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Free Markets Meet Public Lands

How PERC’s ideas are improving federal land management

  • Hannah Downey
  • For 40 years, PERC has demonstrated how to improve environmental quality using property rights and markets. During that time, we have applied our research to a variety of environmental policy issues such as water markets, endangered species conservation, and marine fisheries. In recent years, much of our policy work has focused on public land management, where private property rights and markets are typically nonexistent.

    What does free market environmentalism have to do with public lands? At its core, free market environmentalism is based on the idea that incentives matter. It focuses not only on the incentives that motivate private actors in the marketplace, but also the incentives facing government agencies and policymakers and asks how those incentives can be better aligned to promote good management. 

    The reality is that many natural resources are owned or managed in some way by governments. The National Park Service operates more than 400 park units covering more than 85 million acres across the United States. The Bureau of Land Management, the nation’s largest landowner, manages 245 million acres and oversees everything from wild horses and burros to oil and gas leases. Congress writes laws pertaining to wilderness areas, wildfire management, and everything in between, in addition to appropriating the budgets of the federal land management agencies. The president can even designate national monuments with the stroke of a pen. 

    With such far-reaching government control, most decisions about public land use are not based on markets, or even science, but rather on politics. That means that short-term priorities driven by election cycles, political whims, and special interest groups often prevail over longer-term considerations that could produce more reliable and sustainable conservation outcomes. The challenge for groups like PERC, then, is to find solutions that account for these realities and provide better incentives to conserve publicly managed resources. 

    Consider the backlog of deferred maintenance on our public lands. Today, federal land agencies are saddled with almost $20 billion in overdue maintenance projects, including leaky wastewater systems, crumbling roads and trails, and dilapidated visitor facilities. The National Park Service alone faces nearly $12 billion in deferred maintenance, an amount that is more than four times the agency’s annual budget.

    Why such neglect? The problem boils down to incentives. Parks and other public lands rely on Congress for the vast majority of their funding, but politicians are often more interested in acquiring new lands or creating new parks than funding basic maintenance on existing public lands. After all, no one runs for reelection on a promise to fix leaky roofs and keep toilets clean, but flashy ribbon-cutting ceremonies for new parks draw good press and public praise.

    At its core, free market environmentalism is based on the idea that incentives matter.

    For decades, PERC scholars have emphasized the need to “get the incentives right” to better address deferred maintenance needs in our national parks and other public lands. In particular, that means making parks less reliant on the political appropriations process and empowering local managers to tackle routine maintenance issues to prevent the backlog from growing.

    Thanks in large part to PERC’s efforts on this topic, deferred maintenance has become a focus of national discussions about public land policy. In fact, a bill that is now before Congress—the Great American Outdoors Act—would create a dedicated fund to help tackle the problem. The fund, derived from energy development on federal lands and waters, would generate up to $9.5 billion over five years and could be spent by public land managers without additional authorization from Congress. It would provide immediate money for high-priority deferred maintenance projects, and it would also incorporate market mechanisms to provide funding for longer-term needs. A portion of the fund could be invested, and the interest earned would be available to address future maintenance projects. Importantly, the fund could not be spent on land acquisition, ensuring it doesn’t further thin the management resources of federal agencies.

    While the creation of such a fund is an important step, it won’t completely solve the problem. User fees help provide additional funding that can further insulate parks from the uncertainties of political appropriations. PERC has long supported the Federal Lands Recreation Enhancement Act, which allows federal land agencies to charge visitor fees at developed sites and retain and spend most of the revenue where it is collected. The revenues can be spent by local managers free from political influences and are used to enhance visitors’ experiences, including maintenance projects. Much of PERC’s current policy work explores how to expand such user-pays models to give managers flexibility while encouraging sound management. 

    PERC is also addressing the wild horse crisis on our public lands. Nearly 100,000 wild horses and burros roam on public lands in the American West, about four times the capacity designated by the Bureau of Land Management. This skyrocketing population degrades rangeland ecosystems and costs hundreds of millions of dollars to manage each year, which includes housing nearly 50,000 excess horses in long-term, off-range, taxpayer-funded holding facilities. For years, the BLM tried to gather and adopt some of these excess horses to private homes, charging $125 per animal, but the approach made little sense—it required payment for a wild horse, even though the horse was a public liability—and it largely failed. Taxpayers ended up footing the bill for unadopted horses that remained in expensive off-range holding facilities.

    Research by PERC scholars found that if the BLM paid people to adopt wild horses—rather than requiring people to pay to do so—more horses would be adopted, and the agency would save a great deal of money by reducing its holding facility costs. Prompted by this research, last year the BLM started to pay $1,000 for each wild horse adoption. With a financial incentive to help people cover the costs associated with taking in a horse, such as training and feed, wild horse and burro adoptions increased 91 percent in the first year of the payment program, saving taxpayers $170 million

    Incentives matter. Whether on public or private lands, effective conservation policy requires getting the incentives right. For decades, we have sought to educate policymakers on policies and institutions that motivate long-term environmental success. We aim to do the same in the decades to come.

    Written By
    • Hannah Downey
      • Policy Director

      Hannah Downey is the policy director at PERC, helping to bring PERC ideas to the policy world.

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