19 Sep 2008

Economically Trivial Fish (or Farms?)

In response to this post, Fixed Carbon said...
A friend commented to me recently that the wealth generated by the agricultural sector is so much greater than that of salmon fishing and the other economically trivial concerns of environmentalists that we should forget about the fish. What do you think?
This comment raises two big concerns -- marginal values and property rights. Although those concepts can take ages to discuss, here's my simple summary:

The marginal value of something falls as you have more of it. The first glass of water (in the desert) is worth a LOT compared to the millionth glass of water out of a reservoir. Thus, it's not a simple case of all fish or all ag -- but where to balance between those two extremes.

Property rights are important. You can't just knock down someone's house to build something "more important" (unless you are in China or are named Kelo), so it makes no sense to wipe out a river and the "rights" inherent to the flows of water and fish in the river. The same case can be made for riparian rights to divert flows from a river onto adjacent farmland. What matters, once rights are determined, is that those who want to alter the distribution of rights be able to negotiate with those who hold them. Negotiation should involve money (and perhaps charm) -- not guns or legal coups.

Bottom Line: Farmers and enviros will have to live with each other. Better yet, they have the greatest incentive to protect property rights. (If they don't, urbans will eat both of their lunches.)