The Property and Environment Research Center

Free Markets and a Clean Environment: Can We Have Both?

Can the free market solve environmental problems in the United States?

Ask the average American on the street, and their answer would be no: Government regulation is needed to ensure that natural resources are preserved. They might even add that a free market and a healthy environment can’t co-exist.



But what if freedom, not government, really were the best path to environmental protection? The nonprofit Property and Environment Research Center, known as PERC and based out of Bozeman, Montana, has been making that case for over three decades. In so doing, they’ve shifted the way we talk about markets and the environment in America.

PERC’s mission is simple: Show that private property rights, far from being antithetical to the environment, actually are the best way to preserve nature and natural resources for future generations. The nonprofit primarily deals with water use, ocean fisheries, wildlife, and land conservation.

Terry Anderson, President of PERC and a Senior Fellow with Stanford University’s Hoover Institution, is quick to acknowledge the counter-intuitive premise of his organization’s mission. But according to Anderson, the intersection of free markets and the environment is one area where you truly can have your cake — and eat it, too.

“Most Americans operate under the assumption that if we have economic growth, we destroy the environment, and if we preserve the environment, we destroy economic growth,” Anderson said. “We at PERC don’t see that conflict. We see the issue not as liberty or environment. Rather, we see it as liberty and environment.”


Changing the conversation

Created in 1980, PERC was founded by economists and political scientists trained in the Chicago school of economics, an approach that emphasizes free markets and discourages government intervention. Their goal: study how government regulation often leads to environmental degradation, and how private property ultimately is the solution to pressing environmental concerns.

“We asked ourselves one question: If markets can produce bread and cars and make them available for everyone, why can’t they produce environmental protection?” Anderson said.

Research and policy analysis remain cornerstones of PERC’s purpose. Scholars conduct research into a variety of environmental issues and apply them to real-world problems. Current topics of research include wildlife habitat management, fisheries sustainability, and public lands management.

PERC distributes its research through a magazine, policy reports, a blog, e-newsletter, and case studies.

Terry Anderson.

In 1991, Anderson and co-author Donald Leal published a landmark book titled Free Market Environmentalism. The volume quickly became the “Bible” on free markets and the environment. A third edition will be published in late 2014.

PERC’s success has contributed to changing the dialog on environmental issues. The idea of free-market environmentalism has even caught the attention of some progressive environmentalists.

“These ideas have gotten more and more popular over time,” said Rick Stroup, a founding member of PERC who now serves as an adjunct professor of economics at N.C. State University. “Even some liberals are fascinated by the question of how property rights can actually help to preserve the environment.”

One of PERC’s key arguments is that the trappings of a capitalistic system actually augment the environment. “Property rights give individuals the incentive to be better stewards of the environment — to take better care of land, water, and air,” Anderson said.

He added that a strong correlation exists between treatment of the environment and standards of living in countries.

“Freedom yields environmental quality,” he said. “Just take a look at the environment in command and control economies like the Soviet Union, where the environment was horrible.”


Wild, wild west?

Anderson came to free-market environmentalism through a unique route — through tales of the Old West of the mid to late 1800s. Working in conjunction with PERC senior fellow P.J. Hill, Anderson’s interest was piqued by questions of how frontiersmen and their families settled disputes over land, cattle, and water.

“Most people have an image of the West as a ‘shoot-em-up’ cowboy environment, when in fact the West was a very peaceful place where people developed property rights to land, usually outside of government, because there was no government on the frontier,” he said.


Empowering ‘enviropreneurs’

PERC coined the term “enviropreneur” to describe environmental entrepreneurs who develop innovative solutions to environmental conflicts, turn waste streams into revenue streams, and otherwise link economic growth and environmental quality.

The organization also has an Enviropreneur Institute that empowers environmental entrepreneurs to enhance environment assets through the application of property, contracts, and markets.

Reed Watson, the Institute’s director, describes the two-week program as an intense professional development opportunity for environmental professionals and entrepreneurs.

“Our program is unique in that it combines a world-class faculty of conservation and business leaders, a productive and engaged network of over 200 alumni, and the inspiring backdrop of southwest Montana,” he said.

The 2014 Enviropreneur Institute runs from July 7 through 18 in Bozeman, Montana. To apply, click here.

As part of its training program, PERC also offers fellowships that bring in scholars, thinkers, and opinion shapers from around the world to learn more about free market environmentalism.

“We are a beehive of activity in the summer,” Anderson said. “It’s day after day of research seminars where we toss around these types of ideas.”



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