COLUMN ONE : Making It Pay to Conserve : Money talks louder than legal force, argues a new breed of environmentalist. The best way to preserve a resource may be to give people a stake in it.

By MICHAEL PARRISH

Oct. 28, 1989 12 AM PT

TIMES STAFF WRITER

In the continuing battle over the battered African elephant, Zimbabwe and other southern African nations fought unsuccessfully earlier this month to head off an international ban on the trade in ivory. For their efforts, they were painted by some in the Western press as uncaring conspirators with the poachers.

To the Zimbabweans, especially, it was a frustrating defeat. They want to see the great beasts saved as much as anyone, they note. And they claim, with a good deal of evidence, that they are already more successful at it than any trade ban ever will be.

“A total ban has been in place in Kenya for many years, and its elephant population has undergone what is perhaps the most spectacular decline in Africa,” Zimbabwe acidly reminded the Ivory Trade Review Group. “We are asked to follow a road paved with failure when there is adequate evidence of other routes which do work . . . . What kind of sickness is this?”

The sickness, as the Zimbabweans see it, is the often-useless reliance of Western conservationists on the force of law to protect wildlife and the environment. Better, they say, to adopt the strategies of environmentalists who believe that money talks louder than moral--or police--force.

Influenced by conservative economic theory, these conservationists are promoting the lure of financial incentives in the cause of environmental preservation. On the ground, that means enlisting the cooperation of their traditional antagonists--ranchers, developers, manufacturers or African villagers--by giving them a direct financial stake in preservation.

It’s an idea that is finding growing support in the rancorous international debate over how best to approach conservation in the 1990s.

“We probably have taken the regulatory system, what we call the command and control system, about as far as we can take it,” said former U.S. Environmental Protection Agency Administrator William D. Ruckelshaus. “If we’re really going to make additional progress, we have to figure out how to get the economic incentives in line with our environmental goals.”

The stakes become especially high as the battle moves to the Third World.

“Unless you couple environmental protection with economic development,” said Ruckelshaus, “there’s just no way in which these developing countries in particular are going to pay enough attention to the environment.”

The strategy, well-established outside the United States, already is in use across a broad spectrum of projects here:

--In Hawaii, the erosion-pocked remnants of a unique forest may soon be on the way to ecological recovery. Castle & Cooke, owner of extensive tracts of island land, has joined in the rescue with the Nature Conservancy, the real estate arm of the environmental movement.

The two are negotiating final details of a trade in which Castle & Cooke would agree to a perpetual ban on development in the old forest in return for the Conservancy’s best effort to return its native trees to a healthy state. If successful, the project would dramatically enhance the value of two resort hotels Castle & Cooke is building nearby.

--An innovative feature of President Bush’s clean air bill, the one big piece of environmental legislation before Congress this year, is its use of economic incentives to allow manufacturers and utilities to sort out among themselves the most efficient ways to meet air-pollution standards.

As the South Coast Air Quality Management District already does in Southern California, the Bush bill would set up markets in which companies able to meet the standards could sell any excess pollution “rights” to those not yet in compliance.

--A Louisiana timber company has turned the nuisance of a deer herd, and the hunters it attracted, into a profitable fee-hunting division that supports eight full-time biologists managing the habitat not only for an expanded, healthy herd but for dozens of endangered species as well.

--To change public perceptions that wolves were going to be reintroduced to Yellowstone Park unfairly, essentially at local ranchers’ expense, the Defenders of Wildlife group set up an insurance fund to pay for any cattle killed by the returning wolves.

Many economic-incentive conservationists consider the African elephant just another example of the failure of traditional strategies.

In Kenya, despite a 13-year ban on hunting and commerce, elephants have been relentlessly poached. The country’s herds have declined by 70% in the last decade, with local people in many cases aggressively aiding in the slaughter, undeterred by poorly funded, often corrupt game wardens.

But, to the south, in Zimbabwe, poaching is rare. Its 50,000 well-managed elephants are protected by a police effort that regularly spends a hefty $200 per kilometer of elephant range. The herds have been growing by a natural 5% annually. In fact, game managers cull 1,000 elephants a year to avoid overgrazing. And villagers living near the animals guard them, because trade in ivory, hide and meat is both legal and lucrative--more lucrative than cooperating with the poachers.

Kenya’s methods reflect the conservation ethic most popular in the United States--that commercial exploitation of wildlife and other scarce resources is inevitably part of the problem, not the solution. Many environmentalists feel also that humans as a species have no moral right to make commodities of elephants or antelope.

According to this tradition, wildlife and other natural resources are best protected by government regulation and funds. And, with elephant ivory, such groups as the World Wildlife Fund contend, the market can only be controlled by police, not trade controls.

The economic-incentives view holds that rule-making from the top hasn’t worked and that political meddling and corruption, sluggish bureaucracies and wasteful conflicts with polluters, ranchers and developers have stalled a generation of conservation efforts.

Although some American conservation groups already use tactics from both camps, market incentives aren’t entirely trusted by most U.S. environmentalists.

“I am one who has been trying to sort my way through the thicket,” said Michael McCloskey, chairman and grand old man of the Sierra Club. “There are people in the organization of all stripes of opinion,” he said. “If you talk to some of our pollution lobbyists, they are pretty skeptical of economic approaches.”

Economic-incentive environmentalists contrast their methods with what they consider the failure of “command and control”--a phrase and philosophy borrowed from academic economists.

The new free-marketers contend that enacting laws is futile when they go against powerful economic forces. So they contrive ways to use an economic carrot, as well as a regulatory stick.

For instance, they argue that cutting villagers into the deal when an elephant is culled or sold to a hunter--in a tangible sense giving them property rights in the animal--encourages Zimbabweans to value and preserve them. In the United States, notes one market-incentives environmentalist: “You don’t just go out and shoot (someone else’s) Angus.”

In contrast, in the African countries where elephants are protected only by force of law, they often compete with cash-producing livestock for grazing land while producing no profit. And they are poached.

“If you have markets, people have incentives to look to the next year, and the year beyond that, and you have a stream of income,” said political scientist Randy Simmons. “If you don’t have markets, you think: ‘Let’s get it before somebody else does.’ ”

Simmons is director of the Institute of Political Economy at Utah State University and a trustee of the Political Economy Research Center, a tiny, hard-core, market-incentives think tank based in Bozeman, Mont.

Simmons and others further contend that fair markets last longer than a politician’s promise. Political Economy Research Center senior associate Richard Stroup, who worked for then-Interior Secretary James G. Watt, estimates that environmental groups spend about $400 million a year for public relations, lobbyists and the like in their legislative efforts, and in the long term aren’t getting their money’s worth.

“You can’t buy a political solution,” Stroup said. “You can only rent one.”

If nothing else, economic schemes often bring a fresh, irreverent skew to traditional environmental tactics.

The Montana chapter of Defenders of Wildlife recently placated ranchers and politicians who had mightily resisted their plans to reintroduce the wolf to Yellowstone Park. Rep. Ron Marlenee (R-Mont.) reflected much public sentiment when he compared the wolves to cockroaches.

But the Defenders had long argued that wolves would cause few cattle losses, and so, said Hank Fischer, the Defenders’ Northern Rockies representative: “We decided to put our money where our mouthes were.”

Instead of mounting a traditional political campaign, Defenders set up what is essentially an insurance plan. They’ve raised $50,000 so far for a fund to compensate ranchers for any cattle lost to the restored predators. They’ve paid less than $5,000 for cattle kills by wolves already straying down from Canada. Most ranchers and newspaper columnists have calmed down. And the wolves may be on their way back to Yellowstone.

International Paper Co. has turned a fee-hunting system in its Louisiana, Arkansas and east Texas woods into a profitable division of the timber firm. It now supports eight wildlife biologists managing 5,000 acres of wetlands as well as habitat maintaining more than 40 endangered species and a thriving white-tail deer herd. Annually, up to 25% of the deer are “harvested,” as hunters reverently intone, which keeps the deer from overgrazing. And which pays the bills.

“If I can attach an economic value to wildlife, I can manage them and they will prosper,” says Tom Bourland, manager of wildlife ecology for the paper company, who estimates that for every dollar the firm invests in its wildlife it gets back three.

“We’ve spent a lot on basic research,” Bourland said. “But there’s no way I’d have eight biologists on staff for altruistic reasons.”

The Nature Conservancy’s deal with Hawaii’s Castle & Cooke is a typical stratagem of the Conservancy, which has long used economic schemes in its campaigns to set aside habitat. So far, it has protected 4 million acres, by some estimates worth more than $1 billion--more, the Conservancy notes, than the U.S. Fish and Wildlife Service, the primary federal agency charged with wildlife habitat conservation. The Conservancy raises cattle both as an ecological tool and for profit on certain preserves, and it also operates or derives income from bookstores, oil wells and several guest ranches.

Bush’s clean air bill uses market incentives to allow some polluters to sort out for themselves how best to meet federal pollution standards--a scheme largely drawn up for the Administration by the Environmental Defense Fund, long a leading proponent of economic-based solutions.

Industry greeted the Bush proposal with guarded relief. Meanwhile, some Administration policy-makers are concerned with more than just giving industry the chance to decide how to cut emissions. Economic-incentives proponents such as C. Boyden Gray, counsel to the President, see markets in pollution “rights” efficiently bypassing the clogged arteries of governmental bureaucracy.

“The political institutions that we have in this country simply cannot cope with the system overload,” said Gray. “ . . . And that’s why we have not had a Clean Air Act revision, in my opinion, for 12 years.”

“Where you can get the profit motive working,” said Thomas Graff, a senior attorney of the Environmental Defense Fund, “you will see a lot more results more quickly than if you’re simply trying to take something away from a polluter. . . . You had a regulatory system that worked pretty well through the ‘70s, but, in essence, a confrontationist approach breeds its own response.”

Other environmentalists also support the free-enterprise aspects of the Bush bill, if guardedly.

“I do not think there has been objection to the kind of ‘market incentives’ that are embedded in the Bush acid rain bill, in principle,” said David G. Hawkins, a senior attorney with the Natural Resources Defense Council. He and others do object, however, to mechanisms they see as unfair to one area over another, or that don’t lower the total amount of acceptable pollution.

“What we are interested in is how to get rid of pollution, how to reduce pollution levels further,” said McCloskey of the Sierra Club. “ . . . And marketable permits don’t address that question. What they do address is how to do it for less cost.

“And historically,” McCloskey added, “command and control techniques have taken some major bites out of the problem.” He cites as examples tailpipe controls on autos and scrubbers on new power plants.

McCloskey and others worry that market incentives may in the end be no more than “the fascination of academic economists,” as he puts it, “to be used to take nibbles out of the problem, around the edges.”

Yet both sides agree on the utility of economic strategies in some circumstances, particularly in eliminating costly inefficiencies. And one common target is federally subsidized timber and irrigation water.

A week ago, for instance, the Wilderness Society announced the latest in a series of studies to find economic incentives for change in American forests. The conservation group plans to examine such ideas as modifying lumber mills to turn out finished furniture, instead of raw lumber. This could reduce the amount of timber being felled while maintaining rural economies, because jobs lost cutting trees would be replaced by jobs created in the new manufacturing plants.

NEXT STEP

The first public hearing in this country--billed Globe-scope Pacific--on “Our Common Future,” the report of the United Nation’s World Commission on Environment and Development, will be at the Biltmore Hotel in Los Angeles from Tuesday to Nov. 5. The commission’s call for planning to produce environmentally sound progress is at the center of conservation discussions worldwide. The hearing, featuring business, environmental and government leaders, will accompany speeches by former President Jimmy Carter, Sens. Albert Gore Jr. (D-Tenn.), Pete Wilson (R-Calif) and Timothy E. Wirth (D-Colo.), former EPA Administrator William D. Ruckelshaus and others.