Transcript What is the nature of specific land use problems

8.
THE POLITICAL ECONOMY OF
NATURAL RESOURCE
MANAGEMENT
(SPRING 2002)
Larry D. Sanders
Dept. of Ag Economics
Oklahoma State University
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INTRODUCTION
 Purpose:
– to become aware of the political economy of natural
resource management
 Learning
Objectives. To understand/become aware
of:
1. the concept of political economy.
2. the political economy of agriculture and the
environment.
3. the political economy of forest/public land policy.
4. the political economy of habitat/biodiversity policy.
5. the nature of US incentive enforcement systems.
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The Political Economy of Environmental
& Natural Resource Issues
 Theories/concepts
that
treat systems as
integrated
relationships of
economic, political &
social institutions
 Institutional
mechanisms to affect
the environment &
natural resources
have evolved over time
Political
Institutions
Economic
Institutions
Social
Institutions
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Political Economy--Basics
 Market
failure historically leads to the “protective
response”:
– Government intervention
– Private sector seeking advantage or market power
 Government
failure may lead to reversion to the market
or refinement of government institutional mechanisms
 Private failure often leads to market concentration
 Models/theories:
– Public Choice--politicians maintain position
– Rent-seeking--interest groups seek govt support
– Capture theory of regulation--firms control process
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The Political Economy of Agriculture
& the Environment
 Environmental
Policy
– Point vs. Nonpoint
– Property Rights
– Incentives vs. Regulations
 Government
–
–
–
–
–
Support a Reality
But evolving as a “Social Contract”
Depression-Era Support Gone
Idealized Farm Image Persists
Budget Deficit Reduction top goal for 1990s
W/budget surplus, crisis funding for ag returned to near-record
highs
– Environmental Concerns Persist
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The Social Contract with Agriculture &
the Environment--Focus on Farm Bills
1. 1985 Farm Act
--Conservation Reserve Program (CRP)
--Conservation Compliance (CC)
--Sodbuster
--Swampbuster
2. 1990 Farm Act
--Continue CRP
--Wetlands Reserve (1 mil. ac.) (WRP)
--Water Quality Incentives Program (WQIP)
--Pesticide users’ regulations
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Social Contract (cont.)
3. Pesticide Regulation
--Federal Insecticide, Fungicide & Rodenticide Act
(FIFRA)
--Endangered Species Act (ESA)
--Federal Environmental Pesticide Control Act
(FEPCA)
--Food Quality Protection Act (FQPA)
4. 1996 Farm Act (expires 2002)
--new CRP, WRP
--Environmental Quality Incentive Program (EQIP)
--Conservation Farm Option (CFO)
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1996 Federal Agriculture Improvement & Reform
Act: Conservation Reserve Program (CRP)
 CRP maintained at 36.4 mil. ac.
– New enrollments permitted with rental rates at fair
market value
– Early Out permitted w/restrictions
1.Payment rates:
--Avg local cash rental rate by soil type
--Oklahoma rates by county vary:
--Panhandle: $13-$36
--Eastern OK: $17-$58
--Western OK: $15-$48
2. State designated 10% of cropland as
“conservation priority area”
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1996 FAIR--REVISED CRP RULES:
3.Eligibility:
--EI > 8 or conservation compliance HEL definition
--Planted/Considered Planted 2 of 5 past crop years
--Owner, operator, tenant of eligible land for 1 year
4.Selection Process:
a. Applicant meets w/NRCS to determine max rental rate
b. Applicant estimates a bid < max rate
c. Agency evaluates/selects highest environmental
benefits to bid levels
d. Per person total CRP payments limited to $50,000
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REVISED CRP RULES FOR 1997+
(continued):
 Note
on “ENVIRONMENTAL BENEFITS”
– An index developed that considers:
» Soil erosion
» Water quality
» Wildlife habitat (temp. or permanent)
» Bid level
» Conservation priority area
» Conservation compliance requirements
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REVISED CRP RULES FOR 1997+:
 Continuous
Signup 10-15 yr. contracts (same
eligibility; not subject to environmental index;
county limit waived)
–
–
–
–
–
–
Filter strips/grass waterways
Riparian buffers/salt tolerant vegetation
Shelter belts/shallow water areas for wildlife
Living snow fences
Acreage w/in designated wellhead area
Field windbreaks
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CRP UPDATE (Feb 2000)
 CRP Rental
Rates ranged from $37-$43/ac. for OK
during 1986-1995
 CRP Rental Rates ranged from $28-$34/ac for Ok during
1996-2000
 OK: current land in CRP--994,559 ac; $32.43/ac
 OK (OSU-NRCS) study suggests CRP more profitable
than returning to production for CRP land terminating
existing contracts:
– Participate in new CRP: $25 net income
– Return to wheat/sorghum: ($16)-($32) net loss
– Keep in grass for grazing: $17-$24 net income
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Environmental Quality Incentive Program
(EQIP)
 Cost
share, incentive payments & technical
assistance; 5-10 yr. plan
 Moderate/small livestock producers ($100 mil.)
 Combines several recent ag land environmental
programs ($100 mil.)
 Replaces most NRCS assistance w/competitive bid
process
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Conservation Farm Option (CFO)
 Pilot
Program for producers w/govt support
contracts (Production Flex Contract-PFC)
 Develop & implement 10-15 yr. plan
 In exchange for CFO payments, producers forego
participation in/payments under CRP, WRP, EQIP
 Payment equivalent to foregone payment plus
PFC payment
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Other Key Environmental Provisions
 Conservation
Compliance
– Continued
– Self-Certification
 Wetlands
Conservation Program
– Improvements in Mitigation Allowance
– Pilot Wetlands “Bank”/No-net Loss
 Farmland
Protection--170-340,000 ac.
 Wildlife Habitat Incentive Program
– Cost-share; 10 yr.+ agreements
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Wetlands Reserve Program (WRP)
 WRP capped
at 975,000 ac.; new enrollments:
– 1/3 Permanent Easements
– 1/3 30-year/less Easements
– 1/3 Wetland Restoration w/cost-share
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Farmland Protection--State/Local

FREE MARKET VS. REGULATION
– Zoning Laws
– Development Rights Market
– Right-to-Farm Laws
– Preferential Assessment
– Ag Districts
 Subsidies
– 1996 FAIR Act ($17.2 mil. for easements in 98)
– State initiatives
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Crop Residue Management (CRM)
 Government
Intervention
– Conservation Compliance & Highly erodible land
(1985 Farm Act)
– Supported Compliance, other environmental programs
(1990 Farm Act)
– CRM action plan (1991)
– Conservation Farm Option, other programs (1996
Farm Act)
– Ongoing educational & technical assistance by NRCS,
FSA, & landgrant programs (extension & research)
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Grazing--Common Property Issues
 A major
use of public lands (BLM, FS, NPS)
– Predates government management
– Ecosystem stress forced govt. intervention
» Taylor Grazing Act (1934)--management system for
non-FS public lands by BLM; right-to-use based on:
prior use
commensurability (sufficient alt. lands offseason)
dependency (insufficient alt. lands in-season)
grazing fee (permits, #head, area, other
restrictions)
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Forest/Public Land Policy
 Pinchot
vs. Preservation vs. Development
 1891-Forest Reserve Act (public forest reserves
from public land; Western US)
 1897-Forest “Organic” Act (establishes national
forest system for water flow & timber
sustainability)
 1905-USFS established
 1911-Weeks Act (okays purchase of private land for
national forests; Eastern US)
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Forest/Public Land Policy (cont.)
 1916-National
Park Organic Act (creates NPS &
system to conserve scenery, wildlife, historic
objects)
 1960-Multiple Use & Sustainable Yield Act
(MUSYA) (adds watersheds, recreation, wildlife,
fishing, hunting, soil concerns to national forests)
 1964-Wilderness Act (begins preservation of
unique natural areas)
 1968-Wild & Scenic Rivers Act (preservation of
unique rivers)
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Forest/Public Land Policy (cont.)
 1974-Forest
& Rangeland Renewable Resources
Planning Act (RPA) (creates planning process)
 1976-National Forest Management Act (adds
economic, wildlife, wilderness & recreational uses
to USFS planning)
 1980-Alaska National Interest Lands Conservation
Act (ANILCA)(adds 13 national parks, 16 wildlife
refuges, 56 mil. Ac. To wilderness system)
 1970s-1980s-added to wilderness system thru US
 1990s-move to privatize some national forest areas22
Habitat/Biodiversity Policy
 Endangered
Species Act (ESA)
under review
 Criticisms:
– Species over Humans
– Ignores Economics
– “Taking” of Property Rights
 Response
– Species Critical to Ecosystem
– Economics may favor Species
– Property Rights Evolve
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ESA (1973)--Background
 Expired
1992, but most statutes in effect until
repealed
 Primary Goal: Conservation of endangered,
threatened species & their ecosystems
 Key Elements:
– Listing;
– Protections, Prohibited Activities & Enforcement;
– Relief/exemption from sanctions
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ESA--Process
1. Listing:
– Species based solely on biological considerations
– Requirement of designation of “critical habitat” must
consider economic impacts; potential sites may be
excluded if opportunity costs too hi
2. Regulatory Constraints
– Protects listed species against “taking” (harming or
degrading habitat); private land not protected
– Prohibits federal actions that jeopardize species or
adversely modify habitat
– Can’t consider economics
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ESA--Process (cont.)
3. Regulatory Relief
--Allows granting of permits to take listed species
--Incidental/conditional to approved conservation plan
--Economics may be considered
--Exemption possible
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ESA--Property Rights
 Some
claims that ESA is unconstitutional
“taking” private property rights w/o compensation
(violates Fifth Amendment of Constitution)
 Property rights always evolving, subject to
limitations, & not inalienable nor absolute
 Current ESA reform bills may ignore historic
precedence, but do contribute to debate on
redefinition of rights by society
 ESA was amendment of property rights; standard
practice to not compensate when prohibiting a
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“bad”; courts very cautious
ESA--Administration Proposals (95-96)
 Early
identification of allowable activities by
FWS & NMFS (exempt from “take” prohibitions)
 Expedite habitat conservation planning (HCP)-streamline permitting process, especially for lo- &
medium impact cases
 “No Surprises” policy--if unforeseen circumstances, no further penalty if landowner under HCP
 Small landowners exemption--if used as
residence & 5 ac./less, or negligible effect
 Market mechanisms being considered
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Incentive Enforcement Systems
 Incentive
for polluting firms to
self-report or self-monitor
 Govt monitoring & collection of
penalties
 Benefits: Less govt cost; More
flexibility & privacy for firms
 By ‘96, 18 states & some federal programs
 Industry coalitions: paper mills, chemical/
energy/waste management companies
 Environmental groups generally skeptical
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EPA Self-Monitoring Policy
 Reduced
penalties
for firms selfreporting & taking
corrective action
 Eliminates punitive
penalties if no
major health
hazard
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EPA Enforcement
 Emissions
inspection once/yr
 Requires firms to submit water pollution discharge
records & compliance
 Random hazards difficult to monitor
– toxic waste
– nonpoint source water pollution
– proper chemical use/container disposal
 Chemical
sales relatively easy to monitor
 Education & “jawboning” are key
 Sanctions: penalties, criminal/civil prosecution
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1990 Clean Air Act & Amendments
--less federal court time/expense
 Penalties
up to $200,000
 Appeal to Administrative Law Judge
 Field Citations up to $5,000/day for serious
violations
 Emergency actions: threats to environment and/or
threats to human health
– fines $5,000 - $25,000/day
– criminal penalties up to 5 years
 $10,000
reward for citizens who report
 Self-reporting required
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Citizen Suits
 Private
citizens who are harmed may sue polluters
in many cases
 Expands enforcement efforts
 May force compliance, require damages
restitution, impose sanctions
 Evidentiary requirements make it difficult
 Often counter political power of firms/industry
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