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Free-Market Environmentalists Gaining Stature
Group No Longer on Fringes as Bush Incorporates Proposals in Land Policies

By Eric Pianin
Washington Post Staff Writer
Monday, June 4, 2001; Page A04


In 1983, Terry L. Anderson, an economist with a strong libertarian bent, was
invited to Washington to lecture the Reagan administration's Interior
Department on the virtues of free-market environmentalism.

The session should have been friendly, because Anderson and the new Reagan
team agreed on the need to cut red tape to encourage development in the West.
But Anderson went much further, arguing that government subsidies and other
traditional environmental policies were far less effective in managing
natural resources and the environment than market forces and the
self-interest of private land owners.

When Anderson criticized subsidies for Western water projects as wasteful and
inefficient, Robert N. Broadbent, director of the Bureau of Reclamation,
exploded: "I've had enough of you kiddie car economists telling us how to run
this place."

For years, Anderson and his acolytes operated on the fringes of the
environmental policy debate, advancing proposals that were rejected out of
hand by Republicans, Democrats and mainstream environmental groups. But two
decades after the first Reagan administration, they are in the vanguard of a
land management movement that is gaining acceptance in the West and is being
used as a model by Bush administration officials looking for ways to shift
power and regulatory responsibilities back to the states.

Just last week, President Bush said in California that he will pursue "a new
environmentalism for the 21st century" that will show more deference to
states, localities and private property owners.

Anderson contends the most effective way to improve environmental quality is
to rely on "positive market incentives" instead of punitive government
regulations. At the heart of his theory is an unwavering belief that private
ownership of natural and environmental resources is better than government
ownership, and that competition between private business interests and
environmentalists for control of those resources will produce trade-offs
beneficial to both sides.

Although rejected by most mainstream environmental groups, Anderson's
free-market approach to environmentalism is gaining credence among some.
Defenders of Wildlife, a prominent environmental group, helped ease the way
for reintroducing wolves to Yellowstone National Park in the mid-1990s by
agreeing to compensate ranchers for any livestock they lost to the predators.
In Oregon, environmentalists pay farmers who promise not to divert millions
of gallons of river water for irrigation purposes to preserve a healthy stock
of coho and chinook salmon.

Seeking to build on local initiatives such as these, Interior Secretary Gale
A. Norton has asked Congress for $60 million to finance two new "private
stewardship" programs to assist landowners in protecting the natural habitat
of endangered species and support groups and individuals engaged in voluntary
land and wildlife conservation.

During a speech to an environmental policy conference in March, Norton
declared: "Unfortunately . . . some in Washington believe the free market
cannot be the environment's friend. Some in Washington believe the only way
to protect the environment is through Washington-based command and control.
But it's local people who see problems with their very own eyes who often
know the best solutions."

Norton's views closely parallel those of Anderson, a senior fellow at
Stanford University's Hoover Institution and executive director of the
Political Economy Research Center, a Bozeman, Mont., think tank that until
recently was heavily financed by conservative philanthropist Richard Mellon
Scaife.

"For many conservatives, environmentalism has always been an Achilles' heel,
because people wrongly assume you want to destroy the environment for
economic reasons," Anderson said. "But in reality, the tradition of
conservationism is actually a conservative one. We need to get the incentives
right by using property rights and markets to achieve what we want."

PERC, founded in 1980, describes itself as the oldest institute dedicated to
researching market principles to resolve environmental problems. But the
center is more notable as an incubator for ideas that challenge the core of
environmental protection -- from repealing the Endangered Species Act and the
Superfund toxic waste cleanup legislation to selling off national parks and
other public lands. It also has disputed that global warming is a serious
problem.

Anderson helped arrange a meeting between a dozen western scholars and
lawyers and then-Texas Gov. George W. Bush in Austin in May 1999 to brief the
presidential aspirant on such issues as vehicle emission standards, urban
sprawl, wildlife protection and grazing regulation. Among those in attendance
at the three-hour meeting were two close associates of Anderson -- Norton and
Lynn Scarlett, head of the libertarian Reason Center in Los Angeles.

After Bush's victory, Anderson served on the president-elect's Interior
Department transition team and pushed Norton for a high-ranking post in the
new administration. Norton subsequently chose Scarlett as her assistant
secretary for budget and policy at Interior, assuring Anderson a pipeline
into the department.

Anderson, 54, an affable, soft-spoken Montana native and avid outdoorsman,
received a doctorate in economics from the University of Washington in 1972.
Many of the school's faculty had studied at the University of Chicago and
were part of its strong tradition of conservative, free-market economic
thinkers.

Although Anderson and other free-market environmentalists are sometimes
associated with former Interior secretary James Watt and the sagebrush
rebellion of the 1980s, philosophically, they are distant cousins. The
sagebrush manifesto was broad and revolutionary: Transfer federal lands to
state control. Sell parts of national parks and block the creation of new
ones. Defend the large subsidies given to ranchers, miners and lumberjacks.
And leave property owners alone.

Anderson would keep national parks that are financially self-sustaining but
would sell off those lands that do not generate enough revenue, or turn them
over to private, nonprofit groups to run. He would do away with most
government subsidies, arguing that they promote inefficiency and result in
the waste of natural resources and the destruction of fish and wildlife.
Federal dam projects in the West have "exacted a heavy toll on the
environment," Anderson said.

As for the Endangered Species Act, designed to preserve rare wildlife,
Anderson says it has had the perverse effect of encouraging property owners
to take steps such as leveling old-growth trees to keep the species off their
land. Anderson says that many property owners are good stewards of the land
and that, if left alone, they would take steps to preserve rare species and
protect the value of their property.

Critics warn that many of Anderson's proposals, if taken seriously, could
lead to the dismantling of major environmental protection laws and the
breakup of the nation's most treasured national parks and forests.

"His rhetoric is calm, but his policy is very extreme," Carl Pope of the
Sierra Club said. "While I don't doubt there are a great many situations in
which mechanisms which make use of price and other market tools can be
effective ways to protect the environment, at the end of the day, these
organizations consistently put the market ahead of the environment."

Hank Fischer of Defenders of Wildlife, who worked with Anderson on the wolves
project in Yellowstone and efforts to restore the grizzly bear to central
Idaho and western Montana, says he is less troubled by Anderson's ideas.
"There are a lot of free-market people who scare me to death with their
ideas, but I always thought that Terry was more practical," Fischer said.


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