Ronald Coase gained the Nobel in Economics largely on the basis of two thoughts. One was to ask the question well, why do firms exist? The other was to note that there are indeed private sector solutions to environmental problems. Not to every environmental problem, true, but there’s a subset of them that can be dealt with by private sector action based upon simple property rights. His example was actually mining out West too so we can apply that lesson to this specific situation:
A lazy 59-mile float through deep limestone canyons, green meadows and pine forests that support the best brown trout fishery in the state, the Smith River is so popular it requires a lottery, the only one of its kind in Montana, to keep its fans from loving it to death.
Each year more than 10,000 people apply for one of 900 or so permits, and Smith has been trying to get one for years. “It was on my bucket list and it didn’t disappoint,” she said. “And it inspired me even more to protect this river from the mine that could destroy it.”
The mine to which she refers is the Black Butte copper mine, located on 7,500 acres of private land along Sheep Creek, 17 miles from where it flows into the river. In early April, about the time spring had freed the Smith and its tributaries from winter’s grip, the Montana department of environmental quality approved Black Butte and assured the public that it was issuing the most protective hard-rock mining permit in its history.
The mining company, Sandfire Resources America, promises to prevent the tailings – acidic waste rock and toxic liquids – from leaching pollution into nearby groundwater, creeks and the Smith River, into which they all run.
OK, lovely and valuable river, valuable because peeps like going “Aw, Shucks” at it. Nope, that’s not to demean those who do, that’s a human valuation of something and is as valid as any other human valuation of something. Given that there’s only us here applying values to anything all valuations are human valuations and that of a pile of gold – or in this case copper – is no more and no less valid that that of being able to go “Aw Shucks” at a river valley that hasn’t been affected by the extraction of copper.
We do though quite obviously have different people interested in different aspects of that value though. Thus we’ve got to find some manner of balancing the one with the other. Which is the point that Coase made. So, mine waste has to go somewhere – we shall ignore the claim that it’s going to be safely stored and leave the environmental case here as strong as can be – and so the people producing it should pay the people discomfited by its being placed somewhere.
This though depends upon our having enforceable property rights. And the people floating down the river don’t. The landowners around the river do and it’s not them doing the complaining.
Fortunately we’ve a solution to this too. Those currently complaining should go out and get themselves some property rights. This is rather easy too. The mine is owned by Sandfire Resources. Which has a current market valuation of some $200 million (hey, rough numbers, some say $130 million, others $170). Spread among those 10,000 who want to go rafting that’s $20,000 each.
This is entirely doable. Not necessarily with that specific 10,000 people but raising $200 million to save a “priceless” valley, sure, that could be done. And when it is the owners of the mine are also the people who wish to save the valley. So, they can lose their $20,000 and do so.
All of which sounds very much fairer than the current approach which is that the owners of the mine must lose their $200 million while those who would save the valley get it freebie, having had to spend nothing on taking the bread out of the mouths of others.
That is, you want a pristine environment then you go out and buy it and keep your environment as you wish. Taking it from others without compensating them is akin to stealing, isn’t it? No so much merely akin either.