Wednesday, December 10, 2008

Orca Whales and Old Growth - Case Studies in Market Failures

In the Pacific Northwest, where I live, we have a long history of consuming natural resources in the name of economic development in ways that negatively impact the public good.

One of the casualties of the consumptive nature of our society is the war that was waged over old growth trees. In simple terms, the Old Growth lost.

When I was growing up in the 60s, a trip from Portland to the Coast took you through huge tracts of forestland, with towering trees. The drive always felt a little wild and dangerous, especially because of the huge number of logging trucks, carrying mammoth trees from forest to mill.

Today, that same drive takes you through suburban sprawl and tree farms, full of short slender trees, all of the same pedigree.

For a time, there were huge battles over Old Growth Trees, the centuries-old tree stands that provide enormous biodiversity. The argument for cutting the last of Old Growth went something like this: Jobs will be lost if we don't cut them down. Let's cut them down.

As a child, I couldn't understand how, if we were down to the last 5% of Old Growth Trees, there could be any sane argument for continuing the carnage. Surely, it wouldn't make a long-term difference to stop at 95% destruction instead of 100%.

To the mill owners and loggers, any suggestion that we stop short of cutting down all the Old Growth trees was an attack on their livelihood. Never mind the longer-term consequences of eliminating a natural resource that offered much greater benefits to society at large if protected.

What no one seemed to understand is that the loggers and mill owners were of course only going to look after their short-term economic interests. They weren't going to focus on what was going to happen after the Old Growth Trees were all gone because that would be a different battle - and the only battle they could focus on was the one they were engaged in every day to just keep cutting and keep the mills open.

That's the nature of capitalism here in the U.S. We have no concept of the long view and few effective ways to manage resources that will be consumed if business interests are left unchecked.

In the San Juan Islands, where I live part-time, the Southern Resident Orca Whales who frequent the islands each Spring and Summer, are in a fight for their very survival. They're starving. And yet, in some sense, the whales are subject to the same consumptive behavior that destroyed the Old Growth.

For 12 or more hours a day, the whales are chased by whale watching boats. Until recently, there were no laws preventing whale watching boats from chasing them at very close distance. You'd think that the whale watch operators would look at the whales as a resource that needs to be protected over the long term. But what actually happens is that the whale watch operators act like mill owners - it's in their economic self-interest to chase the whales, and the fact that the whales are dying doesn't change the whale watching boat owners' behavior. For a while, they claimed they could be self-regulating, but they were lying to themselves and to everyone else. As a group, the whale watch operators protected their own - not once did they ever turn in one of their own for violating the whale watching guielines. In fact, their own marketing brochures would show them with boats perched right on top of the whales even while they claimed to regulators that they voluntarily complied with guidelines that said boats shouldn't approach closer than 100 yards.

Very recently, because the Southern Resident Orcas were officially listed as an Endangered Species, new laws went into effect requiring all boats to stay more than a hundred yards away. But the laws have few teeth, and enforcement is practically nonexistent. Moreover, the damage that's already been done is likely irreversible. This year alone, almost 10% of the remaining whales died and they are slipping below the tipping point where they can replenish their population.

The whale watch operators will argue that they're not the only cause behind the demise of the Southern Residents. And they're right - toxins and and food shortages are also playing a role. But what's interesting is that in the face of almost certain extinction of the species that is critical to their livelihood, no one from the whale watching industry stepped forward to say, "The fact that we're hounding the whales may not be the ONLY threat to the whales, but because they're facing a critical tipping point, we need to be conservative and assume that the noise from our boats (which sounds like a pack of Harleys underwater) is causing the whales harm. We will voluntarily back off for a period of time to give the whales time to recover."

The only thing that could have stopped the whale watch operators' destructive behavior earlier was public pressure and regulation. But the whale watch operators were effective lobbyists and worked hard to keep any restrictions on their behavior from becoming law. Not until the regulations were in the pipeline and almost certain to be adopted did they claim to have been in support of them the whole time.

This is a clear case where capitalism failed and government couldn't keep up. The loss of the whales will cause the whale watch operators' business to disappear. The whale watch operators will sell their boats and move on to some other business. And future generations will never get a chance to see and hear the magic of the whales feeding off the shores of San Juan Island.

No comments: