The public trust doctrine is a little-known bit of legal history that is now touted as an ancient rule of law that allows governments to control property long presumed to be privately owned.
PERC senior fellow Jonathan Adler is a longtime writer for the popular law and public policy blog The Volokh Conspiracy, which recently announced a new partnership with the Washington Post.
Terry Anderson, Reed Watson
Montana's Stream Access Law has led to an erosion of property rights and reduced public benefits flowing from private lands. Isn’t it time to say enough is enough?
The next time you fly in or out of Bozeman, Montana, remember Ronald Coase and his wisdom about markets as problem solvers.
Michael `t Sas-Rolfes
The U.S. Fish and Wildlife Service is about to destroy 6 tons of confiscated ivory. But does the destruction of ivory stockpiles really help the cause?
The Supreme Court has granted certiorari in Utility Air Regulatory Group v. EPA concerning the Environmental Protection Agency’s regulation of greenhouse gases under the Clean Air Act. PERC's Jonathan Adler explains.
The death this week of Ronald Coase, one of the world's most-cited economists, comes at a time when there is lively debate about the very issue he raised: why neither markets nor government are panaceas.
The existence of “externalities” — effects (costs or benefits) of market transactions that are not experienced by those involved in the transaction, but are instead experienced by others, those “external” to the transaction — is routinely proffered as a justification fo
I am stunned and saddened to learn that Nobel Laureate economist Ronald Coase has died.
It’s a conservation debate that’s as fiery as it gets: Will a legal rhino horn trade save rhinos? Michael 't Sas-Rolfes believes a well-regulated trade is the right answer, and here's why.
Spots versus stripes? Which do you prefer? Our federal government prefers spots and is moving forward with a million-dollar-a-year plan to remove 9,000 striped owls from western forests.
Laura Huggins sat down recently with fly fishermen Miles Noles to discuss the upcoming Montana Supreme Court case on stream access. Huggins discusses PERC's position on stream access and her experience fishing Montana's rivers and streams.
Private ownership is the key to good resource stewardship. As Terry Anderson explains, stream access laws undermine property rights and reduce landowners' incentives to provide habitat for fish and wildlife.
Tribes that can resist the temptation to extract wealth at the expense of future growth have the best hope of overcoming poverty and becoming truly sovereign.
This morning the U.S. Court of Appeals for the D.C.
Today the Supreme Court will hear oral argument in a potentially important takings case, Koontz v. St. Johns River Water Management District.
PERC begins a colloquium this week on property rights and liberty in Native American societies. The program focuses on the historical emergence of property rights and how these rights have impacted Native Americans.
Since 2005, 42 states have adjusted their eminent domain laws to better protect private property rights. How does your state's eminent domain law stack up?
Reed Watson, Terry Anderson
In the Supreme Court of the State of MontanaSupreme Court Case No. 12-0312PUBLIC LANDS ACCESS ASSOCIATION, INC., Petitioner/Appellant,v.
Denis and Barbara Prager fear the day that hydraulic fracturing takes place on their land in the Shields Valley of Montana.
H. Spencer Banzhaf
In the first book-length examination of environmental justice from the perspective of economics, a cast of top contributors evaluates why underprivileged citizens are overexposed to toxic environments and what policy can do to help.
Today’s decision by the U.S. Court of Appeals for the D.C. Circuit in Coalition for Responsible Regulation v.
Will 2012 provide a repeat of 2012? Specifically, will the Supreme Court’s October 2012 term find the Supreme Court repeatedly reversing the U.S. Court of Appeals for the Ninth Circuit in environmental cases as it did in the October 2008 term? In 2008, the Supreme Court heard an unusually high number of environmental cases, six: Winter v. Natural Res. Def. Council, Summers v. Earth Island Inst., Entergy Corp. v. Riverkeeper Inc., Coeur Alaska, Inc. v. Se. Alaska Conservation Council,Burlington N. & Santa Fe Ry. Co. v. United States and Shell Oil Co. v. United States (the latter two of which were consolidated). In all of these cases, the side favored by environmental groups had prevailed below, and in all of these cases the Supreme Court reversed. Equally notable, however, was that all but one of these cases (Entergy) came from the Ninth Circuit. To some the Supreme Court’s October 2008 term showed the Roberts Court lacked sympathy for environmentalist positions. To others, it was further evidence the Ninth Circuit was out of step on environmental issues.2012 could provide a repeat of 2008 because the Supreme Court is being asked to grant cert in several cases from the Ninth Circuit that are potential outliers in environmental law. As Richard Frank notes at Legal Planet, the Court will consider the such cases in tomorrow’s conference – Pacific Merchant Shipping Assn. v. Goldstene, Georgia-Pacific West, Inc. v. Northwest Environmental Defense Center (along with Decker v. Northwest Environmental Defense Center, another petition from the same case), and Los Angeles County Flood Control Dist. v. Natural Resources Defense Council – all three of which have been identified among SCOTUSBlog’s “Petitions to Watch.” Of note, the Solicitor General has recommended against cert in all three cases even though the Department of Justice believes the Ninth Circuit was wrong all three times. According to the SG, each decision was wrong, but not cert-worthy.In the normal course of affairs, an SG brief recommending against cert is a likely indicator that the Supreme Court will deny certiorari. Yet that has not been the practice of late in environmental cases. The Supreme Court has taken quite a few environmental cases in which the federal government lost below but nonetheless urged the Court to take pass, including Entergy, Coeur Alaska,Monstanto v. Geerston Farms, and Environmental Defense v. Duke Energy. It’s almost as if the Roberts Court does not trust the judgment of the SG’s office as to whether environmental cases are cert worthy.Among the cases on the docket for tomorrow, Georgia-Pacific West v. Northwest Environmental Defense Center is worth some attention. In this case, the Ninth Circuit rejected the EPA’s judgment that stormwater runoff from timber roads do not need NPDES permits under the Clean Water Act. This decision overturned years of settled practice, and industry’s cert petitions have been joined by numerous state and local government amici. The petition has even gotten a boost from a somewhat unlikely source: Judge Milan Smith of the Ninth Circuit. In a flowery en banc dissent in another case, Karuk Tribe of California v. USFS, Judge Smith identified the Ninth Circuit’s decision on logging roads as one of several wrong-headed opinions from his court. Given the timing of his dissent (excerpted below the fold), it’s hard not to read it as a cert petition from the bench. Monday we should learn if the Supreme Court heeded Judge Smith’s call — and perhaps whether the Ninth Circuit is due for another environmental correction.
The Washington Post reports the Environmental Protection Agency will release proposed regulations gover
The regulators lost to the regulated yesterday in Sackett v. Environmental Protection Agency.
In 2006, Ilya Somin and I co-authored “The Green Costs of Kelo: Economic Development Takings and Environmental Protection,” in which we argued that allowing the use of eminent domain for eco
Today the U.S. Court of Appeals for the D.C. Circuit will begin two days of oral arguments in a set of challenges to the EPA’s various rules applying the Clean Air Act to greenhouse gas regulations.
by Brennan Jorgensen
This morning I received a CNN “Breaking News” alert that “President Obama said today he is elevating the Small Business Administration to a Cabinet-level agency.” My first reaction was utter disbelief.
Back in 2007, Congress created a biofuels mandate under which oil companies are required to use a minimum amount of cellulosic ethanol each year. The mandate was supposed to encourage the development of a domestic cellulosic ethanol industry. This has not happened.
At SCOTUSBlog, Lyle Denniston characterizes the oral argument in Sackett v.
Today the Supreme Court hears oral argument in Sackett v. EPA, a challenge to the federal government’s claim that landowners (and other regulated entities) may not obtain pre-enforcement review of an administrative compliance order under the Clean Water Act.
Today the House of Representatives is expected to vote on the REINS Act, a bill to enhance political accountability over regulatory decisions. The bill has two essential features.
There has been plenty of confusion surrounding
One of the hypocrisies of modern environmental law is its double standard of enforcement: strict application to small entrepreneurs, and exemptions for politically powerful players like large industry and municipalities.
The WSJ’s Jess Bravin reports on an interview with recently retired Justice John Paul Stevens in which he defended his “most unpopular opinion” — Kelo v.
Others have commented on President Obama’s decision to punt on the Keystone XL pipeline project.
In 2002, federal reguators predicted it would take between 18-months and three-years for the proposed Cape Wind energy project in Nantucket Sound to receive federal approval.
Our Q&A series continues this week with Bruce Pardy, a professor in the Faculty of Law at Queen’s University in Kingston, Ontario, Canada. Pardy has written extensively on matters of environmental law and governance, including ecosystem management, environmental assessment, civil and regulatory liability, climate change, and water law. He has taught at law schools around the common-law world, including Canada, the United States, and New Zealand.Professor Pardy is a 2011 PERC Julian Simon Fellow. He is currently writing a book called A Natural Law of Systems: Ecosystems, Markets, and the Meaning of Liberty.Q: What is legal instrumentalism? How does it differ from the rule of law?A: Legal instrumentalism is based upon the premise that the role of government is to solve specific problems by specific means. It is a “hands-on” way to govern. As the label suggests, legal instrumentalism says that law is important only as an instrument to achieve the “right” result. In other words, law is a means to an end, or a tool for the social good. The problem, of course, is that, like beauty, the right result lies in the eyes of beholder, and differs from person to person. Down that route lies the tyranny of the arbitrary rule of persons. The premise of the rule of law is that government decision-makers are not free to do as they think best because they are bound by generally applicable, abstract rules that bind governments as well as citizens. Brian Tamanaha of Washington University Law School has aptly pointed out that instrumentalism and the rule of law are the two core ideas of the American legal system, but in certain crucial respects they conflict. Although governments today widely claim to believe in the rule of law, their behavior is predominantly instrumentalist in nature.Q: Thomas Aquinas proposed another category: natural law. What is natural law and what are some difficulties that arise in its application? Conversely, what occurs in the absence of natural law?A: The premise of natural law is that there are objective moral truths that apply to all human beings upon which laws should be based. Natural law purports to contain inherent, substantive limits on what legislatures and judges can do, because it is a “higher” law, based upon universal and immutable moral principles, whose purpose is to reflect what is good for human beings. The problem is that the many volumes of moral reasoning produced by philosophers and legal theorists over the centuries illustrate the opposite truth: moral standards are personal, arbitrary, subjective, and cannot be proven to be otherwise. Since natural law claims to be based upon moral absolutes rather than public opinion, it is not sufficient to establish their validity by pointing to majority opinion or public consensus. The agreement of a majority of people about moral absolutes simply means that they agree, not that the moral absolutes that they believe in are, in fact, absolute. Twenty years hence public opinion may have shifted, but by definition moral absolutes never do. If the real criterion is majority opinion, then the principle of basing laws upon universal morality is a fiction. But in the absence of natural law, law is a vacuum, able to be filled by whomever is powerful enough to take the reins. What is needed is an objective, non-arbitrary set of principles on which law can be based.Q: What do ecosystems and markets have in common?A: Markets and ecosystems run themselves. These systems are not just collections of things, like widgets or frogs, but consist of elements interacting in a complex web of relationships and patterns that together amount to phenomena different from the sum of their parts. They operate according to their own immutable characteristics and rules, and share important features. They are organic and evolutionary, changing through time, rather than existing in a fixed or static state. They arise spontaneously, and their fundamental rules have not been created or invented by human beings, and cannot be changed by government design. All participants are equally subject to their forces; systems do not play favorites.Q: In your paper, “The Hand is Invisible, Nature Knows Best, and Justice is Blind” [PDF], you write that, “Human action can affect the outcome of system processes, but it cannot change the nature of those processes.” Does this eliminate the need for laws that apply to markets and ecosystems?A: The immutability of ecosystems and markets does not mean that there cannot or should not be laws that apply to them. Calling these systems “immutable” does not mean that they are impervious to external forces, but only that their internal principles are independent of state regulation, moral argument, or personal preference. Their protection is not a mandate to be performed “in the public interest.” It is not because someone has deemed them to be socially valuable that the law should provide for their operation. These systems exist. People live within them, because they cannot do otherwise, and depend on them for survival. They follow their own rules, because they can do nothing else. They cannot be manipulated or changed to behave differently, and efforts to do so are misguided. Instead, legal rules and principles need to account for the manner in which they operate.
Last Thursday, at a congressional hearing, Assistant U.S.
The Yale Law Journal’s new “Summary Judgment” online series features a set of essays on the Supreme Court’s decision in
The New York Times tries to provide some perspective to the renewed debate over the economic effect of envir
Grist reports on a class-action suit that is being filed against ConAgra for allegedly deceptive marketing of its various vegetable oils.
by Andrew Balthrop, a PhD student in economics at Georgia State University and 2011 PERC Graduate Fellow.
According to the U.S. Bureau of land management, wind power is the fastest growing energy technology in the United States. With this growth comes the desire to develop a legal framework for wind rights.
Common law legal actions can easily handle the simple case in which one property owner causes obvious harm to another, what about the not-so-simple case?.
The most significant environmental case of the Supreme Court’s just-concluded term was American Electric Power v.
PERC's latest visiting fellow is Todd Zywicki, the Foundation Professor of Law at George Mason University and senior scholar at the Mercatus Center. He teaches is the area of contracts, bankruptcy, and law and economics. He is the co-editor of the Supreme Court Economic Review and a frequent commentator on legal issues in print and broadcast media. He blogs at The Volokh Conspiracy.Todd is a 2011 PERC Lone Mountain Fellow researching the political economy of Takings law. We thank him for taking the time to answer our questions. See more of PERC's ongoing Q&A series here.Q: You work is heavily influenced by Gordon Tullock and his contributions to the study of spontaneous orders and methodological individualism. How might Tullock’s work be applied to environmental policy and law?A: Tullock’s central insight is that the cost of government policy is not just the misallocation of resources—using resources for lower rather than higher-valued uses. There is an additional cost—the resources that people use seeking preferential treatment from the government. He refers to these as “rent-seeking” costs and they can be quite large. The lessons for environmental policy and law are important: whenever decisions about resource use are moved from the world of private property and contract to the public domain, there will inevitably be rent-seeking costs as well. Thus, even if government makes wise decisions in the end (which it often does not), there will still be the costs of operating the system. And those costs can be large.Q: While you are at PERC you have been working on a project exploring the political economy of the “Takings” law. Can you offer a brief overview of the government’s eminent domain or Takings power?A: The Takings power permits the government to seize private property for public use so long as it pays “just compensation” for the property taken. This enables the government to seize property to build roads, schools, etc.Q: You have pointed out that law and economic analysis has been invoked to justify increased discretionary power for the government to take private property for public use such as in the case of Kelo v. New London. What is missing from this analysis?A: In Kelo many law and economics scholars have posited that the challenges confronting a private developer seeking to assemble many parcels of land in order to build an office building are identical to those of the government when it wants to build a school or post office. The underlying problem, it is claimed, is a hold out problem that landowners might try to hold out for a premium price, thereby killing the project. I argue that the situations are not analogous. In particular, when building an office building there are many similar alternative sites where the building might be constructed and so as a result the developer can shop among many different parcels of land, thereby eliminating the hold out problem. Governments might have less ability to do that (or perhaps not). So I argue that even if one supports allowing the government to use the Takings power to overcome hold out problems, that does not support using the power for private developers in a case like Kelo. Moreover, there is a second point—to the extent that there are not comparable substitutes in Kelo it is only because the City of New London, in that case, gave Pfizer a bunch of subsidies and benefits to encourage development there. As a result, Pfizer felt compelled to build in New London. But that is merely an artificial distinction among different parcels of land that should not justify using the Takings power to later overcome the hold out problem that prior intervention creates.
Cap and trade, a favorite of statists and even many economists who otherwise are not statists, continues to be touted as a great sc
Cross-posted at Grist.A recent post on Grist attempted to dismantle the intellectual foundations of free market environmentalism—the application of markets and property rights to solve environmental problems. But far from toppling a burgeoning movement within modern environmentalism, it succeeded only in misrepresenting the subject.To recap: Clark Williams-Derry claimed that while free market environmentalism may be effective in some areas of the environment (e.g., fisheries management), its reliance upon unrealistic assumptions about the real world largely relegates it to useless intellectual theorizing. In particular, the Coase theorem—an important component of market-based environmentalism named for Nobel Prize-winning economist Ronald Coase—amounts to “a quirky but not particularly relevant bit of theoretical math.”While there is certainly much more to free market environmentalism than the work of Coase (see Terry Anderson and Donald Leal’s book Free Market Environmentalism for more details), I focus here mostly on the misinformed critique of Coase that has been used to discredit free market environmentalism.So, who is Coase, what is his theorem, and what does it have to do with free market environmentalism?
by Shawn Regan Over at Forbes.com, Art Carden pens this gem of a poem that retells Dr. Suess's classic "How the Grinch Stole Christmas" using property rights, Pigouvian taxes, and the Coase theorem--important concepts in environmental economics: How Economics Saved Christmas by Art Carden Every Who down in Whoville liked Christmas a lot.But the Grinch, who lived just north of Whoville, DID NOT.He stood and he hated the Whos and their noiseHe hated the shrieks of the Who girls and boysFor fifty-three years he’d put up with it now—He had to stop Christmas from coming, somehow.He asked and he questioned the whole thing’s legalityThen his eyes brightened: he screamed “externality!”He reached for his textbooks; he knew what to doHe’d fight them with ideas from A.C. PigouThis idea has merit, he thought in the frostA tax that was equal to external costAt the margin, would give all the Who girls and boysAn incentive to stop all their screaming and noiseFailing that, an injunction to make them all ceaseAnd they’d have to pay him to have their Roast Beast.
by Paul Schwennesen
Federal flood water intrudes on private property