Environmentalists in Business Suits

Editor’s Note: This article is only one example of how private incentives can lead to an end result that is far more environmentally beneficial than bureaucratically derived solutions. The fate of the African Rhino was all but sealed, at least until the potential of the Rhino as a legitimate game animal was realized. Many may have a problem with the idea of hunting any animal, but the sport killing of individual Rhinos has saved the species. Hunters may be killers, but they are also conservationists, and they have accomplished what was previously thought to be nearly impossible, the rescue of a species on the brink of extinction. Read on…

The zebra cautiously approached the water hole, unaware of the danger perched in the tree above. Though African animals are conditioned by predators to be cautious, in this case the predator was well camouflaged. When the zebra lowered his head to drink, the archer, stiff from hours sitting patiently in the tree stand, drew his bow and launched the razor-sharp arrow. Instantly, the zebra fell to the ground, as the arrow found its mark, severing the zebra’s spinal cord. The meat would become dog food because humans generally find it unpalatable, but the tanned zebra skin would decorate the floor of the hunter’s trophy room.

To the non-hunter this crass “slaughter” of a magnificent African animal for pure human pleasure engenders feelings of disgust and anger. Sport hunting is seen as the epitome of anthropocentric resource use. In this view, the killing of the animal serves no other purpose than to boost the ego of the hunter. Killing for meat might be rationalized, but killing strictly for pleasure cannot. Accordingly, anti-hunting forces believe that laws should stop or at least limit hunting and ban trade in wild animals or their by-products.

Those who hold this position, however, do not appreciate the important role that markets can play in preserving wildlife species and their habitat. The rest of the zebra story reveals the role of the hunter, the entrepreneur, and profits in South African game preservation. Angus Brown, professional hunter and guide, is an enviro-capitalist motivated both by his love of the bush and the living he can make by meeting the demands of hunters. In addition, his entrepreneurship benefits both wildlife and the landowner. Angus contracts with a landowner for exclusive hunting access on approximately 20,000 acres in the Transvaal province of South Africa. According to terms of the agreement, Angus provides meals, living accommodations and guide services for hunters while the landowner provides the habitat. The accommodations include beautiful African huts with walls woven from reeds and roofs thatched from grass. Horns from animals in the area adorn the walls and skins cover the floors. Food in the camp is typical South African fare highlighted with the wild meat killed by the hunters. Natural pans and developed water holes provide water for the animals in this arid land on the edge of the Kalahari Desert. At these water points, archery hunters wait for animals like the zebra to come for their daily drink.

All of these investments are possible only because hunters are willing to pay fees that make the venture profitable to the guide and the landowner. Perhaps more important is the strong link between hunting revenues and resource stewardship. The landowner gets a share of the daily guide fees paid by the customers and nearly two-thirds of the trophy fees paid for each animal.

The price list for the various animals available to hunters reads like a menu at a restaurant: Tsebe–$1500, Waterbuck–$1200, Zebra–$650, Kudu–$600, Warthog–$100, Impala–$80, etc. Angus and the landowner mutually agree on these prices which reflect the scarcity of the species. With warthogs and impala abundant, their prices are low; with tsebe and waterbuck scarce in the region, their prices are high. Such prices condition the demands of the hunter, who must carefully weigh his preferences against the prices. Indeed, Angus can also arrange hunting (elsewhere) for elephant or rhino, the two most scarce of the hunted species, at a price of $12,000 and $28,000, respectively.

The supply-side impacts of these incentives have been dramatic. In recent years the ranch was mainly a cattle operation, but the potential for hunting profits has changed this. Instead of carrying several hundred Brahma cattle, the land now supports approximately 500 impala, 200 kudu, 100 wildebeest, 50 tsebe, 25 waterbuck and numerous other species. Interior fences necessary for cattle management have been removed to give wildlife a freer range, and water trough are being converted to more natural water holes. Angus and the landowner consider ways to improve the habitat and increase the number of species.

Without the profits from hunting, less habitat would be available for the indigenous species of the Kalahari and fewer animals would survive. It is precisely this form of enviro-capitalism that has been successfully implemented in Africa to encourage elephant and rhino preservation.

Closer to home, Tom Bourland also knows that the market can be wildlife’s best friend. He should know. As head biologist on International Paper’s commercial forests in Texas, Louisiana, and Arkansas, he turned wildlife into an asset for the company. As an environmental entrepreneur, Tom Bourland changed the perspective of the company regarding wildlife by implementing a fee recreation program. His program charged sportsmen for hunting access and leased small tracts of land to individuals on which they can park their motor homes and enjoy the woods. After three years the company’s revenues from this program tripled to $2 million and profits were an impressive 25% of total profits. In Bourland’s words, “Because the status of wildlife affected the bottom line, the landowner bent over backwards to provide habitat for white-tailed deer, wild turkey, fox, squirrel, and bobwhite quail, as well as endangered bald eagles and red-cockaded woodpeckers.” This commercialization of wildlife has meant that more habitat is being preserved and wildlife are thriving where once they were considered a nuisance.

Enviro-capitalism is not a late twentieth-century phenomenon; even in the late nineteenth century, enviro-capitalists were at work. The not-well-known story of efforts to preserve Yellowstone reveals that it was the Northern Pacific Railroad that funded early expeditions to the region and lobbied Congress for legislation establishing Yellowstone as the world’s first national park in 1872. As one railroad official put it in the 1870s, “We do not want to see the Falls of the Yellowstone driving the looms of a cotton factory, or the great geysers boiling pork for some gigantic packing-house . . . .” Because it provided the main form of transportation to the region, the railroad could profit from preservation of this scenic wonder and therefore had an incentive to preserve the region. A similar story lies behind Glacier National Park with the Great Northern Railway, Grand Canyon National Park with the Santa Fe, and most other early western parks.

On a smaller, more private scale is the hundred-year history of the Huron Mountain Club on Michigan’s Upper Peninsula. The club was established on November 29, 1889 with 7,000 acres and $5,000 capital generated from the sale of member shares and annual dues initially set at $100 and $25, respectively. John Longyear, the club’s first president and a prosperous land dealer, steered the club through its first three years. He was a practical man who recognized that the “serenity of woods and lakes and fish-filled streams” were growing scarce. Therefore, they offered a profit opportunity. It was no coincidence that he owned the only means of transportation to the Huron area, a steamship, and several parcels of land near the Club’s boundaries.

Over the last seventy years, the Huron Mountain Club evolved from a hunting and fishing club to a secluded forest retreat complete with member-owned cabins. In the process, it has also become an important natural preserve for old-growth forests and rare fauna, containing one of a few large tracts (over 5,000 acres) of undisturbed maple-hemlock forests. The club has become an important natural area study for the University of Michigan and other scientific researchers.

Similar stories of enviro-capitalists abound. In 1927 R. E. Clanton purchased the Sea Lion Caves off the Oregon coast, opening it as a tourist attraction and providing a private sanctuary for Stellar sea lions. In 1935, Rosalie Edge raised $3,500 and purchased Hawk Mountain in Pennsylvania to prevent hunters from using the mountain top to shoot birds of prey. Recently, housing developer Peter O’Neill has created trout habitat within his River Run Housing Project in the middle of Boise, Idaho.

Frank Crisafulli mobilized the town of Glendive, Montana to collect paddlefish eggs from fishermen who harvest the fish from the Yellowstone River. Their effort to produce “caviar in cattle country” has raised thousands of dollars for community projects and generated much needed revenue to improve spawning habitat for this rare prehistoric fish. Commercial elk hunting on the White Mountain Apache Reservation in Arizona and elephant hunting on native communal lands in Zimbabwe are allowing indigenous populations to profit from wildlife, thus giving them the incentive to save habitat and species. And the list goes on.

In his book The Vital Few, Jonathan Hughes describes the entrepreneurs of the late nineteenth and early twentieth centuries who unleashed America’s industrial power. Names like Rockefeller, Vanderbilt, Carnegie, and Ford lead the list. In some cases these “vital few” invented new products or production techniques, but mostly they amassed capital, contracted with others, and developed marketing strategies that lowered the cost of products, making them more available to the masses and in the process increasing profits. In the 19th century and early twentieth centuries, these entrepreneurs were in the railroad, auto, and steel industries. Today they are more likely to be in building the information highway.

Having amassed their fortunes, today’s entrepreneurs, like those of the past, can provide philanthropic support for a variety of causes. In the case of the environment, they have a choice of funding enviro-capitalism, as described above, or the political environmentalism that dominates today’s agenda. Here, names like Jay D. Hair, who heads the National Wildlife Federation, and political figures such as George Frampton and Bruce Babbitt are held up as environmental entrepreneurs. Instead of business acumen, however, these people understand how to use political maneuvering and lobbying to accomplish their goals. All too often, their game is winner-takes-all, where environmental special interests gain at the expense of others. The tearing of the social fabric inherent in this political game is visible in the bitter debates over endangered species, clean water and air, and public land use.

The enviro-capitalism alternative, on the other hand, offers a win-win alternative. For example, a grant from the Northwest Area Foundation to the Oregon Water Trust allowed these enviro-capitalists to lease water from farmers in an effort to save critical salmon spawning habitat in Oregon. Hank Fischer of the Defenders of Wildlife has raised funds for his organization to compensate ranchers for livestock losses to wolves and to pay them for allowing wolves to raise litters on private property. Groups like the Rocky Mountain Elk Foundation purchase lands and easements to save habitat.

The world of enviro-capitalism is growing at the grassroots level where environmentalists are frustrated with bureaucratic actions that take a long time to implement and often generate mediocre results. Well-funded enviro-capitalists can effectively put their money where the species are and get the job done. Like traditional business entrepreneurs, they also must invent new products, attract venture capital, contract with resource owners, and market their products. The philanthropic sector can help by providing funds and by encouraging a legal and political setting where this entrepreneurial spirit can thrive. In this way the market system that has been so successful for industrialization can be unleashed to help solve environment problems.

About the Authors: Terry L. Anderson and Donald R. Leal are Senior Associates of PERC (the Property and Environment Research Center), 2048 Analysis Drive, Suite A, Bozeman, Montana 59718 (406-587-9591; fax: 406-586-7555). E-mail: perc@perc.org

This article was originally published in the Fall 1994 issue of Philanthropy, a publication of The Philanthropy Roundtable (Indianapolis, Indiana).

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