In a previous column I asked, “What should we do about ecologically valuable areas that are also rich in energy resources? At current prices, these areas act like huge electromagnets, attracting evermore attention.” Montana's Rocky Mountain Front for example, contains oil and gas deposits. It is also excellent grizzly habitat, a place where they can roam between high plains, grasslands, and mountain forests. Here, potentially, environmental quality and energy development can coexist. However, to accomplish this, we need creative ideas and courageous leadership.

We can use the political process to protect these lands. This has been the strategy of the modern environmental movement for 35 years and it has yielded some impressive results. For example, I can’t imagine the market protecting landscapes on the scale of, say, the Bob Marshall Wilderness.

Here’s the danger I see with this approach. Politicians are rewarded when they advance policies that produce immediate benefits to their constituents, while spreading costs to others in the future. In a world of cheap energy, the opportunities forgone by restricting energy exploitation on large areas of federal land (such as the Outer Continental Shelf (OCS)) were relatively low. (Some 85 percent of the OCS is still off limits.)

But political protection can be fleeting. Recall that during the October 16, 1973 OPEC oil embargo, the proposed Alaskan pipeline had been bottled up in congressional debate for over a decade. After the embargo hit, pipeline authorization passed within a week, without constraints by “further administrative or judicial delay or impediment.” This is an important lesson in the limits of the purely political approach.

FREE’s social entrepreneurship program explores the creation of new institutions and innovative policies that promote environmental quality and social progress. Financially motivated entrepreneurs, e.g., FedEx, receive wide attention. But not-for-profit entrepreneurs like the Nature Conservancy and Ducks Unlimited offer some of the best thinking and practices for conservation in the West. How might we apply this model of conservation to the Rocky Mountain Front?

In 2001, FREE sponsored a competition seeking “proposals exploring alternative institutional arrangements for the protection of the Wild and Scenic portion of the Missouri River.” The winner recommended the creation of a Missouri River Corridor Trust, whose twelve trustees would come equally from three constituent groups: local residents; “interested persons regionally and nationally;” and federal, state, county, and tribal governments.

The idea of using trusts to manage important natural resources is not an academic exercise. In 2002, the Evergreen Forest Trust in Seattle entered into an agreement with the wood-products company Weyerhaeuser to purchase approximately 100,000 acres of forestland in the Cascade foothills. According to the Seattle Times:

“[D]evelopment would be prohibited on all 100,000 acres through a conservation easement. Management of about 20,000 acres would be turned over to the Cascade Land Conservancy. ... [L]ogging on 10,000 acres [of] “the most critical ecological lands” would be prohibited unless deemed environmentally beneficial. Logging also would be limited on lands visible from the Snoqualmie Valley. Another 10,000 acres along streams would be protected in buffers that would be both wider and more restrictive than state logging regulations require. The remainder of the forest would be managed for timber production.”

All trusts would, to varying extents, have to generate revenues to support their conservation efforts. This forces a balancing of the tradeoffs between land use and preservation. By purchasing the land at fair market value, the trust faced the opportunity cost of keeping it undeveloped.

It’s easy for the Greens to yell “NO!” to energy exploration when they gain nothing from its development, but can raise funds fighting it. However, if these organizations gained control over the energy royalties, their incentives change dramatically. The economics supporting this is straightforward—when an organization owns a resource, it can place environmental standards at any level, e.g., “to minimize impact, all exploration must be from helium balloons,” but they face the costs of such silliness.

There is an optimal amount of care. But, only when people face the consequences of their actions do they have incentives to find it. Merging development with preservation of natural ecosystems requires new institutional arrangements that reflect our changing environmental and economic knowledge and standards.