This commentary is by Macie Millstein, Cassady Turnbach and Nicholas Perugini, who live in Burlington and are affiliated with the University of Vermont.
To tackle the threats of climate change and natural resource scarcity, our government officials must implement policies that incentivize conservation while punishing corporate negligence.
While it is not a silver bullet, the idea of a common asset trust is one way to effectively create common property rights to protect ecosystems from private exploitation.
A common asset trust is a collection of policies, institutions and funds that aim to sustainably manage our natural capital assets. The controls of the trust are enforced through the cooperative efforts of society and by the government, which ultimately ensures the agreements of a property rights regime are maintained.
This system functions under principles founded by Nobel-winning economist Elinor Ostrom, who asserts the importance of collective agreements, participatory systems, and a proper structure of nested enterprises to oversee resolutions.
Modern neoclassical economic theory supports the position that the private market model, as opposed to the public model of common asset trusts, is a superior strategy for resource management and responsible use. As explained in an essay authored by Robert J. Smith in 1981, overharvest and overexploitation of natural resources is a characteristic of public land ownership. In the public model, each actor is “pitted against” one another and the fear of scarcity results in the rapid depletion of the stock.
Smith argues that in the private model there are incentives for preservation of the stock, such as economic gain from hunting or even from the personal enjoyment derived from ownership of the stock.
Although there are incentives inherent to private land ownership, environmental degradation is characterized time and time again by private greed. One example of such is the Elizabeth Copper Mine in South Strafford, opened under the ownership of James W. Tyson of the Tyson Mining Co. Before its closure in 1958, nearly 100.5 million pounds of copper were extracted from the open-cut and underground mining sites.
Due to insufficient regulation, this privately owned mine externalized costs of production, resulting in such severe pollution that the mine was declared a Superfund site in 2001. Twenty years and $90 million later, the old copper mine is nearing the end of the remediation process.
While not every private development project ends in environmental ruin, the sale or lease of public land in Vermont is at risk of such outcome due to inadequate policy. Taking into account property values and the value of minerals extracted annually, mining companies in Vermont pay only 1.6% in property taxes.
Minerals, a nonrenewable resource, are at risk of becoming extremely scarce with overexploitation. which could threaten the availability of many Vermont jobs. There will be a loss of income as well as the costly responsibility of cleaning up mining sites and environmental damage. This burden often falls on the average citizen and taxpayer, who are left to pay for the collective damage caused by extractive industries that place the cost of externalities on the public.
Vermont, a state rich in natural capital, can strengthen protections over such resources through the formation of a common asset trust. The Vermont Common Asset Trust was proposed in 2005 by Gary Flomenhoft of the Gund Institute. In 2007, the Vermont Common Asset Trust was developed into a bill by state Sen. Hinda Miller and Gund director Robert Costanza with the goal of enacting policies to protect common assets and benefit present and future Vermonters. It was reintroduced in 2011 and again in 2012, failing to progress beyond committee.
With renewed support, the Vermont Common Asset Trust has the power to benefit future Vermonters by better protecting resources such as groundwater. Though abundant in our state, groundwater is a finite resource that most Vermonters depend on.
Vermont is the only state in New England that does not regulate commercial water bottling industries, and there are several companies that extract Vermont water for sale in other states and outside the United States. The unregulated exploitation of resources leaves Vermont at risk ecologically and economically, vulnerable to depletion of aquifer resources and damages to aquatic ecosystems.
On top of this, the threat of scarcity issues looms over future generations. Proponents of the Vermont Common Asset Trust aim to manage Vermont’s groundwater commons through policies of aquifer quotas, rent collection, and payments of dividends to all citizens.
The sale of public lands to private entities raises the question of whether the net profit actually outweighs the insurmountable costs incurred from mining and development. The Vermont Common Asset Trust is a step toward responsible resource use and sustainable land management to protect the health of the planet and future generations.
