Russel Sadler, writing on BlueOregon, describes a “takings” lawsuit:
In the Spring of 1998, a logging company named Coast Range Conifers acquired 40 acres of timber known as the Beaver Tract. Subsequently, a U.S. Fish and Wildlife Service employee observed two bald eagles in the area and a nest on a 31-acre site the company wanted to log. The bald eagle is listed as a “threatened species” under the Endangered Species Act. Coast Range Conifers offered a logging plan that prohibited logging within 400 feet of the nest, leaving 50 percent of the neighboring trees, and received a logging permit from the Oregon Department of Forestry. The company logged the 31 acres.
Following the bald eagle nesting season, the company observed the nest was no longer occupied and offered a revised logging plan for the remaining nine acres of the Beaver Tract with larger buffer strips around the nest. The State Forester denied the permit. Coast Range Conifers filed suit complaining the government had taken their property by regulation and demanding compensation.
Assuming that market forces are still functioning, I don’t see what CRC has to complain about.
After all, it’s not exactly a secret that logging in Oregon can be limited by the discovery of endangered species – the spotted owl lives here, for example. Presumably, the additional risk that land-buyers face in Oregon is automatically factored into land prices by the marketplace, and resulted in CRC buying Beaver Tract for a cheaper price than they would have paid if there were no Endangered Species Act.
They bought Beaver Tract knowing full well that there was a risk – and the existence of that risk means that they paid less for the land than they would have if there was no risk. Since the marketplace already gave them a discount to compensate for their risk, how on Earth has the government “taken” the value of the land away from them?
(By the way, CRC lost their lawsuit – on legal grounds, not on the economic grounds I’m discussing here.)
There is also the logging company still owns the land, and the birds at some time may leave the area and allow for them to reapply for a permit for logging the area with the vacant nests. The asset is still intact; it is money in the bank. (It may also hasten the re-timbering of the cut tract.) Blessings.
Very astute, Amp, and a point that isn’t often made. It often turns out that so-called “free marketers” depart from principle when it would produce a windfall for a corporation. As you say, the potential for reduced usage is priced into the cost of the land.
The other great blind spot among conservatives of the “free market” stripe tends to be for externalities. Ask your local conservatarian whether businesses ought to be required to pick up the marginal healthcare costs of injuries to their workers.
If they’re not factoring these costs in at the outset, then they’re not being very “personally responsible,” are they?
The thing that really bothers me about the Endangered Species Act and many other environmental laws is that they provide incentives for unscrupulous landowners to destroy protected animals and environments. If I own a piece of land, and I find a spotted owl living on it, the most lucrative thing I can do is kill the owl immediately and dispose of the body in secret. Environmental lawyers have actually commented that people who discover wetlands on their property would increase the property value drastically by pouring cement into unsurveyed portions of the property to prevent them from being classified as wetlands. It strikes me that a far better strategy to protect the environment would be to take some of the millions of dollars a year that we spend enforcing laws that prevent the development of environmentally valuable private property, and instead spend it compensating property owners for lost value or even paying them to convert it to parks or nature preserves. That removes the financial incentive to break the law and gives people an incentive to seek out endangered species and protect them. No plan is perfect, obviously, but it seems like a step in the right direction to me.
If I understand your argument, amp, it’s that government needs to write a check for a taking at the time it passes a regulation that takes part of the value of property, instead of waiting till the property is sold or until the regulation is enforced. Is that the result you are looking for? Biopreservation is a tough call, I’m not aware of any easy answer.
It’s useful to keep in mind that the most polluted places on the planet are US military bases, and the second set is within countries with central planning/state-run industry, so
“government-good – private sector – bad” isn’t an adequate framework.
Amy’s approach is precisely the correct one to get good outcomes for wildlife. Pay a bounty for every cougar you have on your property during the annual survey, and the ranchers will be lining up to collect those sweet, sweet government checks…instead of popping the fuckers and burying them in the desert.
But that doesn’t give any bureaucrats any power, and doesn’t give any lobbyists any traction with their tree-loving donors, so good luck getting it to happen.
No, that’s not what I’m advocating. I’m actually not advocating any particular policy; I’m just pointing out that CRC’s claims don’t make sense, economically.
The policy you describe is certainly more logical than the policy suggested by CRC’s argument. It seems to me that in a free market, the ONLY property owners who can legitimately claim to have suffered a loss because of a well-known regulation are those who owned the property at the time that the regulation was passed. Logically, no one who purchased the property after the regulation is passed has even the ghost of a claim.
Amy, you seem to assume that the cost of purchasing land, or (as Robert suggested) paying bounties, would be so much less than the cost of enforcement that we could pay for your suggested policy with just a fraction of enforcement costs.
Maybe that’s the case, but it seems unlikely on the face of it. I think someone would have to do serious number-crunching to determine what your suggested policy would cost.
Personally, I’d be more than happy to support the kinds of policy you and Robert are suggesting here – and I’d also be willing to support the taxes that would, I suspect, be necessary to pay for that policy. However, would you really be willing to pay higher taxes, if it turns out that your solution costs more than the status quo? How about you, Robert?
Sure. Higher taxes but an actual permanent reduction in state power is a tradeoff I’d make any day.
I like your point, Amp. but I will suggest two quibbles: 1) Your argument presuppoes that the takings claim will lose in court. If the market thought that the loggers would prevail in court, then the purchase price would not have reflected a discount. As an example, the county where I live conceivably might take my condo via eminent domain at any time, but the market presumably did not discount my purchase price for that possibility, because it assumed that I would obtain compensation for that action. 2) There might indeed be a market failure here. The appearance of an endangered species may be sufficiently rare and random that it is hard to value (for a vague analogy, think of the Act of God exclusion in some insurance policies).