Defenders' Experts
Property Rights and Biodiversity
At the heart of all market-based public policy directed at the conservation of natural resources is a paradigm shift over what constitutes private property. The debate about this shift is a long one, and usually requires the introduction of impressive-sounding jargon and opaque references to influential economists. For our purposes, the conversation will be a short one, even at the risk of being incomplete. Private property, or a property right, generally includes three components: Excludability, divisibility, and transferability. Therefore, if you have a property-right you can keep other people from using it, divide or manipulate it as you see fit, and transfer or exchange it as you see fit. It is a protected claim, right, or ability to use or consume a good. This may be done directly or "indirectly through exchange" (Wilkinson and Thompson 6). Returning to the three elements of market-based policy discussed in the last section, the establishment of property rights comes into play immediately when a market-based policy seeks to define a natural asset, service, or output. This definition must include not only what it is we are targeting for trade or investment, but who owns what we are targeting as well. Markets exist to exchange property rights, and if no one can claim a property right, it cannot be traded.
In relation to the two market-based policy models of mitigation banking and payments for ecosystem services, property rights are being established for things that have historically been public goods, such as air, water, or biodiversity. Goods of this sort are naturally missing some or all of the characteristics necessary to make them private goods. In a sense, market-based policies help to turn public property into private property. It would be wrong, however, to conclude that the property rights attached to natural resources are the same as those attached to conventional commodities, like wheat or timber. Instead, these rights are more nuanced. They reflect a balance between public and private interests that, quite frankly, is not completely clear. Exactly how all three components of a private property relate to, what historically have been, public natural resources, is still up for debate. Though, it is important to recognize they will most always account for a high level of public interest in their use. So, while this transformation is real, it should also be noted that property rights under these policies are generally weaker than more traditional ones and subject to approval by forces outside the control of their owners. These distinctions will become clearer in the following sections as mitigation banking and payments for ecosystem services are discussed in detail.
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Banks designed to preserve natural resources make money by achieving public conservation goals.
