The Environment and Private Property

by Estanislao Fuentes Benítez

Private property is the best solution to ensure non-excessive pollution. This is a rather unpopular opinion these days. Most of the people are justifiably concerned about the deforestation of the Amazon rainforest, the indiscriminate fishing or the pollution in oceans and rivers, among many others.

But it is a curiosity to say the least why private property is getting all the blame for it, considering the majority of places that are being dramatically polluted are not privately owned. Almost all of them do not have an owner and because of that the polluter has complete immunity.

When we think of the deforestation of the Amazon rainforest for instance, there are only certain NGOs which are trying to protect them – there is no real owner responsible for the place. The same happens with overfishing, where companies can go and fish whatever they want because it is not owned by them. They naturally won’t try to be careful for the future – if they do not fish them now, maybe someone else will instead (it’s a classical case of a Tragedy of the Commons). River or oceans are polluted because the ones that pollute them are not the owners.

This is why the best solution for these dramatically polluted places is that they be privatized. If we look at it from the legal framework, the delimitation of private property can restrict the rights and obligations on the environmental damaging. Nonetheless, the property framework can give economic incentives so that it is cheaper not to pollute. Another important reason why it is better to privatize is because it is easier to identify who is polluting and what measures can be taken – for example, to fine him.

If we look at it from the individual perspective, it is always more likely that the environment will be taken into consideration when you have the same territory awarded with private property than, on the contrary, if no one is the owner. It is actually very simple: if you own the land, as it is yours, you will be careful to protect it because you will have to use it for the next years. Like the Chinese proverb says: “One never destroys what he intends to use.” In the same way, if you have kids, you will not destroy the whole land because you know your kids might need it. On the other hand, if it belongs to no one, the person who pollutes does it because he is not the owner.

Data shows the results of this clearly: Countries which pollute less generally protect property rights very well, while those who cause the worst environmental disasters are those that have a bad rule of law, abysmal protection of property rights, and so forth. The most crass example was certainly the Soviet Union which, despite living the collectivist dream of course, was responsible for many environmental disasters, and can easily be counted to the greatest pollutants of the twentieth century.

In conclusion, although it is thought that private property has destroyed the environment worldwide, we can see that the places that do not have private property are the ones that are being polluted or destroyed the most. On the other hand, the countries that respect private property are undoubtedly more careful regarding the environment.

Estanislao Fuentes Benítez is a former intern at the Austrian Economics Center. He is a law student at the Universidad de San Andrés in Argentina.