The Wisdom of Selling Off Isolated Public Forest Land

Cite this Article
Thomas A. Lambert, The Wisdom of Selling Off Isolated Public Forest Land, Truth on the Market (February 23, 2006),

An article in the current issue of the Economist contends that “American environmentalists could be forgiven for throwing up their hands and heading north” (to Canada). Why? Because “the Bush administration wants to sell some 300,000 acres of national forest land in 35 states, mostly out west.”

I’m afraid the normally sensible Economist (see, e.g., here) is wrong on this one.

To begin with, the lands at issue here are not exactly environmental jewels. These parcels are not contiguous to large tracts of federal land. Instead, they are bits and pieces that are, for the most part, located within townships. (For example, here‘s a map of the lands proposed to be sold in the Bitterroot National Forest in Montana — the National Forest lands are green; the parcels to be sold are red; township lands are white.) It is highly unlikely that the highest and best use of these isolated lands is forest preservation, and it’s almost certainly the case that the costs associated with continued federal oversight of the lands are not justified by the negligible environmental benefits they create. In short, it makes no sense to continue to pay tax dollars to maintain these properties, whose highest and best use is probably something other than preservation.

In addition, if the highest and best use of these isolated parcels is preservation, someone besides the government should be in control. Government bureaucrats, who (like all other folks) seek to advance their own private interests, tend to be poor environmental stewards. As one of Geoff’s colleagues has argued (and as public choice theory would suggest), bureaucrats charged with managing public land are particularly vulnerable to discrete, well-organized interest groups, such as timber interests and rancher groups seeking grazing rights. They therefore tend to manage multiple-use public lands in a manner that reflects the desires of those groups. Bureaucrats also like to expand their budgets (after all, one’s prestige — and often one’s pay — rises with one’s budget), so they’ll tend to over-pursue budget-enhancing policies like intra-forest road construction. Private conservation groups do a much better job of protecting pristine lands.

So shouldn’t the environmentalists view this sale of forest land as a huge opportunity? They can now ensure permanent protection for these parcels by purchasing them outright or buying conservation easements from whoever ultimately buys them. This is certainly enhanced protection. After all, the green groups can buy the land or conservation easement; they could only rent the votes of legislators and bureaucrats charged with managing the lands. Perhaps they should spend some of their vast hordes of money on actual land preservation, rather than lobbying. (The Nature Conservancy, to its credit, takes this tack.)

Why don’t most environmental organizations want to enhance environmental protection by becoming actual landowners? Maybe it’s because they want a free lunch. Under the current system of public land management, green groups can always demand that public land be kept pristine without really considering the costs of that demand. If they succeed in their lobbying efforts, they get lots of credit (and the enhanced fundraising ability that comes therewith), and the costs of the decision to keep the land pristine are shared throughout society (i.e., among all the “owners” of the land). In short, they externalize the costs of land preservation.

If they owned the property at issue, by contrast, they couldn’t do this. The owner of a parcel of property ultimately bears the opportunity cost associated with selecting one use over another. If, for example, you could lease your backyard for wedding parties for $1,000 per month, then your decision not to do so and instead to leave it as a little oasis of solitude effectively costs you $1,000/month. Bearing the full costs and benefits of your decision regarding the use of your backyard, you’ll likely choose the usage option that creates the most value.

Take the Audubon Society, for instance. The Society opposes drilling for oil in the Arctic National Wildlife Reserve (indeed, the Society issued a flyer proclaiming, “A Refuge Is No Place for Oil Rigs!”). This makes sense: The Society does not bear the opportunity cost of the decision not to drill (or, at most, just the tiny fraction comprised of its pro rata interest in the overall cost to all Americans), and it gets lots of benefit from its public opposition to drilling (enhanced ability to raise money, etc.).

Would it act differently if it owned ANWR? Probably, for it would then have to recognize the loss of foregone drilling profits as a cost of its decision to oppose drilling. It would have to decide whether its mission would be better served by (1) continuing its complete opposition to drilling, or (2) permitting some form of drilling (regulated so as to be as environmentally friendly as possible) and using the huge profits generated thereby to achieve other worthy ends (e.g., buying up environmentally valuable property that its members might actually visit someday). What would it do?

Well, let’s look at what it has done when it’s actually owned the property it’s tried to control. Since the 1950s, the Audubon Society has permitted limited drilling on its own Paul J. Rainey Sanctuary, a 26,000-acre preserve in Louisiana. This drilling — accomplished using 37 wells designed to minimize environmental impact — has netted more than $25 million for the Society. The Society, then, has been able to use those revenues to pursue other preservation goals. Unfortunately, they’ve spent much more of it on lobbying and P.R. than on purchasing land for preservation. The point, though, is that people take very different positions on resource usage when they must bear the costs and benefits of their positions — and the decisions they make are much more likely to be welfare-enhancing.

So is there reason to oppose the Bush plan to sell off parcels of isolated public forest land? Not on grounds that privatization is bad. Indeed, privatization is the best way to ensure that the parcels at issue end up being put to their highest and best uses — which may be conservation. The problem with the Bush plan is that the revenues generated from land sales will be used to feed the habit of a government that’s addicted to spending. If the land sales result in even less fiscal discipline, that would be bad. But privatization’s not the problem.