The pursuit of profit in the free market is often cited as the main cause of environmental disasters and poor environmental quality, leading to a lot of blame placed on entrepreneurs.
Their greed and ignorance of social costs is supposedly the cause of deteriorating air quality and the environment.
However, it is not really set in stone that entrepreneurs, motivated by profit, devastate the environment. Indeed, the pursuit of profit can actually protect the environment.
Change starts from the bottom
Many people believe that we only have two options in managing natural resources. One of them is to leave rivers, lakes, or meadows to the state, which will manage these resources from the position of central authority.
The second option is to transfer these assets into the hands of individuals or private companies, i.e. to privatize nature.
But the world is not black and white, and it is no different in this case. The alternative to both of the above-mentioned procedures rests on the solid foundations of decentralization.
It is on the decentralized management of natural resources that the model of “community-based natural resource management” (CBNRM) is based on. In this case, ownership of natural resources is transferred to local communities, who dispose of the property as they see fit.
Since CBNRM is most prevalent in underdeveloped countries, these assets are exploited by communities for enrichment and profit. So the primary goal is not to protect the environment, but only to feed yourself and your loved ones and get out of poverty. However, local communities quite often do not have the necessary knowledge and tools to effectively commercialize their assets, and this is where the private sector comes into play.
As it is entrepreneurs and companies that will provide communities with the remaining pieces of the puzzle and help turn natural resource management into a profitable business. Both parties are trying to achieve profit in the long term, and this is also reflected in their behavior towards the environment.
There is no mass culling of wildlife herds, burning of forests, or discharge of toxic waste into water sources. Indeed, if natural resources were to be excessively consumed in this way, they could hardly be used in the long term for the sale of hunting permits, tourism, or the timber trade.
Wildlife free market in Africa
The CBNRM model is used effectively by the African Wildlife Foundation, a non-profit organization that acts as a mediator between African communities and their potential private sector partners. AWF operates in 14 countries in sub-Saharan Africa, and its work has improved the condition of the environment on nearly 200,000 acres across Africa.
Examples of successful AWF projects include the Khwai Development Trust in Botswana, a company that makes money from the sale of hunting permits, or the Namibian Torra Conservancy, which also trades in hunting permits and runs tourism initiatives.
At first glance, it might seem that the sale of hunting permits is not exactly twice as beneficial for nature, but thanks to the fact that permits are sold in limited numbers, entire herds are not exterminated. Entrepreneurs are motivated to maintain the entire herd at a stable number of animals so that they can profit from the sale of hunting permits in the long term.
The AWF itself states six main factors as the main conditions for the success of cooperation between local communities and private companies:
1. A specific strategic plan – a different commercial activity is suitable for each region. Just because selling hunting licenses is successful in Botswana does not mean it will be profitable in Congo.
2. Functioning local institutions – strong institutions are one of the conditions for economic growth and the efficient functioning of the economy in general, and it is no different in this case as well.
3. The right private sector partner – it is crucial for a successful collaboration that private sector partners are carefully selected. (In this case AWF comes to the scene, as a quality controller)
4. Benefits for the community – cooperation must pay off, the community will only run it if it makes a profit.
5. Profitability for entrepreneurs – it is no different for the other party, who also expects profit from this cooperation.
6. Transparency and adherence to contracts – for any successful collaboration, it is crucial that both parties adhere to the agreed contract, which must be enforceable where appropriate.
Solutions for the entire political spectrum
Whether you are a conservative, a socialist, or a libertarian, there is little room for objections to community-based natural resource management.
Conservatives should like CBNRM because it is essentially a return to the roots, where individual communities managed their own adjacent rivers, lakes and forests. Socialists, on the other hand, must certainly sympathize with the sharing of natural resources between the inhabitants of individual communes. Meanwhile, libertarians are simply happy that the free market has once again shown how problems can be solved without the state.
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A version of this article was originally published in Czech on the Students For Liberty CZ website.
This piece solely expresses the opinion of the author and not necessarily the organization as a whole. Students For Liberty is committed to facilitating a broad dialogue for liberty, representing a variety of opinions.