Oct 242013
 
 October 24, 2013  Posted by at 11:05 am New Economics, Resilience   Add comments

Guest post by Economist Nate Peach in regards to E3 Network’s Future Economy Initiative:

Open-Space Under Threat

Public budgets are becoming increasingly strained and manipulated due to economic and political factors. Though temporary, the recent federal government shutdown is an extreme manifestation of this phenomenon. If the ability and/or willingness of government to fund, protect, and manage our open-space continues to deteriorate there will be profound environmental and social consequences. This inability or unwillingness will likely result in decreased protection and access to open-space and parks. Public spaces will be developed or acquired for private interests. Spaces still managed by public agencies will increasingly rely on the pay-for-use model. These trends are especially troubling when the public’s value for preservation and stewardship are ignored.

While the strain on public budgets is problematic in its own right, growing income inequality will only exacerbate the consequences of this straining. The enjoyment of the natural environment is increasingly only for the economically advantaged. Inequity of access and use will continue as income inequality proceeds on its current trajectory. Willingness to pay is directly related to one’s ability to pay. As such, pay-for-use ignores equity of access to our public spaces.  Growing inequality will drive a deeper wedge between individual’s value of amenities and their ability to pay for access and preservation. 

The good news is that there are examples of private property being modified to be more like common or club goods. Developing a framework which identifies successful public-private partnerships will help isolate the factors leading to these success stories. While public-private partnerships may not be a first-best option, given the aforementioned realities it may be an appealing second-best solution when the alternative is open-spaces becoming complete private goods. Properly constructed, said partnerships may be more robust over the business cycle while simultaneously facilitating increased use and exposure to the natural environment. Exposure facilitates a deeper, more inclusive public value.

In order to be useful and informative this framework must have a realistic conception of the private sector’s short-termism. This short-termism manifests itself in excessive individualism and profit maximization. As the framework accounts for these elements of the private sector it must simultaneously appreciate the ways in which the state represents society in the short and long run. The framework may draw upon Coasean considerations of transaction costs and bargaining, Ostrom’s insights into the governance of the commons, as well as other economic, legal, and political literatures that speak to sustainable solutions to protecting our natural world.

 

Please comment below, on twitter, or send in your own guest post submission via email to director@e3network.org.

Kristen Sheeran

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