Saturday, March 10, 2007

Why oceans and waterways should be privatized

It would benefit the environment and generate jobs and growth.

by StFerdIII

There are two main arguments in favor of privatizing rivers and oceans. The first is that private ownership of property guarantees proper water use and development. Historically the private use of land, including domesticated animals on private land, proves this to be a simple fact. Second, private corporations can work together with regulatory agencies to ensure that rivers, lakes and ocean areas are taken care of to meet in part; parliamentary, democratic, statutory and public opinion desires - much better than politicized bureaucracies. We all win irregardless of ideological dogma and mind-numbing political cant.

Admittedly many problems exist with privatizing water-ways and the seas. Some obvious issues spring to mind. First what areas are to be privatized exactly? Second how do we ensure that the general public interest is not corrupted by private corporations acting alone or with government collusion to destroy these once-public resources? Third what would be a fair price to privatize say, oceanic tracts? A fourth issue is a legal concern – how do we hand over title to private firms to manage water resources and how do we manage any future transfers from one private institution to another [sale, transfer, subletting of water usage etc.]?

All of these questions and certainly many others can be answered through existing precedents of public resource privatization. Numerous examples of private corporations working with regulatory agencies to conform to standards and legal/statutory requirements. While complicated there is nothing to prevent an improvement in the environmental stewardship of water through appropriately regulations and government oversight.

First issue: which oceanic or water-way areas are to be privatized exactly?

The most pressing issue would be to stop over-fishing and the rampanst destruction of the ocean's eco-system. Most fish harvesting [and much environmental damage] occurs from 3-100 miles off the coasts of Atlantic and Pacific nations. This should be the major focus in any water or oceanic privatization. A second concern would be to clean up domestic rivers and streams. Both urgencies can be resolved in the same way. Let’s deal with the oceans as an example.

About 50% of all international fishing is done offshore 3-100 miles. This seems to be a key focal area of resource management that so far has failed with the ‘tragedy of the commons’ problem [if there is no private control a common area or resource will be abused, and over fishing is the result]. We could extend the current 20 mile national oceanic boundary to 100 miles and within these enlarged national boundaries there is no reason why governments cannot work with private corporations to privatize oceanic assets and stop the depletion of ocean life due to bottom trawling and over-fishing.

By abolishing the tragedy of the commons and forcing private asset ownership of the oceans out to 100 miles, we would be able to forcibly protect and then improve renewable assets [more below]. Such a program can be pilot tested thoroughly in a few areas – in fact the US government has a few such programs running in the Gulf of Mexico and along both coasts. Early indications are that there is much promise in the idea of extending private ownership – with public safeguards – into the oceans.

Consider other renewable resources now harvested by private firms. An example of a successful privatization of once public resources would be the timber industry. Allowing private development of timber in a competitive market [more so in the US than in Canada where timber rights are heavily government controlled creating many issues]; would allow market forces and price points to act in a normally functioning way to regulate supply and demand. The timber industry has enough market balance to allow competitive firms to engage in resource harvesting and profit maximization.

An oceanic privatization could result in a net creation of jobs; technologies and safeguards to not only harvest with due care and diligence; but to do so at a profit which allows a faster [and probably radical] transformation to newer and better technologies. Advanced technologies are the best way to protect the environment.

Second issue: How do we ensure that the general public interest is not corrupted by private corporations acting alone or with government collusion to destroy these once-public resources?

Good concern. The last thing we need is a government controlled corporation destroying oceanic resources as a quasi-monopoly. Think of the postal service in Europe, or any nation’s telecommunications industry before deregulation - terrible service and inadequate product development. Internet applications and blackberry’s don’t appear from government monopolies.

The best example to get around this would be to consider the cases of private toll roads. All private toll roads in any nation are regulated – very closely – by a government body. This oversight ensures that the tolls are ‘reasonable’, the roads safe, a certain percentage of profits are used for maintenance, and that public concerns are handled properly to meet certain public goals [ease of access; proper billing; cleanliness; noise control etc.]. As well different toll roads are owned by different firms – none has a monopoly of all roads in a state for example.

There is no reason why such safeguards cannot be applied to oceanic privatization. You could divide up the 100 mile limit into sectors under government supervision and contract out to private firms to develop a successful and renewable source of oceanic assets. Targets can be set on fish resources that must be developed [stocks by specie] and the limits on fish harvesting. The objectives do not clash – for a private firm to profit they are obviously inclined not to destroy the stock of their product [fish and the related eco-system].

Third issue: What would be a fair price to privatize say, oceanic tracts?

No existing public property can be transferred to private ownership without a fair value exchange. The private concerns that would purchase these oceanic rights would have to pay a fair market value. Such a value could be determined by pricing agreements on prices administered by national governments in conjunction with the World Trade Organization [WTO] who might choose to involve the UN Oceanic and Fisheries agency. These groups could determine some price ranges per sector of the oceanic ‘property’ which could be ratified by independent analysis. Armed with such facts governments could set a reasonably accurate market price and solicit bids.

Fourth issue: How do we hand over title to private firms to manage water resources and how do we manage any future transfers from one private institution to another [sale, transfer, subletting of water usage etc.].

National governments would have to draw up oceanic property deeds for each sector within the 100 mile limit that is sold off. A copy would be kept with the WTO. Any sale of this title deed or subletting against it would need national government approval and the tacit agreement of a WTO commission which would be tasked with helping national governments legally arrange and manage such agreements.

Benefits:
Privatizing public resources is never easy. But there are enough case examples to make the privatization of the ocean’s fragile resources a possibility. The benefits would include: reduced destruction of the environment; reduced government expenditure in trying to combat resource depletion issues; the application of more advanced technology to steward the ocean; and less confusion over who should be responsible.

It is an idea worth trying before the oceans are consumed by the tragedy of the commons.

Some links:
www.mli.usm.maine.edu
http://www.oceana.org/north-america/what-we-do/stop-destructive-trawling/faq/