Rules for (Today’s) Radicals: Ostrom’s lessons for the next era of environmental policy

By Megan E. Jenkins

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Next week President-elect Joe Biden will be sworn in as the 46th president of the United States. Biden and his team plan to take bold action to address climate change and other environmental challenges. Those plans include stricter limits on pollution, federal incentives for clean energy, and higher fuel economy standards. He’s also discussed a commitment to preserving 30 percent of America’s land and water by 2030. For reference, about 12 percent of land in the U.S. is currently protected as state and national parks, wilderness areas, permanent conservation easements, and other protected areas.

Another ambitious goal from the Biden campaign is a commitment to 100 percent clean energy and net-zero emissions by 2050. That’s a big promise. The Energy Information Administration provides data on electricity generation by source. In 2019 the U.S. produced over 62 percent of its total electricity from fossil fuels (mostly from natural gas and coal). About 20 percent came from nuclear and 18 percent from renewables, including wind, hydropower, solar, and biomass. Shifting the entire economy to renewable energy and achieving net-zero emissions by 2050 will be a huge undertaking. And how we move in that direction matters a great deal.

To improve their chances of a successful environmental agenda, the Biden administration should follow the advice of Nobel Prize-winning economist Elinor Ostrom. She argued that although one-size-fits-all solutions are tempting, policymakers should avoid them. In her book Governing the Commons, Ostrom stated, “Instead of there being a single solution to a single problem, I argue that many solutions exist to cope with many different problems.” Public policies often select one blanket solution to a complex problem. But blanket solutions don’t work well in diverse situations. They also make it harder to discover the many creative solutions that might work better.

Elinor Ostrom dedicated her research to understanding how individuals, communities, and governments create rules to govern the resources they hold in common. Those resources include fisheries, forests, pastures, and even air. In his 2017 book Elinor Ostrom’s Rules for Radicals, Professor Derek Wall argues that Ostrom’s work lays an important foundation for green politics today. Wall draws out the 13 “rules” from Ostrom’s work that he feels are most important to consider when making environmental policy decisions. While each of Wall’s 13 rules is worth thinking about in-depth, I have chosen 3 of Ostrom’s core ideas that provide insights for the next four years of environmental policy and beyond.

Institutions (and incentives) matter

It’s no mistake that “think about institutions” is first on Professor Wall’s list. Institutions are the rules, norms, and structures we create to govern our communities. Ostrom built on the work of economists before her by studying how groups develop institutions to manage natural resources. She found that institutions vary depending on the circumstances of time and place. Rules that work well to manage lobster harvests in Maine might not work for managing salmon fisheries in Washington.

When we get poor environmental outcomes, Ostrom would tell us to look at the institutions working behind the scenes. How are the rules of the games impacting individual decision-making? Are these rules pushing people towards conflict to get their preferred outcome at the expense of someone else? Or are they allowing for mutually beneficial cooperation?

An examination of public efforts to preserve endangered species in the US illustrates how important good institutions are for getting good environmental outcomes. The Endangered Species Act is the flagship law that protects threatened and endangered species in the US. Policymakers crafted the law with the best of intentions. But it has also resulted in unintended consequences. Landowners that find an endangered species on their land may worry that their ability to use their land will be limited. As a result, private landowners have been known to “shoot, shovel, and shut up.” In other words — landowners in many cases face a strong incentive to exterminate or drive away endangered species on their land, pretend they were never there, and make sure wildlife managers never find out.

My research on endangered species suggests that landowners actually want to be good stewards of the environment. The vast majority report wanting to help endangered species recover. Then how can we better align incentives so that private landowners are helping species rather than harming them?

Incentives seem to work better than punishment for getting landowners involved in conservation. Programs like Safe Harbor Agreements provide assurance against future regulation if landowners agree to make their land more hospitable to endangered species. Others like the Conservation Reserve Program provide cash payments to landowners who take farmland out of production to provide valuable habitat for wildlife. Private groups have created funds to reimburse ranchers for wildlife lost to wolves, helping to reduce conflict between conservation and ranching communities.

The first key lesson from Ostrom is to think about the incentives that our institutions create. The Biden Administration should keep incentives in mind as they work to ramp up an ambitious plan to preserve wildlife and address climate change.

Listen to (and involve) the people

One of the hallmarks of Elinor Ostrom’s work was her willingness to do on-the-ground research involving real people. Ostrom wasn’t content to base her work solely on theory or the observations of others. Instead, she talked to real people in the real world. She wanted to understand the diverse natural resource problems they faced and how they solved those problems. Ostrom recognized Austrian economist Friedrich Hayek’s insight that knowledge is dispersed throughout society. No one person can have all the information needed to make the optimal decision about a complex governance issue.

Successfully conserving endangered species, for example, requires the involvement of many different stakeholders. The majority of endangered species rely on private land for their habitat. That means private landowners must be treated as key conservation partners if we are to get good conservation outcomes.

Endangered species also rely on federal and state public lands. And because wildlife doesn’t respect the boundaries of private vs. federal vs. state-owned land, that means these different groups must work together.

The Sage Grouse Initiative (SGI) provides an encouraging example of what can happen when different stakeholders come together. The SGI was created in 2010 by the USDA’s Natural Resources Conservation Service. The group relies on state and local partners working together to conserve habitat for the greater sage grouse. The SGI reports partnering with 1,856 ranchers to conserve over 7 million acres of sage grouse habitat in 11 western states.

For federal conservation policies to succeed, listening to (and working with) the people on the ground will be key.

Embrace complexity and let many flowers bloom

One of Ostrom’s most important insights was that panaceas do not work. No matter how elegant or well-designed, one-size-fits-all solutions can’t address the wide diversity of environmental problems facing us. Ostrom also argued that we don’t have to choose between purely private solutions like property rights and purely public solutions like top-down regulation. Instead, we have to find the magic mixture that works best for a particular problem.

One example of a panacea in environmental policy is government support for wind and solar energy technologies. That support has come from federal subsidies and tax credits as well as state programs designed to boost renewables. Increasing renewable energy production is worthwhile in our fight against climate change, but the scale and complexity of the problem mean we will need more than two technologies to do so. Technologies like nuclear energy can provide zero-emission energy that is scalable and doesn’t depend on the sun shining or the wind blowing. Advanced geothermal technology may also be a promising means of producing energy from the heat in the earth.

When it comes to climate change, we will need many innovative solutions dreamed up by thoughtful people across the country and across the world. It’s tempting to look for one beautifully crafted technocratic solution. Instead, we should embrace complexity and look for the best ideas — no matter where they come from. We must also have the humility to admit that the best and brightest ideas may be yet to be discovered.

Although it’s tempting to grasp onto one-size-fits-all solutions that promise to fix all our environmental woes, such solutions tend to disappoint in reality. The Biden Administration should embrace Ostrom’s key lessons by getting the incentives right, listening to the people, and embracing the messiness of creative complexity over the false promises of panaceas.

CGO scholars and fellows frequently comment on a variety of topics for the popular press. The views expressed therein are those of the authors and do not necessarily reflect the views of the Center for Growth and Opportunity or the views of Utah State University.