Monday, April 30, 2018

Ships in the Night

Talk about ships passing in the night!

The Missoulian today reports on the Republican US Senate candidates’ positions on the perennial question of the choice between economic health and environmental protection.  And in the same issue, there’s a piece out of the Flathead explaining just how important access to a high quality environment and outdoor recreation is to the health of Montana’s rural  economies.

As politicians of all stripes usually do, the Republican candidates (Rosendale, Fagg, Downing and Olszewski) want you to know they can give you whatever you want. Reconciling the competing demands of the economy and the environment is simply a matter of striking the right balance between protecting natural areas and outdoor recreation, on the one hand, and providing jobs in extractive natural resource industries on the other. To see it any other way, they tell you, is to embrace a false dichotomy.

Now there is a false dichotomy here, but it’s not what they think it is. It resides, rather, in comparing the benefits created by protecting the environment with the labor costs of exploiting it for commodity production. Those benefits and costs are apples and oranges.

If politicians want to fret about the jobs that will be created by using natural resources in different ways - and it seems that that’s about all politicians want to fret about - they can have at it.  Maximizing job creation and labor costs is not really a very sound basis for managing resources - it’s a far cry from finding their highest and best use - but if you are going to do it, you ought to look at the jobs created by every use, not just resource extraction. And as the Flathead article makes clear, protecting the environment and the opportunity to recreate creates lots of jobs. Not because of commercial activity associated with recreation - guiding, fishing gear sales, snowmobile rentals and so forth - but because people want to live and work and do business in nice places where they can have fun outdoors. It simply isn’t true that protecting the environment means people will have to go without jobs. On the contrary, they gravitate toward high quality environments and bring their jobs with them.

Another way of comparing alternative natural resource uses is by weighing the benefit each use provides. In the case of extractive uses, that’s pretty straight forward: the benefit is the market value  - or better yet, the market value net of production cost - of the commodities extracted (coal, for example, or timber). In the case of conservation, the benefits - again, best measured net of production costs - are the streams of environmental services (clean water, wildlife habitat, recreational opportunities, and so forth) that are preserved. Those services may not have a market price, but they do have substantial economic value. 

This comparison of net benefits, if policy makers were willing to engage in it, would drive resources to their highest and best use. But as long as they insist on comparing the benefits of doing one thing with the costs of doing another, we are going to get resource management decisions that are all wrong.