EFN Asia 48: Report on "Free Market Environmentalism"

Last week,  Economic Freedom Network (EFN) Asia and Friedrich  Naumann Foundation for Freedom (FNF) participated at the Jeju Forum for Peace and Prosperity 2015, with its own session about free market environmentalism, held  last May 21 afternoon.

Welcoming Remarks were given by Rolf Mafael, German Ambassdor to S. Korea, and Siegfried Herzog (speaking in this photo), FNF Regional Director for Southeast and East Asia, based in Bangkok, Thailand.

Session speaker was Dr. Oyun Sanjaasuren, President of the UN Environmental Assembly; Former Minister, Mongolia’s Ministry of Environment and Green Development.

Panelists were:

(a) Henning Hoene, Member of Parliament, North Rhine-Westphalia; Spokesperson for Climate & Environmental Protection, Nature Conservation and Consumer Protection,

(b) Sunil Rasaily, Founding Partner, QED Consulting Group, Bhutan; and

(c) Dr Yun Sangho, Research Fellow, Division of Public Policy Research, Korea Economic Research Institute (KERI).

Moderator was Matthias Grabner of the Austrian Chamber of Commerce in S. Korea.

Photo below, from left: Sungho (hidden), Rasaily, Hoene, Sanjaasuren, and Grabner.

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Rapporteur’s Report

by Miklos Romandy, FNF Southeast and East Asia office, Bangkok

Session 4-C: “Free Market and Environmentalism: Why They Should Love Each Other”

- The world population stands at about 7 billion today. The UN predicts that by mid-century it will have grown to more than 9 billion. This will lead to an immeasurable growth in resource consumption and put significant pressure on the planet. If this trend continues then “business as usual” has to be changed in order to sustain further growth.

- The Asia-Pacific region consumes more than 50% of the world’s resources and is responsible for more than 50% of world-wide emissions.

- It is important to keep in mind that pollution “knows no boundaries”. Therefore, environmental protection has to be viewed as a global concern that can only be achieved through international cooperation, using the most efficient means.

- Keywords: resource consumption, pollution, environmental protection, cooperation,

 (Policy Suggestion & Lessons)

- The role of governance (e.g. through regulations or incentives) is very important in succeeding to protect the environment and bring about sustainable development. But lasting success can only be achieved if businesses embrace sustainable practices. This is where free market practices come in. A good example is the European Union Emission Trading Scheme because it is an incentive for businesses to be more efficient and clean.

- To achieve environmental protection solely through regulatory means can be problematic, for example in developing countries where extractive businesses (e.g. mining) are often state-owned. This leads to the government’s being both a regulator and an operator (through ownership) and therefore to a conflict of interest.

- Environmental protection can therefore be better achieved by a market-based approach, meaning that businesses should be given the incentive to regulate themselves. Market forces compel businesses to become more efficient and less wasteful. This argument is supported by a recent study by the Heritage Foundation which shows the clear correlation between economic freedom and environmental protection. Economically free countries perform better when it comes to environmental protection.

- Market-based approaches to environmental protection should be supplemented by regulatory measures only where it is necessary for governments to step in.

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Below, from left:  ???, Lars-Andre Richter, FNF Country Director for S. Korea, Sungho, Pett Jarupaiboon, EFN Asia Program Manager in Bangkok, Sanjaasuren, Ms. Kim of FNF-Korea, Hoene, Rasaily, Herzog, Grabner, and Miklos Romandy.

Thanks to Pett for sending me the report. All photos here are from the FNF regional office's facebook page. The Rapporteur's Reports in the past two EFN Asia sessions are here:

Jeju Forum 2013: Dealing with Economic Nationalism, June 03, 2013 
Jeju Forum 2014: Globalization and Inequality, Jeju Forum 2014, June 02, 2014

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See also:

EFN Asia 44: Day 2 of Conference 2014, November 10, 2014 

EFN Asia 45: Growth, Inequality and the Philippines, November 14, 2014

EFN Asia 46: A Young Korean's Reflections of Conference 2014 in Hong Kong, February 10, 2015 
EFN Asia 47, Participation in Jeju Forum 2015, May 08, 2015

EFN Asia 47: Participation in Jeju Forum 2015

The Economic Freedom Network (EFN) Asia and the Friedrich Naumann Foundation for Freedom (FNF) will participate once again in the big annual international conference in Korea, the (10th) Jeju Forum for Peace and Prosperity, May 20-22, 2015.

Although Jeju Forum was first organized in 2001, EFN Asia participated for the first time only in 2013 by having its own panel discussion, "Dealing with Economic Nationalism". I was part of the contingent, as Panel Rapporteur. Then EFN participated again last year, its panel discussion was about "Globalization and Inequality".

This year, the overall conference theme will be "Towards a New Asia of Trust and Harmony" and EFN's panel discussion will be on "Free Market and Environmentalism: Why They Should Love Each Other".

As the title suggests, the EFN session will look into ideas and movements that have promoted free market principles and schemes as the best way to conserve the environment.  Free market environmentalism can be a good way to address environmental degradation rather than direct government involvement. How?

Via clear property rights delineation and protection, which mitigates the ‘tragedy of the commons’ problem. A poor villager enters a non-guarded public forest land and cuts trees, big and small, that he can haul and transport. The land and the trees in it belong to everyone and no one in particular, so if he does not cut and get those trees today, someone else will cut them tomorrow or next week. And that is how many public forest lands in developing countries with weak rule of law and property rights protection, become bald and degraded.

The "meat" of Jeju Forum is the many simultaneous panel discussions that participants can choose to attend. Normally about six different topics are discussed, same time at six different discussion or meeting rooms.  The EFN panel will be on May 21, 3:40-5 pm.

The Panel Moderator will be Matthias Grabner of the Austrian Chamber of Commerce in S. Korea. Welcoming Remarks will be given by Rolf Mafael, German Ambassdor to S. Korea, and Siegfried Herzog, FNF Regional Director for Southeast and East Asia.

Keynote speech will be given by Dr. Oyun Sanjaasuren, President of the UN Environmental Assembly; Former Minister, Mongolia’s Ministry of Environment and Green Development; and currently the Chairperson of the Council of Asian Liberals and Democrats (CALD).

The panelists will be

(a) Henning Hoene, Member of Parliament, North Rhine-Westphalia; Spokesperson for Climate & Environmental Protection, Nature Conservation and Consumer Protection,

(b) Sunil Rasaily, Founding Partner, QED Consulting Group, Bhutan; and

(c) Dr Yun Sangho, Research Fellow, Division of Public Policy Research, Korea Economic Research Institute (KERI).

The panel Rapporteur will be Miklos Romandy, Regional Programme Coordinator for FNF Southeast and East Asia.

There are plenary sessions with some big name speakers, usually former heads of states. The following are among the plenary speakers, including luncheon or dinner speakers.

This year is the 70th anniversary of the end of World War 2. People now are busy talking about trade and investments, jobs and entrepreneurship, tourism and cultural exchanges, mobile phones and  other gadgets, and so on. Wars and invasion of other countries or territories are far out from their minds. Only current dictators, would-be-dictators, and lovers of more government coercion are talking about wars and invasions.

Peace and Prosperity. Around the world.

They are noble goals that responsible governments, industrious people and useful civil society organizations like EFN Asia and FNF  should continue to assert. The Jeju Forum is a good platform for such useful and productive discussions. I am happy that EFN continues its participation in this important annual international conference.
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See also:
EFN Asia 22: Dealing with Ecgeonomic Nationalism, Jeju Forum, June 03, 2013 
EFN Asia 23: More Photos at Jeju Forum, June 06, 2013
EFN Asia 37: Jeju Forum 2014, On Globalization and Inequality, May 29, 2014 
EFN Asia 38: Report on Globalization and Inequality, Jeju Forum 2014, June 02, 2014
EFN Asia 46: A Young Korean's Reflections of Conference 2014 in Hong Kong, February 10, 2015

Free Market Environmentalism

I have always believed in this type of environmentalism -- individuals, private enterprises, civil society initiative in environmental conservation with returns to their investments and effort.

I started planting trees in a private farm owned by the family of a deceased friend in UP, Mil Millora, in 1992. It was limited planting, something like 300 seedlings I think, various species of mahogany, acacia auri, acacia mangium, eucalyptus deglupta, and agoho/Benguet pine. I liked the experience of tree planting in a private farm, not in a public land that is owned by everyone and no one in particular, through the government. The farm is in Brgy. Laguit Padilla, Bugallon, Pangasinan. The town is 198 kms. from Manila and the farm is about 7 kms from the town center. At that time it was all dirt road.

The caretaker of the farm, Nong Endring Paragas and his two sons, helped me in the various tree planting every year. By 1993-1995, we were planting thousands of seedlings, we bought from nearby private nurseries, or we uproot naturally-growing seedlings of mahogany that were too close to each other and plant them elsewhere.

By 2002, we started limited harvesting of trees, those that grew fast from the seedlings we planted a decade before that, or trees that naturally grew on their own. I built my first treehouse that year. Two years after, early 2004, we demolished that small treehouse and built a bigger, two-storey, all wood treehouse.More trees were harvested from the farm.

We started selling a few trees for lumber early this decade as we have lots of big trees then. The small revenues were used to pay the monthly salary of the farm caretaker. Commercial harvesting was made in January this year. See here, Selective Logging in the Farm. Even after the selective logging, many trees, from small to medium size to big but crooked trunks were still standing. From February up to this month, we were selling lumber to local buyers, mostly barangay residents who were repairing their old house, or building a new one. Since we got official permit to cut from the Department of Environment and Natural Resources (DENR) provincial office, there was no intrigue or harassment in the cutting of trees. The revenues were enough to pay the monthly salary of the caretaker and his son, Danny, who works part time in the farm to help his ageing father.

It is a perpetual forest with perpetual revenues, though not substantial.

Stealing and illegal cutting of trees in the public forest land is common there, and even in private farms if these are not guarded. Well, in many parts and provinces of the country actually. The thieves would cut trees for firewood, charcoal, or lumber for their house, or they sell the trees to other people. The daily presence of our caretaker in the farm turns away those thieves.

I tell some friends who are involved in various tree planting activities that they better do it in private lands and farms, not in government lands. Public forest land suffers from the "tragedy of the commons", where the land and the trees in it are owned by everyone and no one in particular, well owned by the government in the name of the public.  Survival rate of seedlings to become big trees someday is almost zero. One or more weeks after the tree planting, nature takes its course -- vines choking the new seedlings, cogon and grasses that grow much faster than the seedlings; wild animals or cattle that step on newly planted seedlings; flash flood in rainy season that erode the topsoil; grass fire and forest fire during the dry season. If the seedlings survive all of these and they manage to grow tall to arms- or limbs-size, people who cut and steal trees as discussed above come in.

Thus, in most tree planting activities in public lands, it is 99 percent tree planting, 1 percent monitoring, if ever. Good for picture taking then posting in facebook. Tree planting, not tree growing.

In private lands where the owners or managers have private stake, it is the reverse; 1 percent tree planting and 99 percent monitoring; when some of those seedlings die for whatever reason/s, they are replaced. Until the seedlings become small trees, become big trees. Whether to harvest them later or retain them to grow even bigger and taller is another story.

The various reforestation programs of the government in public forest land is generally wasteful. I remember when I was working at the House of Representatives from 1991-1999, I was attending various Committee hearings and accounting for the millions of hectares supposedly reforested from hundreds of millions of dollars of loans from the ADB, WB, OECF/Japan and other foreign aid. Loans contracted in the late 80s, and the result were largely lousy. Lots of spending and government borrowings, yes. Lots of new forest, no.

And it did not stop there. New environmental and forestry loans were contracted in the 90s, in the 2000s until this decade, by the Philippine government from the same foreign aid bodies, and very little new forests are visible.

In the public forest land adjacent to our farm in Bugallon, there are tree planting activities there, yearly. And yearly, public funds are used, and no new forest can be seen from the public land. Either the reforestation money is wasted or stolen, or no efficient monitoring is done. Government reforestation is largely wasteful and inefficient, if not a milking cow for various implementers, from the government to the contracted parties, usually NGOs and farmers' cooperatives.

Ok, I may be harsh in my assessment above, but that is what I have observed for more than two decades now.

On another note, there is an International Free Market Environmentalism conference to be held in Georgia this coming July 23-26, 2014. Venue is Hotel Vera Palace, Bakuriani, Mountain Resort, Georgia. Bakuriani is about 2 1/2 hours by car from the capital, Tbilisi.

The conference organizer is the New Economic School (NES). The President of NES–Georgia, Paata Sheshelidze, is a friend way back in 2004, when we attended the Economic Freedom Network (EFN) Asia conference in Hong Kong, sponsored by the Friedrich Naumann Foundation (FNF). 

The conference co-sponsores are  FNF Southern Caucasus, Germany, and the Center for Energy and Environment of Competitive Enterprise Institute (CEI), USA. Interested participants can write to: office@nesgeorgia.org. 

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See also:
Agri Econ 7: Bt Eggplants vs Environmentalism, December 20, 2010
Agri Econ 12: Presentation at WASWAC-BSWM Seminar, May 13, 2014
Climate Tricks 31: High Intolerance by the Alarmist Camp, May 14, 2014