Nonuse Rights are a Win-Win Conservation Strategy

By Bryan Leonard

In a recent post on the popular “Marginal Revolution” blog, economist Alex Taborrok highlighted a coal mine for sale in West Virginia for a modest $7.8 million, and suggested that an effective green policy might focus on buying fossil fuels and keeping them in the ground. Indeed, this idea of “supply side” climate policy has gained attention in top journals recently including the Journal of Political Economy and Science. It rests on the same basic logic that underlies the approach taken by the Nature Conservancy and hundreds of land trusts whose focus is the conservation of open space: simply purchase what you wish to protect.

Unfortunately, and somewhat ironically, this approach is actually illegal for federally owned minerals in the United States and many other countries. As I point out in an article in Natural Resources Journal with Shawn Regan, the terms for resource use on federal land for everything including grazing rights, timber harvests, oil & gas leases, and fishing quota are subject to “use it or lose it requirements” that effectively block participation by conservationists. If a conservationist were to purchase a grazing allotment or submit the highest bid at a timber sale or oil & gas auction, not only would the rights be revoked and allocated to the next highest bidder, the conservationists may find themselves facing criminal charges.

A few examples illustrate the point. In the 1990s, the Grand Canyon Trust bought the rights to several large grazing allotments near Grand Staircase Escalante, only to learn that in order to keep their rights, they had to purchase and graze a minimum number of cattle (which they did). In 2008, Tim DeChristopher won an oil and gas auction in Utah but lacked the funds to actually pay for his bid, and ended up spending 2 years in prison for making false statements to federal officials. Terry Tempest Williams took a more sophisticated approach in 2016, actually forming an oil company and ponying up the cash when she won an auction in Utah, but the government revoked the lease when they learned she had no intent to develop it.

Why do these policies exist? For the most part, resource use on public land is governed by a variety of laws first passed in the 19th and early 20th century during Westward Expansion, and they haven’t changed much since. At that time, the nation’s resource management goals were quite different than today’s. Then, the goal was to promote migration West and facilitate productive use of what were very abundant resources, but there was also a major fear that eastern financial interests--so-called “robber barons”--would monopolize control of the nation’s resources and lock out smallholders. Hence, “use it or lose it” requirements were designed to prevent monopolization and promote production.

Over a century later, policy priorities have shifted. Pristine landscapes are much rarer than they were in the 1800s, and the value we ascribe to them has grown considerably. At the same time, national and global concern over environmental externalities of extractive resource use have led policy makers to strive to limit production rather than promote it. But the law has not kept up. As my co-authors and I argue in a recent Science article, “use it or lose it” requirements prevent a win-win approach to conservation, and instead invite lobbying, litigation, and controversy.

In the article, we argue that old laws should be updated to consider conservation as a valid “use” of public natural resources so that conservation-oriented NGOs can purchase resource rights and withhold them from production. This approach has several advantages that we detail in the paper. One advantage is that markets help reveal information about the highest valued use of a particular resource or landscape. Hence, allowing nonuse rights could help us better understand the magnitude of nonuse values themselves. Another advantage is that nonuse rights could help secure more durable conservation outcomes, in contrast to executive actions such as monument designations that can ping back and forth depending on which party controls the White House. Moreover, market-based conservation ensures that existing stakeholders and resource users are compensated, providing a win-win. This stands in major contrast to other proposed policies that would simply revoke production rights without compensation.

Of course, there are potential concerns. For one thing, governments earn substantial royalty revenues from some resources (oil & gas in particular)--nonuse contracts would need to be designed to take this into account. Another problem is political opposition from resource-dependent communities, who may stand to lose from reduced production. Still another concern is how to define “nonuse” for resources where active management is needed. Rangelands and forests may benefit from active human use of the landscape, so pure nonuse may not be desirable. Nonuse rights would perhaps need to build in these management responsibilities.

Although nonuse rights should be approached with care to avoid these problems, they hold the potential to resolve long-standing disputes over the best use of public lands that comprise roughly 50% of the American West. After over a century of litigation and lobbying in the tug-of-war associated with “multiple use” mandates, it is time to try something different. Markets could help reveal when and where conservation is valued more highly than production, ensure that existing stakeholders are compensated, and provide a framework for flexible adaptation if relative values change in the future as new information is revealed.

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