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The Rise of the Enviro-Capitalists

Wall Street Journal
August 26,1997

By Terry L. Anderson and Donald R. Leal

A quiet revolution taking
place across the country and around the world is dispelling the myth that environmental
quality must emanate from government. A new breed of environmental entrepreneurs, using
the tools of capitalism instead of command-and- control tactics, are working to preserve
open space, develop wildlife habitat, and save endangered species.

Andrew Purkey of the Oregon Water Trust, for example, wants to obtain greater water
flows on Oregon’s small streams in order to improve the habitat for spawning salmon and
steelhead. Using private donations, he pays users to stop diverting water to which they
are legally entitled. The trust paid Oregon rancher Rocky Webb $6,600 to compensate him
for not growing the hay that he previously grew with water from a small stream running
through his property. Says Webb: "I see it as a step for the positive, to make people
realize there are workable solutions out there."

Then there is Zach Willey of the Environmental Defense Fund. This tall, soft-spoken
environmental economist is also seeking greater water flows for salmon and steelhead, but
on a much larger scale, along the mighty Columbia River in Washington state.

Mr. Willey recognized that massive government-built dams on the Columbia were
threatening salmon runs by raising the water temperature and reducing the currents that
carry young fish to the Pacific Ocean. While the federal government spent billions of
dollars studying the problem it created, Mr. Willey negotiated a trade between Skyline
Farms of Washington state and the Bonneville Power Administration. Skyline Farms will
relinquish diversion rights in return for payments from electricity producers, who will
use the greater flows to generate more hydroelectric power. The deal will add 25,000 to
50,000 acre-feet to Columbia’s flows each season. Both parties stand to benefit, but the
salmon will gain the most.

In the 1980s, International Paper Company biologist Tom Bourland saw profits in
wildlife and recreation on the company’s Southern U.S. timber holdings. By spearheading
efforts to lease the land for hunting and fishing and selling daily recreation permits, he
helped growing timber stands generate considerable profits. Because of his efforts IP’s
wildlife and recreation program has became an important profit center, not an

Peter S. O’Neill, a real estate developed in Boise, Idaho, recognized the growing
demand for natural beauty in an urban setting. He responded by building housing
communities that offer free-flowing trout streams, lush streamside vegetation, and
biologically diverse lakes and wetlands. In one of his early projects he transformed an
ugly flood-control channel into a year-round spawning stream that feeds trout into the
Boise River.

Enviro-capitalism is at work beyond North America as well. Orri Vigfusson, an Icelandic
vodka distiller and fly fisherman, is helping the recovery of Atlantic salmon. On behalf
of the Atlantic Salmon Federation, he secured an agreement from Faroe Islands fishermen
not to net salmon at sea in the north Atlantic. The federation pays the fishermen $685,000
per year in compensation. Three years after the agreement, twice as many salmon returned
to native rivers in Iceland and elsewhere in Europe.

In South Africa, the founders of an eco tourism company have combined environmental
protection and market forces by giving landholders a stake in their profitable business.
To attract environmentally oriented tourists, David Varty and Allen Bernstein, founders of
The Conservation Corporation, are working with the landowners–who are also the
shareholders in the company–to create large habitats for African wildlife, allowing wild
animals to replace the cattle and crops that previously occupied the land.

While enviro-capitalists work independently of government, they cannot function without
a governmental system that respects private property rights and free markets. Often, in
fact, they must overcome government-created hurdles. Before the Oregon Water Trust could
pay water users for their diversion rights, for example, Oregon water law had to be
changed to allow such transactions. Mr. Vigfusson’s success in buying salmon netting
rights cannot be directly copied in much of the world (including most of North America)
because those rights are not privately owned.

Private property rights and free markets have contributed mightily to our
economic wealth. What few realize–especially in Washington D.C.–is that they can
contribute just as mightily to our environmental wealth. Enviro-capitalists are showing
the way.

Terry L. Anderson is Executive Director and Donald
R. Leal is a Senior Associate of PERC. They are authors of Enviro-Capitalists: Doing
Good While Doing Well
(Rowman & Littlefield, Inc.)

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