Saturday, December 24, 2005

The Environmental Benefits of the PRC

I figured this was a necessary first-touch, since at first glance, this seems to appeal more to socialist types than to environmentalist types. Indeed, the "sell the national forests" tone that would be enabled via phase 1 of the process of creating the PRC would likely offend most, if not all, environmentalist types. This is unfortunate. I believe that, in the long run, the PRC would be the most environmentally friendly initiative ever made. In this article, I will detail why I believe this.

Let's look at the short-term benefits of this first. Yes, it would create a great incentive for the Federal Government to sell off its parks and forests. The downside of this is that we wouldn't have an agency of force preventing clear-cutting, strip-mining, and other environmental no-no's. The upshot is that we would no longer having an agency of force allowing them for dirt-cheap rents to their political contributors when the environmental movement was looking the other way. There would also be great economic incentives to manage the land well.

Say a timber company bought up a parcel of national forest land. If the government was smart about it (and I'm not saying they would be, but you can bet the next owner would be), it would sell the land at the highest price it could get--which would be a price that accounted for the presence of good timber on the land. Suppose they clear-cut it. They would make profits on the timber they'd cut. Suppose they then tried to sell the land off, now that it was worthless for their purposes. They would probably have to sell it at a loss, due to the fact that there is no longer good timber on the land. Not only that, but if they held onto the land, they would likely be subject to lawsuits from "downstream" communities, if all that timber they cut was previously preventing erosion and flash-floods. Very likely, said timber company would end up going out of business. The land would then be bought by someone else--perhaps a more environmentally responsible timber company.

Not only that, but the amount they managed to sell it for would impact the "land only" value of the area around it (since we would have an actual "land only" value to go by). This would lower the rent payments made by their competitors... increasing the dire circumstances for the environmentally unfriendly timber company. And these natural economic laws (as opposed to avoidable human laws) go for each and every harvesting operation that could commence on previously govenment-held lands.

Now, these arguments would hold even if we sold the land outright. But the benefits go even further than that, from the point the PRC takes posession of roadways onward.

The average person owning the average home in the day the PRC completes its purchase program would likely not pay anything to the PRC. The amount they owed in ground-rent and the amount they were owed in dividends would roughly balance out. However, the people managing the roads they used to get around would also be paying rents to the PRC. Assuming the roads were paid for by the people that actually drove on them (the ground-rent costs to governments owning road systems--and the presence of a corporation willing to buy it at whatever they will charge--would be a powerful incentive for them to relinquish control to groups that could find a way to charge based upon use) the homeowner would also be indirectly paying the ground-rent for the transportation system. The farther they commute, the more they pay, which would be a powerful economic incentive for more efficient urban development, and a disincentive to the suburban sprawl we see today. In addition, I am willing to bet that, with transportion systems no longer insulated from actual market forces by the government, alternative, more efficient modes of transportation would arise. Light-rail is only the beginning...

Additionally, from the very beginning (assuming the interstate system was granted to the PRC from the beginning), the additional cost in ground-rent to maintaining road systems would be an economic disincentive to the continued development of road-pork. Many road-building decisions are made based upon a legislator's desire to shift federal tax dollars into his state's construction industry (earning him votes of gratitude from construction workers and others who would otherwise be paid less or be unemployed). With every roadbuilding appropration having to include ground-rents paid to the PRC, it would be more difficult to push road-pork through Congress.

And to those naysayers who see the decay of our road system as the beginning of economic ruin, I remind them that the transition from our current system to the PRC system would be a gradual process. It won't happen in a day. Heck, it probably wouldn't even happen over the course of fifty years. The market would have plenty of time to adjust to the new paradigm, and I think it will be in even better shape once the transition is complete.

Then there is consumption of fossil fuels. Petrolium reserves could be sold off to companies, giving them an exclusive right to drill for oil in a given area. (The government could continue to hold onto ANWAR as long as you can keep them doing it, so long as the ground-rent could be paid through taxes.) However, they would have to pay rent based upon the market value of said reserves, and given how lucrative oil drilling is, they would pay a fairly high price. This would raise the price of the oil when it reached the market, which would cut consumption. This, in turn, would cut pollution.

Very simply put, when the two issues (economics and ecology) cease to be insulated from one another by government subsidies, the list of environmental benefits are endless. I'm sure there are more than I have listed here. This is an issue I am really looking forward to getting into a good argument with environmentalists on. Post your critiques; I shall answer them.

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