GALLATIN GATEWAY, MONT.-- Last week, 17 federal judges gathered at the Gallatin Gateway Inn. This inn, the last of its kind, was built by the Milwaukee and St. Paul Railroad to attract tourists en route to Yellowstone National Park. The judges met to hear policy analysts explain a new environmentalism.

Gallatin Gateway is a perfect setting for meetings. It's on the geographic margins between Yellowstone National Park and Montana's "Big Sky" country, and on the cultural margins between the new and the old West.

The lecturers were diverse, but a coherent new vision emerged from their training and their shared desire to protect the environment while respecting other values. The unifying theme was the rejection of top-down, command and control environmentalism. All favored more flexible, decentralized approaches. Guest lecturers came from academic institutions, such as the University of Maryland and Colorado College, and the private sector, like Battelle Institute and the Thoreau Institute.

The first speaker, Lynn Scarlett, Vice President for Research at the Reason Foundation and a Board Member at the Gallatin Institute, set the tone for the conference. She introduced a "new environmentalism". This new shade of green emphasizes the importance of incentives and the imperatives of dispersed information. The value of market coordination and decentralized decision making is critical to guiding environmental reform.

Ms. Scarlett led the judges through multiple cases of toxins and pollutants like NOXs, VOCs, and SO2. For that churning cauldron of sludge, she sees no grand "solutions" to environmental woes -- only trade-offs. The hundreds of pages in the 1990 Clean Air Act Amendments will not contain "the answer". Instead, she claimed, complex and confusing regulations contain the ingredients for error and confrontation.

She described a recent example where Adolph Coors Company in Golden, Colo. voluntarily conducted a self-audit of its environmental impact. The 17-month audit which cost Coors $1.5 million discovered previously unknown emissions in the brewing process. These emissions were not covered by environmental regulations but far exceeded all of the company's other emissions. When Coors disclosed this information as a step to obtain permits (which would have been required if environmental quality were the goal), the Colorado Department of Health and the Environment fined Coors more than $1 million for their troubles. The message of these incentives was perverse: don't be a good citizen -- hide, don't divulge.

This story tells us a lesson. Antagonistic environmental regulators stifle voluntary cooperation for environmental ends. Nearly half of the companies recently surveyed by Price Waterhouse expressed reluctance to conduct self-audits because they feared possible punishment. Slapping fines on firms that investigate their environmental impact, at their own expense and initiative, will effectively deter environmentally sound business practices. Poorly designed regulatory schemes thwart environmental gains.

Voluntary activities like Coors' clearly foster environmental quality. Since 1988, Coors has lightened its bottles, cans, and packing by 21% and reduced its contribution to landfills by 850,000 tons. In 1994 alone, Coors re-used 964,359 tons of packaging materials. And they saved money in the process. As the President's Council on Sustainable Development recently reported, "Pollution is waste, waste is inefficient, and inefficiency is expensive."

Coors' environmental innovations came in spite of the punitive orientation of state and federal agencies. Lynn Scarlett reminds us of the critical importance of incentive compatible environmental enforcement. Coors' observation that "voluntary initiatives are more effective than mandated actions because they create flexible solutions, foster innovation and promote collaboration rather than adversarial relationships" merits the close attention of reformers.

Another speaker at the conference, Felix Romero, told a compelling story about old values of the West. His story takes us just down the road from Golden, Colo. to a small village of San Luis, Colo. A Spanish land grant dating from the Mexican-American war settlement of 1848, the community owned the valley land in common until the Taylor Ranch cleared title for the land in the 1970s. With the loss of community property, San Luis' livelihood is threatened by ecological degradation upstream on the Taylor Ranch and by the increasing pressures on what little land they retain. To remedy this, the La Sierra Foundation of San Luis is attempting to buy the ranch and return property rights to the community.

The new West is one of protected spotted owls, subdivisions, and clashing values. Each of these forces combine to threaten the rich heritage of Mr. Romero's community. A strong and sustainable future demands that our "new environmentalism" finds a place for their traditions and practices. The alternative is subdivided ecosystems, clearcut mountainsides, and dislocated farmers.

The conference brought disparate yet coherent voices to federal judges concerned with environmental values and legal traditions. The speakers advocated a new paradigm, a different shade of green. They emphasized property rights, market processes, and responsible liberty as key components of an effective environmentalism.

The judges realize that their role is to interpret the law, not to champion innovative policy changes. They recognize the need for political entrepreneurs, people with the intellects and statures of U.S. Sens. like Kit Bond or Bill Bradley. Such leaders can encourage opportunities for harmonizing our environmental and economic goals. They would find great support from the many Americans who value environmental quality, responsible liberty, and modest prosperity.