Strengthening property rights as a means to protect the environment

Instead of heavy-handed regulations and restrictions on human mobility, climate change calls for stronger individual property rights. The right to own and use land and its natural resources serves as an impetus for sustainable natural resource use. The most apt conservation efforts occur when resources are salvaged from over-exhaustion through the establishment of property rights.


American ecologist Garrett Hardin identified private property as a solution to the tragedy of the over-exhaustion of common resources. The solution to environmental policy is to improve resource management through legal and economic incentives. Peruvian economist Hernando De Soto champions property rights as an antipoverty and environmental conservation measure. In a New York Times article, De Soto claims the poor,  on a global scale, have accumulated assets worth $9 trillion, but because these assets are not documented in legal structures common to the West, “they can’t function productively as capital.” Meaning, individuals can’t use their land to expand their business, or as collateral for loans. Efficient private property rights are the solution to environmental pollution and resource depletion. Environmental and natural resource problems correlated with overuse stem from vaguely defined and enforced property rights, like overfishing, erratic air and water pollution, moreover meager private investment in natural amenities and biodiversity. The benefit of strong property rights puts in place greater incentives for conservation, ecological protection, restoration, and investments. Whereas political conservation often generates poor results due to inefficient policies that are a one fit all solution often retarding economic growth.

Mindful resource use and effective property rights

Self-tailored property-based management regulations have successfully ruled out overfishing and depletion. It is a fact, sparse, but freely available resources will not be sustainably used, however, assigning property rights to resources may help reduce its overuse and increase investment. A case in point is the 1989 Water Act, which privatized water in England and Wales under Margaret Thatcher. Michael Roberts, Water Uk Chief Executive, noted that since its privatization, the water industry in England has transformed – “After decades of government underinvestment, water quality was poor, rivers were polluted, and our beaches badly affected by sewage.  “Leakage is down a third since the mid-1990s, two-thirds of beaches are classed as excellent, compared with less than a third 25 years ago, and wildlife has returned to rivers biologically dead since the industrial revolution,” he further claimed. Currently, the UK is globally ranked number seventeen on the international property rights index.

The role of property rights in nature conservation

Nature conservation is costly, and resource-strapped communities eventually have trouble footing the bill. Securing property rights can play a significant role in financing conservation in resource-rich areas where citizens lack the financial means to advance this goal.  De Soto’s research found that much of the land surface rights across the developing countries is owned by the poor; however, in most developing markets, “the concessions for the land under the surface have been granted to large companies. Mining and oil companies have the prerogative to extract below the surface, while the poor have only ownership of surface resources. The dilemma is deep, mining companies cannot cut into the subsoil without access from the surface, and the poor lack the infrastructure and financial means to extract the natural resources in the subsoil – De Soto deems this as a catch-22. Landowners have witnessed over the span of many years that the mining companies have purchased swathes of land at local market prices, which in return, yields voluminous profit from mining. Recently, the tables have turned, and landowners have come to see they have the upper hand, going as far as preventing the global extraction of around $150 trillion in mining and oil reserves. Landowners want better conditions and extracting companies a better bargain. This havoc could be avoided by well-cut-out property rights as regards land and subsurface ownership

De Soto would end the stalemate over the conflict by building equitable fiscal relations between the global capital markets with the know-how and the informal-sector miners who have access to the minerals underground. As a result, the Indigenous will have their property rights listed on exchanges that can either make them partners in mining projects or give them market-value compensation

This article originally appeared in the Brussels Report

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