The conservation of natural phenomena and the preservation of species are two facets of life that people value highly, but often these values often conflict with development and economic growth. Alan Moran calls for a market-based approach to preservation, arguing that buying and selling conservation assets in an open market offers the best means of protecting biodiversity.

In 1973 Treasury issued a slim paper entitled Economic Growth: Is it Worth Having? The paper showed how growth enables us all to enjoy more of the things we may want: goods, leisure, social welfare and so on. The paper was targeted against some notions that growth was less important than it had been. Those notions are rather more prevalent today&emdash;many now see growth as of secondary importance to environmental goals.

The recent Tasman Institute book, The Price of Preservation, was written within that context. Its focus is on:

• the threats to the survival of different species and the implications of species loss
• the issues involved in making choices about things that we value like the environment and how best to make such choices so that they truly reflect people's wishes
• how to ensure that choices are made in full recognition of their costs, their benefits and the available altematives.

Public policy is required if the value of biodiversity is not being adequately reflected in individuals' decisions between conservation and development. Such inadequacies are common when it is not possible for those who pay for things to obtain for themselves the lion's share of the value from the payment. As a result, people will try to pass off to someone else the payment for things that they truly value, and inadequate sums will be spent.

In the case of biodiversity preservation, action is urged for a variety of reasons. The most dramatic of these is the assertion that the world will one day face very serious survival problems if part of the interconnecting chain of organisms is lost. Ehrlich and Erlich (1981) likened this to rivets popping out of an aircraft fuselage&emdash;beyond a critical stage the loss of another rivet will destroy the structure. It is, however, a highly implausible argument since the flora and fauna that might be lost are almost invariably rare and unimportant in ecological processes.

The Extent of Species Loss

It is hard to read anything about biodiversity that does not stress the massive loss of species now said to be underway, largely as a result of tropical forest clearing. Estimates are quoted of between 1000 and 40,000 species being irretrievably lost each year. However, Simon and Wildavsky (1993) have cast much doubt on these claims. Numbers of recorded extinctions between the years 1600 and 1900 amounted to one every 4 years. Since 1900 the rate has been about one per year, the higher rate possibly resulting from better records. There is no evidence of a massive acceleration in species losses due to tropical deforestation or any other cause.

Since European sefflement, about 10% of mammals and 2% of bird species have become extinct in Australia, with a similar percentage listed as endangered. This is a major loss. However, it must be remembered that the loss of species largely occurred at a time when species were not greatly valued and has been accompanied by a process that has transformed Australia from a land barely capable of supporting a few hundred thousand people living in poverty to one that supports its present affluent population and that exports about three-quarters of its agricultural produce.

The extent of species extinctions is surely relevant to the decisions we might take on preventing them. However, before we embark on major expenditures, we need to be familiar with the dimensions of the problem.

Private Property Rights and Preservation

The real values people place on things and the real sacrifices they are prepared to make for them should determine the choices to be made. These valuations emerge only when things are owned by individuals or firms and can be sold to others who value them more highly. In this way, markets based on property rights allow us to place genuine worth on otherwise nebulously valued things.

Individual ownership is also a potent force for preserving valued assets. A great example of this is the African elephant. State-owned elephant herds in Kenya have been hunted for their ivory and slaughtered because of the crop damage they cause. During the 1970s elephant numbers declined to 10% of former levels. This contrasted with the situation in Botswana and Zimbabwe, where elephant herds are effectively the private property of villages. Elephant numbers there have increased as the villagers have commercialised their culling both for hunting and for their ivory. The decision by the world community to ban the trade in ivory is, therefore, bad news for southern Africa's elephant herds. It transforms many of them from valuable assets to dangerous pests that destroy crops.

It is not, of course, possible to vest ownership over a great many creatures and plants, but ownership of valued species automatically preserves a great many others that exist symbiotically with them. Ownership as an approach has an obvious application to the preservation of many creatures in Australia&emdash;parrots, crocodiles, and snakes are only a few of the native fauna that command high prices overseas.

Moreover, as people are placing greater worths on natural facets of life, the conservation values of goods like wilderness should be increasing relative to other goods. Increased voluntary conservation by wealthy individuals bears witness to this, as does the funding of conservation by public-spirited or public relations-conscious firms and by environmental groups.

A balance between biodiversity preservation and other areas of expenditure is often rejected by the more radical environmentalists. Sometimes it is claimed that we should take no action that might impose a risk on some valued environmental features unless we have exhaustively assessed that risk and demonstrated it to be unfounded. Such an approach would mean a vast and possibly infinite expenditure on research.

The Costs ot Preservation

What we need to avoid is a political determination of resource use. Political determination destroys the efficiency-promoting features of the commercial market. It brings fewer checks on economical use of resources.

Responding to public empathy with wildlife and to conserve species, Australian governments have enacted a considerable body of environmental planning and wilderness legislation restricting landowners from modifying their land. In the case of NSW, re-zoning of land to deny its use for its most productive purposes carries no provision for compensating the landowner. Moreover, as attested to by the experiences of former Environment Minister, Barry Cohen, who had to abandon his attempt to create a private sanctuary-cum-tourist attraction, the NSW bureaucratic web even prevents the regeneration of wilderness on private property.

In Victoria, the Flora and Fauna Guarantee Act, modelled on US legislation, also creates a fine bureaucratic sieve through which development proposals must be channelled. Because its ambit extends beyond species to 'ecological communities', almost all of which can be regarded as unique, its effect is insidious. Other states have been no slower off the mark in introducing cascades of regulatory impediments to development.

High profile casualties of environmental legislation paralysing development include Fraser Island sand mining and the Franklin dam. But of greater cost than the specific arrested developments is the demonstration effect. The Mount Todd gold discovery was quickly followed by the discovery of dangers to the Gouldian finch, which had a nesting area close to the mine site. Having established a suite of regulations, we can be confident that every major new project will attract its own species alleged to be threatened by the development. Time and money is required to head off these claims even if they don't stop the development. Knowledge of this is doubtlessly deterring new investment.

Policy Principles for Biodiversity Conservation

The basic principles for rational and non-distortive government policy on conservation can be boiled down to:

• public compensation to existing owners unwilling to sacrifice private goods for conservation
• establishing a conservation budget to compensate owners, incorporating actual and implicit expenditures and reflecting community valuations
• limiting the function of government conservation departments to policy co-ordination and advice on where the allocated funds should be directed
• encouraging conservation on private land by subsidising private conservation initiatives such as voluntary covenants. Individual resource owners should be free to use their land for purposes that satisfy their own private valuations. Anything less than this brings consequences that are adverse for productivity and income levels.

As environmental services are becoming more highly valued, there is increased scope for a better marriage of environmental and commercial goals. This would be supplemented by a government funded conservation trust entering the market as purchasers of conservation assets. In addition, voluntarism has an important role as evidenced by the success of Landcare groups and institutions such as the Victorian Conservation Trust, which administers covenants on land use.

With both private and govemment agents buying and selling conservation assets in an open market, there would be the flexibility to explore and develop a range of different types of assets and management plans. The use of tradeable covenants and easements would make multiple use and sequential use a practical altemative.

The requirements for voluntary exchange and compensation provides resource owners with the security necessary for longterm investment planning and reduce the potential for conflict created by increased conservation activity. These principles, along with a ceiling on govemment conservation expenditures, would assist individuals and conservation groups to rationally evaluate the tradeoffs and seek out complementarities between conservation and development.

Operationally, it is also important to contract out management and operations to non-government agencies. Experience from contracting out services to non-govemment agencies has demonstrated that costs can be saved if an activity is conducted by private rather than public enterprise. There are clear implications in this for areas like national park management.

References

Moran, A. J. and Chisholm, A. G. (1993) The Price of Preservation. The Right Hand Corporate Communications in association with Tasman Institute.

Erlich, A. H. and Erlich, P. R. (1981) Extinction. Random House, New York.

Simon, J. L. and Wildavsky, A. (1993) Assessing the Empirical Basis of the 'Biodiversity Crisis'. Competitive Enterprise Institute, Washington.

Reproduced from Search: Science and Technology in Australia and New Zealand with permission from Control Publications (Melbourne, Australia).

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