Endangered Species and the Profit Motive:

Some Caveats

“My own gropings come to a dead end,” the conservationist Aldo Leopold wrote more than forty years ago, “when I try to appraise the profit motive. For a full generation the American conservation movement has been substituting the profit motive for the feat motive, yet it has failed to motivate. We can all see profit in conservation practice, but the profit accrues to society rather than the individual.” The response to this disparity, Leopold noted, was one that is all too familiar: “This, of course, explains the trend, at the moment, to wish the whole job on the government.” In considering our present efforts to conserve endangered species, Leopold’s words still ring true. For an individual landowner, there is no profit in preserving an endangered species’ habitat, even if society at large places a high value on that species. To change that, there has been much talk about building incentives for private landowners into conservation programs — a return to the profit motive, in other words. Under this approach, landowners are granted what amounts to property rights to use their land even if it harms (to some extent) an endangered species. Those who champion this approach, however, should take care not to overstate their case. Although government-dominated programs rarely live up to their promises, “to wish the whole job” on incentives is equally optimistic, and carries with it some sobering caveats.
Few people suggest supplanting all environmental laws with incentives, so even under such a program, private landowners would still bear some legal duties to protect biodiversity. But an incentives program would go hand-in-hand with an explicit recognition that those duties have a limit. Landowners might be legally barred from directly harming a member of an endangered species, for example, but would retain the right — a property right, that is — to modify its habitat. Thus, if the government or a private group wished to advance the conservation of that species beyond the prohibition of direct harm, it would have to persuade landowners to do so, not coerce them.
This approach — let’s call it by its proper name, the property rights approach — would help eliminate a problem that haunts our current conservation efforts: the effective disincentive landowners face to preserve habitat. Because the presence of an officially recognized endangered species triggers the strictures of the Endangered Species Act, landowners frequently go out of their way to ensure the absence of such species, often by managing their land to degrade the species’s favored habitat.
By seating property rights to habitat in the landowner, not society-at-large, the property rights approach has the potential to turn habitat into an asset, rather than a liability. By offering a set of incentives to preserve habitat or manage land in a species-friendly manner, the government could persuade landowners to undertake more conservation. As Leopold might have looked at it, the profit motive would be harnessed to motivate conservation, not stand in its way, by allowing the individual to capture the profit that normally accrues to society.
The property rights approach is highly touted in conservative circles, even to the point of tossing government out of the picture altogether. The current focus on the utilitarian values of species, highly touted in environmental circles, unwittingly supports this conclusion. “The honeybee is like a magic well,” E.O. Wilson, the Harvard biologist, has said. “The more you draw from it, the more there is to draw. And so it is with any species, which is a unique configuration of genes assembled over thousands of years, possessing its own biology, mysteries, and still untested uses for mankind.” Why not let the market, that great engine of utilitarian production, determine which sets of genes will be preserved?
One reason is that while important, these utilitarian values are not exhaustive. The relation of Homo sapiens to other species contains dimensions that go beyond “uses for mankind.” Leopold’s land ethic is an example, of course, and although not all of us subscribe to such an ethic, other values surely exist and are important. Whether these values would find purchase in a strictly private-property rights approach, however, is questionable. Defining and enforcing property rights are costly activities, and some values may not be worth capturing. Most likely to be touted are commercial values (does it taste good? Is it pretty? Is it a potential drug?), and those species with the strongest commercial components will find the most support in a market-based system.
If non-commercial values fail to flourish, the property rights approach could effectively transform biodiversity into a bountiful supermarket. The bark of the white willow tree, Salix alba, for example, contains salicin, a chemical cousin of acetylsalicylic acid, or aspirin. With only commercial values in play, this species becomes an in situ brand of analgesic, in competition with Bayer aspirin and Tylenol acetaminophen (another analgesic). Imagine the advertising campaign: Got a headache from worrying about all those endangered species? Buy a bottle of Salix alba today, on sale at your local biodiversity reserve!
This scenario is undoubtedly overwrought, as evidenced by the success of private conservation groups like The Nature Conservancy and the Peregrine Fund. To my knowledge, donations to these efforts are not exchanged for stock options in some speculative cancer cure venture or some other direct, economic stake in species preservation. Rather, these groups appeal to values unrelated to “uses for mankind,” utilitarian only in the broadest sense of satisfying the contributor’s utility.
But their ability to capture these values runs afoul of the very problem Leopold noted. The value of preserving the peregrine falcon, for example, accrues to society as a whole, not just to the individuals who contribute to the Peregrine Fund. The disparity is not enough to prevent these organizations from existing, of course, but it does suggest that there is a role for government to play, just as it does for national defense or highways.
A more sobering aspect of the property rights approach is that it does not claim that every species will be saved. Strong property rights clarify the benefits and costs of conservation. Rather than being punished for maintaining habitat amenable to an endangered species, landowners stand to capture the social value of saving them. Thus, the interests of landowners are aligned with those of species.
But not always. Nothing guarantees that the benefits of saving a species, even with an incentive program in place, will outweigh the costs. And because the rights to protect habitat would be held by landowners, they would be free to choose between saving a species or not.
This stands in apparent contrast to laws like the Endangered Species Act, which pretends to banish extinction by fiat. That it fails to do so is one reason other approaches warrant attention. But there is a danger in attaching a false promise to the property rights approach: That it is the endangered species “solution.” No system of conservation is capable of “solving” extinction. Supporting a property rights approach does not require that it do so, of course, only that it do a better job than the present system. Those who advocate this approach should be honest about what it will not do: It will not make extinction go away.
Being honest takes courage because the prospect of losing species is so disheartening. These caveats need not stop us from giving the property rights approach a try, however, especially when we consider the alternative. Conservation through coercion treats landowners as obstacles, an attitude that Leopold would surely have rejected as counterproductive. He viewed landowners as the vanguard, not the enemy, of a slow but steady evolution toward a land ethic. By enabling them to pursue conservation and satisfy economic needs at the same time, a property rights approach could nurture such an evolution. Along this path, to echo Leopold, conservation might someday proceed.