Free market environmentalism

I am not a goofy mother-nature-worshipping tree-hugger but I consider myself an environmentalist. I would not incite civil disobedience against the building of a nuclear power plant in order to save some rare amphibian, but I love nature. I'd rather live in the Midwest than in Manhattan. I'd rather go hiking in the mountains than visit a museum of modern art. I'd rather swim in the ocean than go to a White House reception. I always turn off the lights when I leave the room and the heat when I leave the apartment. I don't do it in order to reduce my "carbon footprint" and it's not just about my monthly bills-I conserve water even though it's included in my rent. It's good stewardship.

If I get to vote on it, I'd most likely choose to preserve and expand all national, state, and local parks. But the economist in me may employ my brain to override my emotional decision. Is it proper and efficient for the government, he may ask, to use coercive powers to prevent private developers from opening a new bar and grill at Jones Beach or building a new hotel in Yellowstone? Is it right for me to use the political process to satisfy the desires of my heart against the interests of producer Ben and consumer Jerry? Shouldn't we leave that function to the market as we do with other goods and services?

Consider the choice between building a new skyscraper in Central Park and keeping the area as it is. If the land gets sold to Donald Trump, we'll get the building; if it becomes the private property of Alex Tokarev, we'll keep the park. Right? Not necessarily. The Coase theorem tells us that the outcome has very little to do with how Trump or Tokarev feel about nature. Unlike the political arena where the battle will be between lobbyists, the market will take into account the demand of the people for a park, i.e., how much they are willing to sacrifice to preserve it, relative to their demand for the wealth produced in the form of a new skyscraper.