Private Property and Environment Essay ⋆ Environment Essay Examples ⋆ EssayEmpire

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Property rights determine who is entitled to use and dispose of resources, both natural and man-made. Private property is a form of property ownership in which an individual, company, or corporation enjoys the associated rights. It thus differs from common property (where a group of people enjoys those rights jointly), state property (where the sovereign ruler or nation is the presumed owner, with the state managing the property), and open access (in which case no property rights have been established).

The nature of private property varies depending on which rights have been conferred upon resource owners by social institutions such as the state or commonly recognized customs. The “bundle of rights” included consists of varying combinations of the rights to use, sell, rent, lease, destroy, give away, and pass on the property as an inheritance, and to exclude others from its enjoyment. These rights may or may not involve reciprocal obligations or duties on the part of the property owner (for example, ownership of water may be contingent on its “beneficial use”).

The de jure property rights may not always be recognized by others, and thus there is usually a cost associated with the defense of property rights. These costs are especially high if the difficulties of excluding others from the enjoyment of that property are great or if there is little social acceptance of this particular kind of property. For example, intellectual property rights in seed varieties and their propagation can be difficult to defend while enjoying little popular acceptance; the development of hybrid varieties that do not breed true and of “terminator” genes that prevent the reproduction of seeds are attempts to make private property rights more easily defendable.

Some resources, such as air to breathe, are generally regarded as nonexcludable: others could not possibly be prevented from using them. Other resources may be nonexcludable for social or technological rather than physical reasons; for example, where communal grazing rights are the norm, an individual’s claim to private property rights to grazing land would not be respected. A resource may also be nonexcludable for reasons of cost, for example, if the costs of fencing land exceed its benefits to the property holder. Hence, private property rights can only emerge where excludability is possible in practice as well as theory.

Perceived Benefits

The question of whether private property is desirable is a different matter. From a mainstream economic point of view, private property should be established whenever possible, in order to maximize economic efficiency. The basic argument is that most production involves an investment by the producer to obtain resources and manage them so that they will remain productive in future. If the owner of a resource does not capture all the benefits of that investment, he or she is likely to invest less than is optimal for sustained, maximum production. Hence, for example, a farmer should own his or her land in order to ensure that he or she will invest in protecting soil fertility, building irrigation infrastructure, buying machinery, and so on for the long term. Only long-term security of tenure is thought to encourage this kind of ecologically as well as economically sustainable farming.

On the basis of similar arguments, private property rights have been introduced as a way of minimizing the costs of achieving air pollution standards. In this case, a government authority decides the overall amount of pollution that will be allowed within an area, and then provides tradable pollution permits to polluting industries located there. Tradability of the permits ensures that companies that can cheaply reduce their emissions will sell their permits in order to cut costs; while those companies that cannot easily reduce their emissions will buy permits. This ensures that environmental targets are achieved at minimum cost.

It must be remembered, however, that the government still has to set overall pollution limits and enforce compliance. Thus, although pollution permits are treated as a kind of private property, the protection of air quality remains a function of the state, that is, a form of state property.

Drawbacks

The promised benefits of private property rights are not always assured, however. For example, private property in land allows the owner to rent out that land. If tenants are forced to pay excessive rents and can be evicted arbitrarily, they are left without the resources or the incentives to make long-term investments. Meanwhile, the landowners may be more interested in extracting high rent payments from the tenants than in the long-term development potential of the land. In such cases, there will be very little investment in long-term productivity of the land. This problem may be remedied at least partially by land reform that assigns “land to the tiller,” and that also provides farmers with the resources they need in order to successfully make a living on the land (as has been done, for example, in South Korea, Taiwan, and the Indian state of Kerala).

Even if tenancy relations create no perverse incentives, land uses that are profitable within the lifetime of an owner may be unsustainable over longer time periods. For example, the intensive use of agrochemicals on highly nutrient-demanding cash crops for export may promise to be profitable in the owner’s lifetime but lead to longer-term land degradation as well as off-site ecological impacts (called externalities by economists). The exploitation of minerals may cause extensive ecological impacts both on and off site but still be profitable to the owner. Logging of timber may be highly remunerative to a landowner, but replanting the forest in order to reestablish trees that take many decades to reach maturity will not pay off within the present owner’s lifetime. The option to sell the land may exacerbate a short-term orientation. For example, logging companies in Southeast Asia, where tropical rain forests are being cut down at a very rapid rate, often sell deforested land to companies interested in establishing oil palm plantations. Although oil palm plantations may be sustainable in the sense of being able to persist a long time, such land use change does lead to the loss of natural forest cover and associated biodiversity. Some of these issues can at least theoretically be addressed by creating property rights in the resources affected by externalities, for example, by establishing property rights in clean water. However, ecological impacts that are expected to occur only in the future cannot be mitigated in this way; instead, government regulations may be necessary.

Many critics of private property rights also point out problems of inequity. Following Pierre-Joseph Proudhon’s tenet that “all property is theft,” they have pointed out the injustices in the original creation of private property, integral to the process that Karl Marx called “primitive accumulation.” Examples include the expropriation of colonized peoples around the world, enclosures of common property in England and elsewhere, and the privatization of state assets in post-Soviet Russia and eastern Europe. Injustices may persist for an indefinite period of time after the original property rights have been established. For example, the Portuguese colonial practice of assigning huge landholdings to a few individuals in order to lay claim to large territories in Brazil laid the foundations for the present situation in which impoverished people suffer from land scarcity even while population density is low and many landowners do not utilize all of their land. Brazil’s Landless Workers Movement (MST) denies the legitimacy of private property that is unused while others have no land at all and occupies unused land in order to force the government to carry out constitutional provisions that call for the redistribution of such land. Extreme inequity in land ownership as found in Brazil may lead to serious ecological impacts in which wealthy landowners use resources wastefully, while marginalized people are forced to eke out a living on unproductive land in unsustainable ways or to migrate into urban shantytowns that lack basic sewage, water supply, and garbage collection facilities.

Environmental protection may also require that some resources be removed from the market altogether, or be made into state property of some kind. For example, the preservation of extensive ecosystems may require the creation of a national park owned by the state. If that land was owned by many separate private landholders, a few might wish to preserve natural habitat, but these areas would usually be small and fragmentary and therefore insufficient for species preservation. In some cases, it may be possible for the state or a private foundation (e.g., a land conservancy) to buy easements, whereby private landowners forfeit some of their land-use rights (for example, to drain wetlands). If such rights are taken away by legislative action (“takings”), many private property advocates resist because they see this as an abridgement of their property rights (e.g., the Wise Use Movement in the United States). Without the abridgement of private property in some form, however, it is unlikely that many areas of high biodiversity and landscape value will be preserved.

Intellectual Property

Intellectual property rights, and especially patents, are a particularly controversial form of private property. Patents violate free-market doctrine in that they provide temporary monopolies in the supply of goods involving innovative technologies. These monopolies can be made quasi-permanent by continual minor innovations that serve primarily to extend the period of patent protection rather than to improve the marketed commodity.

The rationale for providing temporary monopolies (not a necessary feature of private property) is to provide an incentive for companies to engage in costly research. However, patents are based on the assumption that an individual or company is solely responsible for the innovation. In fact, often many people were involved in order to create an innovative product, though it can be very difficult to identify each person’s contribution. For example, when drug companies utilize the knowledge of indigenous people about medicinal herbs, the common knowledge of a large group of people going back many generations is appropriated, usually with very little compensation. These people may even be prevented from marketing products that they have produced for many years (e.g., the company W.R. Grace attempted to prevent Indian manufacturers of products from the neem tree from selling their products on the Indian market).

Some activists demand methods of repaying communities (and not just individuals) in such cases; more radical proposals call for the reversal of laws passed in the 1980s that first allowed the patenting of life forms. Environmental concerns associated with patenting of genetically engineered organisms relate to the potential dangers of introducing completely new organisms into ecosystems with unpredictable effects, and encouraging more pesticide-intensive forms of agriculture (e.g., via crops resistant to pesticides).

Ultimately, no single form of property can successfully address all possible social, economic, and environmental conditions. Which form of property is favored in any particular instance also depends on how much value people place on total production or efficiency, on social equity, and on environmental protection. All existing societies exhibit a diversity of property regimes; the challenge is to devise effective solutions that satisfy diverse interest groups and provide for ecological sustainability as well.

Bibliography:

Terry Anderson and Fred S. McChesney, Property Rights: Cooperation, Conflict, and Law (Princeton University Press, 2003);
Peter Dauvergne, Loggers and Degradation in the Asia-Pacific: Corporations and Environmental Management (Cambridge University Press, 2001);
Ramachandra Guha and Juan Martinez-Alier, Varieties of Environmentalism: Essays North and South (Earthscan, 1997);
Jack R. Kloppenburg and Michael J. Balick, “Property Rights and Genetic Resources: A Framework for Analysis,” in Michael Balick, Elaine Elisabetsky, and Sarah A. Laird, eds., Medicinal Resources of the Tropical Forest: Biodiversity and Its Importance to Human Health (Columbia University Press, 1996);
Bruce Larson, ed., Property Rights and Environmental Problems (Ashgate, 2003);
Roy Prosterman, Mary Temple, and Timothy Hanstad, Agrarian Reform and Grassroots Development: Ten Case Studies (Lynne Rienner Publishers, 1990);
Jeremy Rifkin, The Biotech Century: Harnessing the Gene and Remaking the World (Penguin Putnam, 1998);
Vandana Shiva and Radha Holla-Bhar, “Piracy by Patent: The Case of the Neem Tree,” in Jerry Mander and Edward Goldsmith, eds., The Case against the Global Economy: And for a Turn toward the Local (Sierra Club Books, 1996);
Angus Wright and Wendy Wolford, To Inherit the Earth: The Landless Movement and the Struggle for a New Brazil (Food First Books, 2003).