Vol. 13 No. 7 (July 2003)
POLLUTION AND PROPERTY: COMPARING OWNERSHIP INSTITUTIONS FOR ENVIRONMENTAL PROTECTION by Daniel H. Cole. New York: Cambridge University Press, 2002. 209 pp. Cloth $60.00. ISBN 0-521-80637-2. Paper $22.00. ISBN 0-521-00109-9.
Reviewed by Geoffrey Wandesforde-Smith, Department of Political Science, University of California, Davis. Email: gawsmith@ucdavis.edu .
For more than thirty years, vast quantities of ink and paper have been expended on the questions of institutional choice for resource management and environmental protection that are at the heart of this new, short and absolutely brilliant book by Daniel Cole. A very large proportion of that expenditure of ink and paper, as well as a flood of foundation grants and private sector institutional support, have been lavished upon attempts to explain why existing systems of property rights for environmental goods do not resemble ideal types of property rights regimes—most especially private property.
In a phrase that will long be remembered and associated with his name, Cole writes that these explanations have rarely risen above the level of “facile public choice rhetoric about special interests seeking economic rents in political markets” (p.18). “Where environmental protection is concerned,” says Cole at the end of his book, with another of the nice turns of phrase that will delight his readers and which they will remember and cite for many years, “celebrations of private property are at least premature and arguably utopian” (p.178). This comes after thirty years of persistent touting—especially, but not exclusively by resource and environmental economists—of private property as an institution that environmentalists and environmental policy makers hate but really ought to learn to love.
Cole then goes on to say, quite unafraid to be the proverbial bull in the intellectual china shop:
Private property regimes do not guarantee effective or efficient environmental protection. The reason is not simply the absence of completely defined property rights in all resources but the costs of coordination and exclusion under private property regimes in some ecological, technological, and institutional circumstances. Sometimes ...public/state or common property regimes are preferable. The most we can legitimately claim about private ownership of environmental goods, then, is that it has substantial but not unlimited utility for conservation....The notion that a single, sociolegal institution – private property – is both necessary and sufficient to resolve all environmental problems is not just highly improbable but fantastic (p.178).
Let me be very clear about what I want to say, here, about this book. It will likely find a very, very wide readership in the United States and in many other parts of the world. I think it will become a landmark piece of scholarship. It will very probably become a book that no serious student of environmental policy – lawyer, economist, political scientist, sociologist, or anthropologist – will want to be without.
One reason I make this assessment is that the book is carefully and cleverly conceived, superbly executed, and reasonably readable. Let me qualify that last remark. The book is reasonably readable if you have a predilection for questions of comparative institutional advantage. And it is readable if you have some sense of the major outlines of the intellectual struggle that has dominated the theoretical literature on how best to make and implement resource management and environmental policy at least since Ronald Coase published “The Problem of Social Cost” in 1960 (Coase 1960) and certainly since Garrett Hardin published “The Tragedy of the Commons” in 1968 (Hardin 1968).
Academics will feel most comfortable with the somewhat specialized language used to establish and develop the conceptual framework for the book. Cole does an exceptionally good job, however, of making a difficult subject accessible and I am sure the book will also be widely read, understood, and debated in interest group offices, legislative staff rooms, and agency hallways.
The main reason, however, why the book is going to have a major impact is not that Cole sweeps away with such aplomb the confusions and shallowness of the intellectual orthodoxy sustaining the rhetoric of “private property” as a “solution” to environmental and resource management “problems” for nearly four decades. Many people, including me, would buy and treasure the book even if that were all it did. I still have in my library the copy of Dales’ POLLUTION, PROPERTY, AND PRICES (Dales 1968) that I bought when it first appeared. Cole’s book title is a nice play on that used three decades ago by Dales, whom Cole cites frequently and for the most part generously. And I am happy, finally, to have such a comprehensive and forward-looking statement of what exactly it is about Dales, and the many others who have followed his lead, that has always made me uncomfortable.
The great achievement of this new book by Cole, however, goes beyond putting uncritical advocacy of private property in its place to the outlining of a new research agenda for comparative institutional analysis and choice. Cole wisely makes only modest claims for what he has accomplished in the book itself – a clear and realistic framing of the relationships between environmental protection and property systems (p.179). Any reader worth her salt will have figured out much earlier in the book, however, the central tasks that new work needs to tackle:
Eventually, we may learn enough about how the world works to predict, within a substantial margin for error, how well or poorly alternative property arrangements work to avert the tragedy of open access [to resources] in various circumstances. First, however, we must get beyond the simplistic notion that our environmental problems are all the result of either too much or too little private or public property. Second, we must closely attend to the strengths and weaknesses of alternative property arrangements, the costs of exclusion and coordination (given the ecological, institutional, technological, and cultural circumstances), and historical experience (p.153).
What exactly would new work along these lines involve? Again and importantly, it is not Cole’s purpose in this book to provide a thorough and considered answer to that question. The merest glimpse of an answer does surface, however, in chapter 7, where Cole assesses the shifting use of mixes of private and public property regimes for the protection of Stonehenge in Britain. This part of the book is a minor tour de force. And I think it’s fair to say the same thing about Cole’s critical evaluation in chapter 8 of the poverty of the Supreme Court’s jurisprudence in Fifth Amendment takings cases, that he treats as a prominent example of the legal and political problems that arise when property regimes collide.
This is a summary of what Cole has to say on this topic, a topic that always figures prominently in treatments of environmental law but is rarely handled with the confidence and insight Cole is able to muster:
So long as society relies on multiple property systems and admixtures of property systems for environmental protection – likely a very, very long time – those systems will occasionally collide, raising issues about primacy – which system prevails over another – and who bears the costs arising from property regime conflicts. To date, the US Supreme Court has focused on the second issue, while completely ignoring the first. But ignoring the fact that takings cases often involve conflicts between property regimes will not make those conflicts go away. When deciding whether some public land-use regulation constitutes a taking of private property, the Court should at least consider the public property rights at stake (pp.176-177).
Given the overall structure of the book, some parts are going to be of special interest to the various audiences Cole will reach with this work. This brief essay is not the place to try to explore what all of those special interests might be. Let me rather lay out the general framework Cole adopts and then add just a few additional comments about parts of the book I found especially valuable, above and beyond the treatment of takings jurisprudence in chapter 8.
Cole begins with the challenging task of sorting through – cutting through would be a more apt phrase – the conceptual underbrush that has grown up around the simple observation Aristotle made in the fourth century before the Christian era. Whatever “is common to the greatest number,” Aristotle postulated, “has the least care bestowed on it” (quoted on p.2). But what exactly is the connection between the nature of the property rights people have, or lack, in resources, such as the air, running water, seas, and seashores that were decreed in Roman times to be “common to mankind” by the Institutes of Justinian, and the degradation of these environmental goods?
Cole answers this question by laying out in chapter 1 a conceptual framework for distinguishing among various types of property systems. In theory, at least, one is a nonproperty system of open access to resources. It has been and remains a great source of confusion in the literature on property regimes that Garrett Hardin referred in his classic 1968 essay (Hardin 1968) to the dysfunctions of open access as “the tragedy of the commons.” What he really meant was the tragedy of open access, the degradation that ensues because of the inability of any user of a resource or group of users to enforce their management decisions against any other users, thus obstructing conservation of the resource.
The various mixtures of property rights that have been imposed on open access resources to avert tragedy cover a wide spectrum. Cole concerns himself in chapter 2 with the public property/regulatory mix that represents outright public ownership of resources and command and control regulation. In chapters 3 and 4, Cole turns to mixed private and public property/regulatory approaches and to an assessment of the utility and limits of transferable pollution rights and conservation easements.
Chapter 5 takes up the prescriptions of self-styled free market environmentalists, who advocate a private property/nonregulatory mix. Chapter 6 will resonate especially with political scientists, because this is where Cole deals with the common property/regulatory mix dealt with so extensively in the writings of Elinor Ostrom and others (see, for example, Ostrom 1990).
In the rest of the book, Cole wrestles, in chapter 7, with the complexities that arise when people try to choose mixes of property systems that might be effective in managing resources and protecting the environment. As I noted earlier, this is where Cole tells his captivating story about Stonehenge. Chapter 8 addresses the Supreme Court’s takings jurisprudence, which Cole demonstrates should – but does not adequately – consider the public property rights at stake in takings cases. Cole then ends the book with five paragraphs of final thoughts in chapter 9, which may win some sort of award as the shortest final chapter on record.
Finally, let me comment on the relevance this book will surely have for the many, many people in and out of the academic and research communities, both in the United States and around the world, who would like a better understanding of how different sorts of institutional arrangements for resource management and environmental protection square with sustainable development objectives. There is good news and bad news.
The bad news is that when it comes to institutional design and the comparative assessment of alternative institutional arrangements for achieving successful resource management and environmental protection in countries in the developing world we have often proceeded on erroneous assumptions. Particularly troublesome is the glib (some might say neo-colonial) assumption that American and European ideas about institutions can be readily exported. Cole notes briefly in passing, for example, the sad story of “privatizing” the management of pasture lands in Botswana, beginning in the mid-1970s, concluding with Stephen Toulmin that older traditions of pasture land management in use before the introduction of European methods have been more productive than imported practices (p.97).
Although he is not opposed to it in principle, Cole also has few good things to say about the use of an emissions trading system, much vaunted in the United States, in the Kyoto Protocol to reduce greenhouse gas emissions, especially in developing countries. “Negotiators simply presumed,” he writes, “that a trading system would provide a lower cost mechanism than traditional command-and-control for meeting the Protocol’s goal...[But] many countries – and not just the ‘less developed’ ones – lack the institutional and technological capabilities to regularly and precisely monitor quotas and actual emissions, which is necessary ‘to preserve the orderly functioning’ of the trading system” (p.84).
The good news, such as it is, comes in chapter 6, where Cole assesses the limited value of common property regimes for resource management and environmental protection. The last decade has seen a burgeoning of interest in these regimes, signaled for political scientists by the appearance of GOVERNING THE COMMONS (Ostrom 1999).
For many scholars, I think, common property arrangements seem attractive as a sort of middle way forward in dealing with resource problems in the developing world. They are a step up in complexity and ambition from pre-European and pre-colonial resource management systems. At the same time, they have an indigenous or home grown quality to them that is lacking in institutions imposed from the outside by the terms of international treaties. A great many developing countries have, of course, signed such treaties since the Stockholm Conference in 1972 (see, generally, Hunter, Salzman, and Zaelke 2002).
The suspicion lingers, however, that these treaty commitments are best understood as a not always very well considered response by developing countries to the substantial political pressure that environmental NGOs and the international environmental movement more generally have been able to exert in a variety of international fora. One way to make up for the resulting distinct and well-recognized lack of capacity for resource management and environmental protection is to transfer developed country methods and expertise to the developing world. But this would be much less necessary and appropriate if institutional change sought to build upon existing common property regimes, and appropriately recognized both their legitimacy and utility.
The good news is not, however, very good. On the one hand, it is true as Cole makes clear that common property institutions often reflect and incorporate the best elements of traditional resource management institutions. It is also true that some of them have long histories of “successful” outcomes, meaning that they have proven robust and durable for some set of resource users in achieving sustainable development, which Cole nicely defines as “the avoidance of resource depletion and degradation through overconsumption over a long period of time” (pp.111-112).
On the other hand, the success stories are matched by failures. Indeed, Cole writes, stories about failed common property regimes are about as frequent as success stories, and “even in cases where common property management appears to succeed, they tend to be replaced in the course of time by private property regimes” (p.121). We do not yet have, in other words, a theory of common property regimes that can predict or explain successes and failures. After a generous treatment of Ostrom’s theory of common property systems, Cole sees no reason to modify this judgment (pp.121-128).
Finally, regarding common property regimes, Cole observes that, even if we understood enough to make them all work better, they are really not very attractive devices for solving many of the problems we want to solve, including those that are arguably the most important. In one of the more important passages in the book, Cole makes his point thusly:
In reviewing the literature on common property regimes, one is struck by the unwavering focus on resource use and output. The ultimate determinant of “success” or “failure” is the sustainability of production over time of commodities – goods to be consumed at home or sold at market. Studies of common property regimes pay little, if any, attention to noncommodity natural resource amenities. If there are examples of common property regimes, as conventionally defined, that have been designed to preserve noncommodity, environmental resources, they simply do not appear in the literature.
There is no reason to presume that a common property regime instituted to govern a fishery, for example, will preserve related, noncommodity amenities. While fish stocks are maintained, other marine resources may be degraded or even intentionally destroyed because they have no commodity or exchange value to the users. ...The criterion of success is the long-term sustainable harvest of the commodity resource for the users, not the general preservation of environmental amenities. Thus, a common property regime may avert one tragedy of open access while ignoring, or exacerbating, another (pp.128-129, emphases in the original).
At the very least, Cole has captured in a nutshell, here, the reason why common property systems have attracted relatively little interest among active participants in resource management and environmental policy processes in the developing world and in international arenas. Quite apart from the fact that they are as likely to fail as to succeed, the problems they can solve, while far from trivial to the users of resources, are not the ones that need the most sustained attention going forward. They are a sideshow in a new and much larger drama for which, in this book, Cole has just begun to write the script.
REFERENCES:
Coase, Ronald H. 1960. The Problem of Social Cost. 3 JOURNAL OF LAW AND ECONOMICS 1-44.
Dales, J.H. 1968. POLLUTION, PROPERTY, AND PRICES: AN ESSAY IN POLICY MAKING AND ECONOMICS. Toronto: University of Toronto Press.
Hardin, Garrett. 1968. The Tragedy of the Commons. 162 SCIENCE 1243-8.
Hunter, David, James Salzman, and Durwood Zaelke. 2002. INTERNATIONAL ENVIRONMENTAL LAW AND POLICY. 2nd Edition. New York: Foundation Press.
Ostrom, Elinor. 1990. GOVERNING THE COMMONS: THE EVOLUTION OF INSTITUTIONS FOR COLLECTIVE ACTION. New York: Cambridge University Press.
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Copyright 2003 by the author, Geoffrey Wandesforde-Smith.