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Compensate for Conservation's Sake:

It is generally assumed that requiring compensation for regulatory takings would hamstring environmental conservation efforts. Forcing the federal government to pay landowners who lose the ability to modify their own land because it is designated as endangered species habitat or a jurisdictional wetland could well reduce the regulatory appetite of federal agencies (assuming the compensation came out of their budgets, rather than judgment fund), but would environmental protection suffer as a result?

In a new paper,"Money or Nothing:The Adverse Environmental Consequences of Uncompensated Land-Use Controls," I argue that the conventional wisdom is wrong. Compensating landowners for the costs of environmental land-use controls could actually enhance environmental conservation. Why? First, such compensation would reduce, if not eliminate, the incentives uncompensated land-use controls create to destroy or degrade ecological amenities on private land. Several recent empirical studies confirm theoretical predictions that such incentives are substantial, and lead to the significant loss of habitat. Because most endangered species rely upon private land, this is a big deal. Second, there is reason to believe that environmental agencies over-rely upon land-use control as a conservation strategy, and that substituting other conservation strategies could be more cost-effective. Requiring compensation, and mandating that such compensation be paid from agency budgets, could encourage greater consideration of trade-offs and thereby enhance the effectiveness of conservation programs.

A draft of the paper is now available on SSRN. I hope to expand on some of these points in a series of posts next week.

Related Posts (on one page):

  1. The ESA vs. Private Conservation:
  2. Compensate for Conservation's Sake:
Houston Lawyer:
If you pay a land owner to harbor endangered species on his land, he'll protect them. If you penalize him for having the same animal on his land, he'll likely kill it and quietly bury it.
8.17.2007 2:22pm
Oren (mail):

Second, there is reason to believe that environmental agencies over-rely upon land-use control as a conservation strategy, and that substituting other conservation strategies could be more cost-effective.


This is a red herring, at best. At worst, they are a nebulous set of "other strategies" that is used rhetorically to tear down land-use control but never actually implemented because, of course, they do not exist. Your paper cites a few of these programs (in the very specific context of wetlands) but they are woefully lacking in detail. Until these programs materialize in a concrete and effective way, I cannot support easing land-use restrictions.

OTOH, I am first in line to agree that our current regime of environmental protection is highly inefficient when it comes to extracting the maximum environmental benefit for a fixed economic cost. That said, I don't believe that a drastic cut in regulation is the answer - let's be honest, that would be the final result of your proposal. At the very minimum, such a proposal ought to include an increase in the EPA's budget by at amount awarded in takings judgments to preserve the status quo.

Basically, I think you are disguising an argument for less protection as an argument for better protection.





PS. Annoying typesetting complaint time! The page numbers listed in the ToC do not correspond to the PDF page numbers (nominal page 1 = actual page 3). It's trivial to rearrange the PDF numbering scheme to correct for this (In Acrobat Pro 7.0 go to advanced --> number pages and start a new section for pages 3->61). Very annoying (yes yes, the complaint is annoying too!)
8.17.2007 3:02pm
Dave Hardy (mail) (www):
Remember that in the case of the ESA, most regulatory actions are *mandated* by statute. With enforcable deadlines, in case the agency just stalls. It's a very complex system where the agency is required to rank possible listings by priority based on likely risk of endangerment, then run them thru under fixed deadlines. And it gets sued regularly for exceeding those.

It has *some* flexibility on designating critical habitat. But fact is that it hates to designate it because it consumes maybe 5x as much time as listing the species did. So Congress put in a mandate to designate habitat except in the case of a few exceptions (which the agency stretches whenever it can. E.g., designating habitat would increase risk to the species by telling people where to find and wipe it out. This is really an area where the statute is driving the agency rather than the agency pushing the statute. If Congress got rid of the deadlines, and made critical habitat entirely optional with a presumption against, the windows at Fish and Wildlife Service HQ would probably burst from the cheering.
8.17.2007 3:07pm
Dave Hardy (mail) (www):
If you pay a land owner to harbor endangered species on his land, he'll protect them. If you penalize him for having the same animal on his land, he'll likely kill it and quietly bury it.

One guy at FWS set up a foreign program like that. He told me it was a great success. You go to some tribal area in Pakistan or Afghanistan, explain to them that there is this group called Safari Club, and that obscure species of mountain goat they're occasionally cooking for dinner ... well, those Safari Club folks will pay $10,000 in hard currency for one. Which is probably about five years' income for the entire village.

At that point those mountain sheep are no longer cooked for dinner. And anyone poaching them is shot out of hand.

He said there was some *extremely* wealthy Pakistani, their equivalent of Bill Gates, who was caught hunting for a critter like that without tribal agreement. He was treated rougher than he was accustomed to, and complained to the tribal leader that his young men had beaten him up, taken his rifle, and left him in his underwear.

The tribal leader said: I see your point. My young men erred. I will tell them that if they see you hunting again, they should just shoot you on sight.
8.17.2007 3:12pm
Jonathan H. Adler (mail) (www):
Oren --

The available non-regulatory alternatives to land-use controls are quite substantial. You are correct that my discussion in the paper is somewhat cursory. I did not go into greater detail on the various voluntary conservation programs in the paper because it was starting to get quite long. Perhaps I will expand that section prior to publication.

These programs (Partners for Wildlife, NAWMP, WRP, etc.) are quite substantial, however. As I detailed in a prior paper on wetlands (29 Envtl. L. 1), these programs lead to the restoration of far more wetlands than mandated 404 mitigation and were the primary drivers behind the achievement of "no net loss" of wetlands in the 1990s. They also illustrate that the per-acre cost of voluntary conservation can be a tiny fraction of either land acquisition or mandated compensation.

That there are fewer such programs in the context of species habitat is a problem -- but one reason for fewer such programs is the punitive nature of Section 9 regulation. Nonetheless, there are quite a few state and local habitat programs, some of which may merit greater discussion, and there it is probably also worth drawing a comparison to voluntary habitat restoration programs implemented for non-listed species as well as programs that helped various bird populations (such as wood ducks and bluebirds) prior to the ESA's enactment.

Dave Hardy --

You are absolutely correct that the current structure of the ESA gives the FWS minimal ability to utilize non-regulatory conservation strategies on private land. This is a real problem with the act. I would also add that this aspect of the Act creates tremendous pressure to manipulate the underlying science on species populations, as once a species is listed, the regulatory restrictions follow automatically. The answer, I believe, is to create more discretion in the Act. Unfortunately, most industry/GOP reform proposals instead try to manipulate the listing process.

Thanks for the substantive comments.

JHA
8.17.2007 3:24pm
Anonimus Cowardius (mail):
Jonathan -

I wrote an opinion piece for the Anchorage Daily News on this subject a while back. It was partially tongue-in-cheek, but the thrust of it was that, if all the Lower 48ers didn't want us to drill for oil in ANWR, they should pay us for not drilling.

I still think the idea isn't as outrageous as it sounds. I pointed out that, since the 1930s, we've payed farmers billions of dollars to not farm.

It kind of hits at the real problem with national-level conservation: the question of incentives. Of COURSE well-meaning Californians, New Yorkers and Floridians don't want us to drill in ANWR. They're not the ones paying the opportunity costs vis-a-vis lost jobs, wages, taxes etc. Personally, I'd like to see a 5,000-square-mile nature preserve set up with New Haven, Conn. -- home of Patricia Feral and the Friends of Animals -- at its center. Why not? Wouldn't cost ME anything.

Anyway, I could dig up the article and send it to you if you wish. Just let me know.

- AC
8.17.2007 3:50pm
Anonimus Cowardius (mail):
Jonathan, I have a related historical question.

When the federal government began creating the national park system (which as I understand it really began with Yellowstone), was there much debate relating to constitutionality?

To this untrained eye, the constitution seems pretty clear in limiting Federal authority to "all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings..." (all emphasis mine).

I hate to explore what seems like Montana Freemen territory, but a plain reading of the constitution seems to indicate that the framers quite clearly never intended the Federal government to own or manage significant chunks of land. Am I way off base? Or is this simply one of the hundreds of areas in which we've collectively decided that it's such a great idea, we shouldn't let the constitution get in the way?

- AC
8.17.2007 4:13pm
PatHMV (mail) (www):
That's fine with me, as long as we also bill the landowners for all of the environmental and other costs associated with their use of the land. Noise pollution, CO2 emissions, ground-water discharge, other noxious gasses, you name it.

Moreover, there's a loss to all of us when trees (for example) are cut down. On any given lot, the impact may be negligible, but taken together, loss of forest land, grazing land, etc. transforms all the other properties in the area, and ultimately across our country. If it's only fair to compensate the land owners for regulatory burdens imposed on them, it's only fair to charge them for action they take which have an affect on other people and other properties.
8.17.2007 4:38pm
J. F. Thomas (mail):
So I suppose you are all for private landowners compensating the federal government when conservation efforts (or even, for instance road construction) actually increase the value of their land.

And your analysis is simply cursory, anecdotal, superficial and flawed. You conflate the micro-economic issues of dealing with individual landowners with the macro-economic issues of a national environmental policy. While libertarians can always drag out the parade of horribles about an aggrieved landowner who can't fill in a swamp or cut down a tree because of some goddamned bug or bunny, the issues involve more than just his patch of damp grass or nesting woodpecker. Especially with wetlands, decisions made in Montana (and even in Alberta) can and do affect coastal wetlands in Louisiana (where 90% of the coastal wetland loss in this country is occurring). Very often, building or repairing wetlands in one area means that oyster fisherman in another are negatively impacted. Should the people who benefit be forced to pay the losers? The loss of wetlands is something that can not be approached from a property by property or even regional perspective.

One final point, comparing the cost of saving existing wetlands with constructing new wetlands is patently dishonest. As someone who is supposedly well versed in the field you should know this. The rules on what can be designated as a "constructed" wetland (e.g. a water hazard on a golf course or a rainwater retention pond in a subdivision) are so lax as to be ridiculous.
8.17.2007 4:49pm
J. F. Thomas (mail):
When the federal government began creating the national park system (which as I understand it really began with Yellowstone), was there much debate relating to constitutionality?

Just because the Constitution lists specific items that the government can condemn private property for does not mean that the government cannot own property outright or purchase property for other purposes. Heck while the founders were still alive the federal government was buying and obtaining by conquest parts of the country that more than doubled its size. The notion that the sovereign federal government has no business owning real estate other than for the purposes enumerated in the constitution is absolutely ridiculous and has no basis in history or the constitution.
8.17.2007 4:55pm
Jaime non-Lawyer:
"If you penalize him for having the same animal on his land, he'll likely kill it and quietly bury it."

The hunter's shorthand for this is the 3S's: shoot, shovel, shut up. It's used regularly on mountain lions here in CA. So I hear, anyway.
8.17.2007 5:01pm
J. F. Thomas (mail):
It was partially tongue-in-cheek, but the thrust of it was that, if all the Lower 48ers didn't want us to drill for oil in ANWR, they should pay us for not drilling.

How about this, if you really want to drill oil in ANWR, fine, but us lower 48ers will stop paying for any infrastructure that directly or indirectly supports the extraction and transportation of oil in Alaska. After we stop subsidizing the infrastructure, if anyone is still interested in pumping the oil out of ANWR, we can talk about buying the oil rights from them.
8.17.2007 5:04pm
Truth Seeker:
Moreover, there's a loss to all of us when trees (for example) are cut down.

If you don't own it, it's not your loss. You have no right to someone else's property not matter how much you like the trees, wetlands, etc. on it. Like it? Buy it yourself.
8.17.2007 5:05pm
stormy (mail):
Even Jefferson is quoted as saying the louisiana purchase was unconstitutional and he did it. By the way, the federal government is not sovereign!
8.17.2007 5:07pm
...Max... (mail):

...as long as we also bill the landowners for all of the environmental and other costs associated with their use of the land. Noise pollution, CO2 emissions, ground-water discharge, other noxious gasses, you name it...


Hmm... most of the items on this list (all but ground-water discharge, I guess) apply to more than just landowners. Sounds like a comprehensive solution to the tragedy of the commons, but do we really want it implemented? That DOES mean billing you for breathing, you know (not to mention the gases coming out of other orifices)

What you really intimate with your response is that "land ownership" is largely a legal fiction these days. And perhaps this is a slippery slope that can easily extend to other types of property... even to self-ownership?
8.17.2007 5:11pm
Anonimus Cowardius (mail):
J.F. Thomas -

1. May I politely suggest you tone down the hyperbole. My interest in getting involved in a pissing match is exactly zero.

2. I have to confess you lost me at the "condemn private property" part. I was referring to 1.8:

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings

Seems pretty clear to a layman like me.

3. "Heck while the founders were still alive the federal government was buying and obtaining by conquest parts of the country that more than doubled its size."

Which they then divided up and created states out of. Perhaps you could use an example that supports your thesis, not mine.

Respectfully,

- AC
8.17.2007 5:12pm
Andy Freeman (mail):
> The rules on what can be designated as a "constructed" wetland (e.g. a water hazard on a golf course or a rainwater retention pond in a subdivision) are so lax as to be ridiculous.

That is no more rediculous than the definitions of "wetland" used to trigger wetland protections.
8.17.2007 5:13pm
Andy Freeman (mail):
> How about this, if you really want to drill oil in ANWR, fine, but us lower 48ers will stop paying for any infrastructure that directly or indirectly supports the extraction and transportation of oil in Alaska.

I'll take that deal as long as we also stop federal funding for purely local transportation projects. Yes, the "bridge to nowhere" counts, but so does the "big dig" and mass transit.

The only exception would be interstate highways across mostly empty areas, where the traffic is largely/dominated by interstate commerce, and even there I'm willing to consider toll roads. (Airports and seaports are already charging, so they can go self-supporting - the ones that make economic sense will continue.)
8.17.2007 5:20pm
J. F. Thomas (mail):
Which they then divided up and created states out of. Perhaps you could use an example that supports your thesis, not mine.

Well, no they created territories mostly and retained title to most of the lands contained in them. Which they then proceeded to sell or give away to settlers, corporations (e.g., railroad companies) or designate as Indian lands. When territories became states, they were given land within their borders, including one out of every sixteen sections (one square mile) to fund land grant colleges and other educational institutions (one of the most brilliant moves ever made by the federal government). The federal government still is the largest single landowner in the country owning up 90% or more of the land in some states (which it couldn't find a buyer for if it wanted to).

And of course the section of the Constitution you are cite authorizes the acquisition and creation of the District of Columbia which would be directly governed by the federal government and federal authority over federal installations located in the states.
8.17.2007 5:25pm
Anonimus Cowardius (mail):

How about this, if you really want to drill oil in ANWR, fine, but us lower 48ers will stop paying for any infrastructure that directly or indirectly supports the extraction and transportation of oil in Alaska. After we stop subsidizing the infrastructure, if anyone is still interested in pumping the oil out of ANWR, we can talk about buying the oil rights from them.


I'm not sure I follow. Are you suggesting that the cost of the infrastructure necessary to facilitate development is greater than the value of the extracted resources? If that is the case, then why would we -- or anyone -- want to pursue this development in the first place?

Taken literally, you seem to propose that Alaskans be left to handle their own natural resources, as long as we fund the infrastructure to do so. Well, what can I say? Since a wide range parties -- Norway, Great Britain, Canada, etc. etc. etc. -- have prospered in this situation, I accept your offer.

- AC
8.17.2007 5:26pm
Anonimus Cowardius (mail):
JFT -

There are so many non-sequiturs there I'm not really sure where to begin. First, of course they created territories. When presented with the means and opportunity to acquire more land, what were they supposed to do? "No thanks, it would take us a while to set up states in those areas, so we'll pass"?

The first significant acquisition of land I can find was the Arkansas Hot Springs Reservation. This was 1832 -- long after the founding; it was done at the request of the Arkansas Territorial Delegation, and it was in legal dispute for nearly 50 years.

The land grant thing doesn't fare any better. First, the Federal Government ceding land to the states doesn't seem to be unconstitutional -- indeed, it seems to be exactly what the constitution requires. (Although I am interested in the idea that the federal government could dictate what the state had to do with the lands once the transfer was complete.) Also, the land grant legislation was enacted in 1862 -- again, long after the framers' time.

Finally, I have no opinion on how "brilliant" the land-grant initiative was. It could have been the greatest idea in the history of mankind for all I'm concerned.

- AC
8.17.2007 5:59pm
Jonathan H. Adler (mail) (www):
J.F. Thomas --

You've clearly not read the paper, as I address many of your concerns.

I spend no time on "horror stories" of individual landowners getting harmed by environmental regulation, and I explicitly address the (now out-of-date) criticism that all evidence of anti-environmental effects from environmental land-use controls is anecdotal by summarizing the empirical studies on such effects -- all of which find significant and widespread effects.

On the cost front, there are two separate issues -- costs of conservation and costs of restoration. In both areas, it appears that voluntary programs are substantially more cost-effective than regulatory programs. Conservation programs conserve wetlands at a fraction of the costs of regulatory prohibitions. Similarly, voluntary restoration programs -- which are typically focused on creating and maintaining specific ecosystem functions (such as waterfowl habitat) -- are both less expensive and more effective than mandated mitigation. Mitigation under Section 404 is very expensive per-acre, and yet still has very high failure rates.

Government road construction has the potential for both positive and negative effects on nearby landowners, and I neither favor compensation nor cost-recovery for such effects. I favor compensation where government regulation prevents a landowner from making use of his or her land, and such restrictions are neither tanatamount to nuisance control nor a source of reciprocal, compensating benefits. I also believe that, in the case of environmental regulations, the lack of such compensation seriously undermines sound conservation policy. There is nothing in your comment that would suggest otherwise.

JHA
8.17.2007 6:22pm
J. F. Thomas (mail):
Jonathon,

I did read your paper and you did not address my concerns. Your empirical data consists mostly of evidence collected about the cutting of pine forests in an effort to avoid protecting the red cockaded woodpecker, which I think is a very exceptional case for a number of reasons.


There are serious flaws in your argument, the first being that determining the loss (or gain) in value from environmental regulations is difficult at best and in many cases, simply impossible. But of course, in your world government action is always a net negative that must always be compensated for and will always be a simple calculation.
8.17.2007 6:42pm
calmom:
A couple of years ago, Oregon went through this debate over its Measure 35. Landowners who owned undeveloped land that had been purchased as zoned for development were seeing their investments become worth much less when the government rezoned the property as only agricultural or only for one dwelling of a certain limited size. In short, they lost investments they had been counting on for retirement or they couldn't build a house for the children on their farm.

The referendum passed meaning that Oregon had to compensate those landowners for the decreased value. The argument for the landowners was: If the government wants to keep the land agricultural for the benefit of the public, then the public (not just one landowner) should bear the cost.

The argument by the environmentalists was essentially: The government can't afford it and Oregon will become one giant housing development without it.

The petitions on how to compensate the landowners are still pending and their is some movement to re-vote on the measure.

My feeling is that if the public really feels that a particular open space is important, they will support paying for it. It's simply not fair for the burden to be placed on a few landowners when all residents will benefit.
8.17.2007 7:47pm
TruthInAdvertising:
"The first significant acquisition of land I can find was the Arkansas Hot Springs Reservation."

Are you kidding?

Louisiana_Purchase

Gadsen Purchase

Alaska Purchase

Territorial Acquisitions
8.17.2007 7:53pm
TruthInAdvertising:
"Landowners who owned undeveloped land that had been purchased as zoned for development were seeing their investments become worth much less when the government rezoned the property as only agricultural or only for one dwelling of a certain limited size."

Does that go both ways? Should a property owner compensate the government when the government action increases the value of the land? If two equally developable properties are zoned Agricultural and then one is rezoned to allow commercial development, the property owner has suddenly gained a tremendous amount of value in their land from the government action.
8.17.2007 7:57pm
Anonimus Cowardius (mail):
Truth in Advertising -

You are of course correct in that I didn't define what I mean by "significant." In fact I noticed that right after I posted, and debated posting a clarification, because I knew someone would point that out.

What I was looking for -- and believe me, I'm no expert, just a laymant sifting through Wikipedia -- was to get an idea of when and under what circumstance it became acceptable for the federal government to acquire property in a manner seemingly inconsistent with the constitution (i.e., not "needful"; not purchased via the consent of a legislature; and/or not acquired with the specific expectation that, at some point, the land would be turned over a state legislature).

The Louisiana Purchase, for example, states that:


The inhabitants of the ceded territory shall be incorporated in the Union of the United States and admitted as soon as possible according to the principles of the federal Constitution to the enjoyment of all these rights, advantages and immunities of citizens of the United States, and in the mean time they shall be maintained and protected in the free enjoyment of their liberty, property and the Religion which they profess.



This pretty clearly seems to say "We will divy up the land into states as soon as is feasible; in the meantime, resident of the acquired territories will be treated as American citizens."

- AC

PS I like the map. Here is one I find even more interesting, for reasons that I hope are obvious.

http://en.wikipedia.org/wiki/Image:Federalland.gif
8.17.2007 8:23pm
Anonimus Cowardius (mail):
Calmom -

Well put. In describing my ANWR proposal to someone else, I used nearly the same terms. Something like, "If the lower 48 wants to lock up ANWR, well, literally, what's it worth to them? Let the negotiations begin!"

- AC
8.17.2007 8:31pm
Jonathan H. Adler (mail) (www):
J.F. Thomas --

You wrote:
Your empirical data consists mostly of evidence collected about the cutting of pine forests in an effort to avoid protecting the red cockaded woodpecker, which I think is a very exceptional case for a number of reasons.

This is incorrect on several counts. Two of the four empirical studies I cite do concern RCWs in the southeastern U.S. The other two do not. One focuses on the Preble's Meadow jumping mouse, and the fourth on Cactus Ferruginous pygmy owl.

The timber owners in the southeast are not seeking "to avoid protecting" the RCW. They are seeking to avoid owning potential RCW habitat, and engaging in otherwise suboptimal timber practices to do so. If you believe this is a "very exceptional case," please explain why. You have yet to do so.

These four studies are, to my knowledge, the only such studies that have been conducted. All four document the same sort of effect, even though they utilize different methodologies. They also support the broad anecdotal claims and observations made over the past decade by conservationists, economists, land rights activists, and government officials.

I also discuss some of the circumstantial evidence that supports my claims. It is well-documented in the conservation literature that endangered species are faring worse on private land than on federal land, even though private land tends to be ecologically superior in many respects. Moreover there is not a single example of an endangered species that recovered due to the enforcement of section 9 on private land -- not one. Various reforms, such as "safe harbors" appear to be helping some species on private land now, but these reforms operate by effectively turning off the ESA's land use controls.

Do you know of any studies that reach opposite conclusions from those I cite? If not, I'm happy to rest this part of my argument on the combined weight of these four empirical studies, the economic theory, the anecdotal observations, and the broader circumstantial evidence.

You further wrote:
There are serious flaws in your argument, the first being that determining the loss (or gain) in value from environmental regulations is difficult at best and in many cases, simply impossible.


This is hardly a flaw in my central argument. Whether it is difficult to determine the precise amount that a landowner should be compensated is separate from whether requiring such compensation (in combination with other reforms) would help or hurt environmental conservation.

I also think you vastly overstate this concern. Determining the loss or gain from land-use controls can be difficult, but it is hardly impossible. There is little reason to believe that estimating the proper level of compensation will be much more difficult than in many traditional eminent domain context, but this hardly means we should stop requiring compensation when land is taken via eminent domain -- and it hardly means that requiring such compensation does not have other desirable effects.

Where, as here, land-use regulations are essentially being used to condemn easements of varying stringency across private land to ensure the provision of various public goods (habitat, wetlands, etc.), it should be possible to determine the approximate value for such easements. Moreover, if compensation must be paid, there is reason to expect that landowner willingness to sell easements, enter into voluntary conservation agreements, or adopt more ecologically sensitive management practices will increase.

I may well need to beef up this section of the paper, adding more on the literature examining what makes landowners willing to participate in such programs and documenting that such measures are less expensive than outright land acquisition. But you have yet to offer any reason to suggest that my argument is flawed.

You further wrote:
But of course, in your world government action is always a net negative that must always be compensated for and will always be a simple calculation.

Wrong again. I don't think government action is always a "net negative." I tend to be suspicious of government, but whether it is a net positive or negative is, in many cases, an empirical question. I offer many reasons why this sort of government action is likely a net negative on purely environmental grounds -- ignoring the other arguments against it -- and I am genuinely interested in evidence and arguments to the contrary, but you have offered neither.

I should also add that this paper effectively advocates government action to "subsidize" the production and protection of environmental public goods, and suggests that substituting this sort of government action for uncompensated regulation is likely to be a net positive over the status quo in many instances. Again, if you evidence or arguments to the contrary, I am eager to hear them.

JHA
8.17.2007 8:58pm
Larry Fafarman (mail) (www):
The compensation to landowners is not always direct monetary compensation in tax dollars. Around Lake Tahoe, landowners who were not allowed to build on their land were compensated by being given building permits which they could sell to neighbors who were allowed to build on their land. One landowner sued the government, saying that she could not sell the permits for enough money to adequately compensate her for the loss of value to her property. The 9th Circuit federal court of appeals ruled that she did not have standing to sue unless she first tried to sell the building permits. The US Supreme Court reversed that decision, giving her standing to sue. See http://library.findlaw.com/1997/Oct/1/130923.html
8.17.2007 10:07pm
Jason Fliegel (mail):
Alaska is second only to New Mexico in terms of federal dollars received per dollar of federal taxes -- see here. I don't think "the Lower 48 must bribe us to keep us from drilling in ANWR" is such a good argument.
8.17.2007 11:40pm
Truth Seeker:
If two equally developable properties are zoned Agricultural and then one is rezoned to allow commercial development, the property owner has suddenly gained a tremendous amount of value in their land from the government action.

Wrong. The default should be freedom. Anyone is free to develop. If government wants to take that right it should compensate anyone whose rights are taken.

(You have to take strong freedom stands to compensate for all the collectivists.
8.18.2007 12:13am
Truth Seeker:
My feeling is that if the public really feels that a particular open space is important, they will support paying for it. It's simply not fair for the burden to be placed on a few landowners when all residents will benefit.

Exactly.
8.18.2007 12:16am
Sba:
"Alaska is second only to New Mexico in terms of federal dollars received per dollar of federal taxes -- see here. I don't think "the Lower 48 must bribe us to keep us from drilling in ANWR" is such a good argument."

The Federal Government also owns 65% of Alaska, so that contributes to the dissproportionate amount of taxes flowing there.
8.18.2007 1:12am
Larry Fafarman (mail) (www):
If two equally developable properties are zoned Agricultural and then one is rezoned to allow commercial development, the property owner has suddenly gained a tremendous amount of value in their land from the government action.

As I suggested, one possible solution to this problem is to give development "credits" to the agricultural-property owners for sale to the commercial-property owners to permit development of the commercial properties. This is sort of the same idea as the trade in "pollution credits" -- there is no expense to the government.
8.18.2007 2:03am
calmom:
But usually a developer indicates interest in a certain piece of property but purchase is contingent on getting the city to rezone the land as commercial. If the rezoning doesn't happen neither does the sale. They don't buy the property outright and then hope for rezoning.
8.18.2007 1:13pm
Larry Fafarman (mail) (www):
But usually a developer indicates interest in a certain piece of property but purchase is contingent on getting the city to rezone the land as commercial. If the rezoning doesn't happen neither does the sale. They don't buy the property outright and then hope for rezoning.

I was talking about a situation where the properties are already owned and there is sudden unanticipated rezoning or land-use restriction of some of the land. I gave the example of where landowners near Lake Tahoe who were not allowed to build on their land were given development "credits" which they could sell to neighbors who could use the credits to permit development. One landowner sued, claiming that she could not sell the development credits for enough money to adequately compensate her for the loss of value to her property. See --
http://library.findlaw.com/1997/Oct/1/130923.html
8.18.2007 1:48pm
ReaderY:
I would suggest that it depends on where one is on the curve of evolving social expectations and social morality. When one is introducing legislation that is way ahead of and attempting to shape those expectations, compensation may be an effective means of achieving buy-in to the new paradigm and worth the net social cost. But society is entitled to enforced long-standing social expectations without cost.

Restoring wetlands and the like may still be ahead of the curve, but we shouldn't have to pay people not to pour poison into the drinking water.

Perhaps compensation schemes should have a sunset provision to encourage people to comply now, before it becomes a routine expectation.
8.19.2007 7:37pm
TruthInAdvertising:
"Wrong. The default should be freedom. Anyone is free to develop. If government wants to take that right it should compensate anyone whose rights are taken. "

That's all well and good but ignores the reality that zoning goes a long way to creating value in land that otherwise would not exist. If all property can be developed commercially, the market is likely to force down the value to each individual landowner as prospective developers can play the property owners against each other to achieve the best sale price. But when zoning artificially limits the inventory of land that can be developed for commercial development, the landowner lucky enough or well-connected enough to own that land has gained a huge potential financial benefit over other land owners who don't get the same zoning classification.
8.20.2007 12:16am
J. F. Thomas (mail):
Wrong again. I don't think government action is always a "net negative." I tend to be suspicious of government, but whether it is a net positive or negative is, in many cases, an empirical question. I offer many reasons why this sort of government action is likely a net negative on purely environmental grounds -- ignoring the other arguments against it -- and I am genuinely interested in evidence and arguments to the contrary, but you have offered neither.

I guess the best way to address your question is to ask how good a view you have from your office. Do you have a view of Lake Erie? That anyone can look out on Lake Erie or Cleveland who remembers the Cleveland of my youth (I grew up in Cleveland in the '60s) and argue that "this sort of government action" is a net negative. There is no doubt that it cost private interests literally billions of dollars to clean up the nation's air and water, yet the results are clear.

I am no expert on the ESA, wetlands and flood control are my expertise. And there is no doubt that you are presenting a vastly oversimplified view of that. First of all, in many cases, the only reason the lands have any value at all is because of the availability of Federal Flood Insurance or the construction of flood control structures. So the value of the land is created by Federal programs in the first place. People sue because federal programs have increased the value of their land from nothing (because they are on flood plains or wetlands that would have been unsuitable for building), but then the government comes to its senses and now says, "well we probably shouldn't have told you you could build there in the first place." Often times there is no loss in value, just a loss in expectation of value (i.e., I bought this piece of land cheap because I thought I would be able to build a nice beach house).

People who live in flood prone areas are basically ungrateful whiners. If the government tells them they can't fill in their wetlands or build another house because it might flood their neighbors, they scream bloody murder because the big bad federal government is "taking" their property. But if their neighbor fills in his wetland or builds a building and they flood, or they can't get cheap flood insurance, they are the first to run to the Corps of Engineers or their Congressman demanding they do something about it.
8.20.2007 11:57am
Jonathan H. Adler (mail) (www):
J.F. Thomas --

First, I made clear in my paper that I was not discussing pollution control regulation. "This sort of government action" refers to environmental land-use controls, not pollution controls. Section 9 of the ESA has nothing to do with pollution control nor, in most instances, does the enforcement of Section 404 to prevent the filling of wetlands. So, the costs to private parties of government regulations to control pollution are irrelevant to my argument in this paper.

Second, I find it interesting that you reference Cleveland's experience, as I have done extensive research on this, documenting both a) that improvements began before federal regulation, b) that the federal government was exceedingly lax in enforcing traditional prohibitions on the harming of truly navigable waters, and c) the federal government contributed significantly to pollution problems in Lake Erie. See, e.g., my paper "Fables of the Cuyahoga."

I think we agree that many recipients of government subsidies are "ungrateful whiners." There is no question that the federal government has heavily subsidized the development and destruction of wetlands. (I've detailed much of this in one of my prior papers, "Wetlands, Waterfowl, and the Menace of Mr. Wilson," at 29 Envtl. L. 1). The answer to this, in my view, is to eliminate these subsidies before we limit the property rights of the landowners.

If all that is lost is a landowner's expectation of value -- but there is no loss in the actual value of the property -- there is no problem, and no compensation would need to be paid. Ditto if the property loses value due to the removal of a government subsidy. Compensation is only an issue when the government prevents the landowner from making a traditional, productive use of the land AND that regulation lowers the property value.

I also note that you have not renewed or expanded on your earlier objections. I take it then that I have adequately answered these concerns.

JHA
8.20.2007 12:11pm
J. F. Thomas (mail):
If all that is lost is a landowner's expectation of value -- but there is no loss in the actual value of the property -- there is no problem, and no compensation would need to be paid. Ditto if the property loses value due to the removal of a government subsidy. Compensation is only an issue when the government prevents the landowner from making a traditional, productive use of the land AND that regulation lowers the property value.

You seem to have a deep misunderstanding of the Federal Flood Control Program and wetlands regulation (something that is shocking in a law professor who apparently claims to be an expert in the interplay between federal regulation and private property). It is not simply a matter of the Federal government providing flood insurance to property owners in flood prone areas and building an occasional dam or levee to control flooding. It is a national program that includes entire ecosystems, river systems (the Mississippi drains the 2/3 of the U.S. plus parts of two Canadian provinces), and includes building codes, density restrictions, zoning, complete exclusion from building in other areas, and a myriad of rules and regulations meant to minimize the hazards of the very dynamic system that is created by flowing water.

By its very nature, flood control policy is ruled by uncertainty. The best engineering practices to minimize the threat of flooding also change over time. For the government, or even private landowners, to place value on land as though the government had not interfered with it and have the government pay the difference is an exercise in futility and would bring the system to a halt.

And again, it seems your scheme is all one-way. You would have the government compensating landowners for the loss in value in their land but they would not be compensating the government directly for improvements (e.g. flood control structures like levees and dams) that are borne by the country as a whole. How on earth is that equitable. Unless you are willing to go back to a pre-1850's flood control scheme (i.e., none), who is going to maintain the levees and dams on our major waterways?
8.20.2007 2:03pm
Mr. Impressive (mail):

I tend to be suspicious of government, but whether it is a net positive or negative is, in many cases, an empirical question.


First, this admitted bias against government is why we should scrutinize everything you say with extreme skepticism. Your suspicious of government. We should be suspicious of you.

Second, whether something is a net positive or negative is an empirical question, but it is not an objective one. What counts as a negative or positive and, just as importantly, how important (i.e. what magnitude) of a negative or positive, is a normative judgment.

Third, the fact that normative judgment is such a large factor in determining negatives or positives is perhaps reason enough to discard your conclusions altogether. You already admit to being biased against government. It thus seems likely that your normative judgment is likely to be compromised by that bias. This is not insult, merely a realistic point that people who want to believe something tend to find reasons to believe that something. Here, you want to believe that less government is the answer. And low and behold, you so find. Maybe I am being too cynical, but in any case, extreme skepticism towards your work is warranted.
8.20.2007 7:56pm
Jonathan H. Adler (mail) (www):
J.F. Thomas --

I think you are the one with a misunderstanding. Of course flood control efforts are broad and far-reaching. But so what? Section 404 of the Clean Water Act -- one of the federal restrictions I focus on in the paper -- imposes restrictions upon private land use independent of the application of any flood control programs, including local floodplain ordinances. [Indeed, there is evidence I cite in the paper indicating that such ecological concerns rarely factor into actual 404 permitting decisions.]

To require compensation for the imposition of restrictions under Section 404, and other restrictions that operate independently of funding and insurance programs and that do not produce reciprocal off-setting benefits, would not "bring the system to come to a halt." It would require the replacement of regulation with non-regulatory alternatives where the regulations were not cost-justified. Further, were the federal government not subsidizing so much development in flood prone areas in the first place, there would also be less of a problem.

My proposal is also not "one-way." Property owners already pay for the costs of various improvements through their taxes, various user-fees and the like. Insofar as government actions increase property values, in most jurisdictions the property owners will end up paying higher property taxes -- as they should. Insofar as the federal government imposes cross-subsidies -- taxing Peter to protect Paul -- this does not justify imposing further burdens on Peter and Paul alike. If Peter is subsidizing Paul's flood insurance, for instance, this is a problem. But it does not mean that Paul should lose the right to make productive use of his land. [If federal money comes with explicit strings attached, however, that is a different story.]

Mr. Impressive --

We all have our biases. By your standard, I should discount most everything you post in the comments -- a policy I will try and follow in the future.

JHA
8.20.2007 8:39pm
Mr. Impressive (mail):

We all have our biases. By your standard, I should discount most everything you post in the comments -- a policy I will try and follow in the future.


I am glad that you find my argument to be not only persuasive, but also compelling.

The fact is, I do not find it particularly surprising when someone, whether a liberal or conservative, libertarian or communist, just "so happens" to come up with a result, that (oh so shockingly!) supports their ideology. This problem of bias is not limited to you by any means.

If you are going to apply the same skepticism to my arguments that I apply to your arguments, I as a pragmatic skeptic, can only say that this is a good thing.
8.21.2007 12:40am
J. F. Thomas (mail):
Property owners already pay for the costs of various improvements through their taxes, various user-fees and the like.

Well, there is where you are completely wrong. The residents of a medium sized midwestern town along the Mississippi or the Ohio River could not hope to pay for the value or cost of their levees let alone the individual landowners that live in rural communities or outside towns along the levees. That is why the cost is borne by all taxpayers, some who live in the middle of the desert and are never threatened by floods. And of course, flood protection is but a portion of the program, the farms and industries of the nation also rely on the cheap transportation routes created by the navigation channels created by the system of locks, dams and levees created by, and complemented by the flood control system. Unfortunately, the effort over the last one hundred fifty years to control floods and improve navigation has had a negative impact on our wetlands, which also mitigate flood damage. It is not unreasonable for the government which has created so much value for people who live in flood prone areas, to restrict construction in those same areas without compensation to the affected landowner.
8.21.2007 9:45am