back to the issue of conservation easements.  It is becoming clear to me that while deals made by the Nature Conservancy rely on private money, they also rely on government subsidy through conservation easement tax breaks.  Their actions are not as private as I thought the were.  And therefore my mixed feelings.  I still think that their activities, even with the tax breaks, is more fair and probably much more efficient than the government takings approach.