April 2001

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Private Conservation in Canada

by Miriam Bixby & Karina Wood

Earth Day (April 22nd) provides an opportunity for us to relish our environmental successes and to consider further opportunities for improvement. One achievement worthy of recognition in Canada is the development and growth of the non-profit environmental sector. Non-profit conservation groups are at least partially (and in some cases almost exclusively) funded by private donations.¹ Donations are used to rescue and restore wildlife and their habitat, encourage the rejuvenation of flora, protect and manage key marine and land-based reserves, and fund environmental research. The expansion of the non-profit environmental sector is exciting for two reasons. First, it challenges the widespread idea that environmental quality is something that only governments, not markets, can provide. Second, it gives individuals who care about the environment an opportunity to contribute to conservation projects that are of significant importance to them.

Private versus public environmental protection

From wildlife conservation to pollution control, legislation and regulations are often hailed as the "green" solution to society's environmental problems. Governments in Canada and around the world have established parks to protect wild species and their habitats. The argument behind this intervention seems reasonable. Since parks are a public good (a good that is provided by a producer who, in most cases, cannot limit its consumption), which creates positive externalities (the park benefits all users, even those who did not contribute to its creation), parks will theoretically be under-supplied by the market. In other words, a perceived market failure justifies government intervention.

However, there is evidence that governments are not necessarily infallible environmental stewards. For example, when the US federal government passed legislation to protect endangered species in 1973, it did not recognize the perverse incentives such legislation would create. Instead of protecting species, the legislation resulted in the destruction of habitat and wildlife on private land. If bureaucrats determined that a piece of property was attractive to an endangered species, owners could be prevented from building, cutting down trees, or altering their land in any way. These restrictions lowered property values, and since the government did not compensate landowners for this loss, some landowners intentionally made their land unattractive to wildlife. In extreme cases, landowners resorted to killing endangered species in order to protect their property values in a practice known as "shoot, shovel, and shut-up." Although there are examples of more successful government approaches to environmental protection, the US experience with endangered species legislation highlights the potential for regulation to adversely affect environmental quality.

Can markets help protect the environment?

The major difference between the government and market approach to environmental protection is that markets rely on voluntary action while governments rely on coercion. Private, non-profit organizations² face similar incentives to those of the for-profit sector. In order for non-profit groups to continue their environmental efforts, they must use their resources efficiently to provide as much environmental protection as possible within their limited budgets. Non-profit groups are accountable to their funders who voluntarily decide either to continue donating or, if they are not satisfied with the performance of the non-profit, to remove their support. In contrast, government programs are funded by tax dollars, which are typically pooled into general revenues and not earmarked for specific programs. As a result, there is no direct link between the funders (taxpayers) and program deliverers (a government agency that is allocated funds from general revenue). Government's accountability to its funders is thus far less rigid than the private sector's since government funding is essentially unlimited and its funders are more or less voiceless.

The growing number of non-profit conservation initiatives in Canada and other countries around the world contradicts the belief that environmental protection can only be provided by government. Hundreds of Canadian non-profit organizations are focused solely on preserving, protecting, and enriching our natural environment. Over 2 million hectares of land in Canada is currently owned, managed, and conserved by 8 of the larger non-profit conservation groups. The amount of land protected by these independent groups grew an impressive 90 percent between 1993 and 1997 (Jones, p. 15).

The work of the Nature Trust of British Columbia and Ducks Unlimited Canada (see following article) provides an example of the impact that non-profit activities can have on Canadian conservation. In 1987, these organizations partnered to create the award-winning Pacific Estuary Conservation Program (PECP) to protect British Columbia's critical estuaries (a water passage where the tide meets a river current). To date, 1,515 hectares of critical estuary land has been acquired for conservation along the coast of British Columbia (Kelsey, p. 4).

Another example of not-for-profit private conservation involves voluntary donations by individuals of environmentally sensitive land to non-profit organizations. The Nature Trust of New Brunswick Inc. manages and protects a number of privately-donated nature preserves around the province, including the 78 hectare Pickerel Pond Nature Preserve, adjacent to Maquapit Lake in Queen's County. To raise funds for the management of nature preserves like Pickerel Pond, the Nature Trust of New Brunswick Inc. uses programs such as its Adopt-a-Frog campaign, which offers individual donors an opportunity to protect frogs and other species through natural habitat preservation.³

Table 1: National and Provincial Environmental Charities in Canada

Celebrating Earth Day

The positive environmental impact of non-profit conservation initiatives in Canada discredits the argument that governments are the only viable providers of environmental quality. Instead of continuing to abdicate responsibility for protecting wildlife habitat or preserving parkland to government agencies such as Environment Canada, Earth Day is an opportune time for Canadians to focus on and celebrate the tremendous innovations and successes of the non-profit conservation sector. In order to sustain current non-profit conservation activities and encourage further initiatives, it is important that individuals become informed about these non-profit organizations and their market-based conservation programs. The 3 national and 14 provincial environmental charities listed in table 1 might be a good place to begin.

References

Environment Canada Digital Document: www.cws-scf.ec.gc.ca/ecogifts/eng/qualified_htm). Date site last confirmed: March 7th, 2001.

Jones, Laura (1999). Crying Wolf? Public Policy on Endangered Species in Canada. Vancouver, BC: The Fraser Institute.

Kelsey, Elin. (1999). The award-winning Pacific Estuary Conservation Program. The Nature Trust of British Columbia, Vancouver, BC.

Law, Marc and Jason Clemens (1998). "What Does Market Failure Mean? Part 1: Market Power." Fraser Forum(March). Vancouver, BC: The Fraser Institute.

_____ (1998). "Market Failure: What Does It All Mean? Part II: Externalities." Fraser Forum (April). Vancouver, BC: The Fraser Institute.

_____ (1998). "What Does Market Failure Mean? Part III: Public Goods." Fraser Forum (May). Vancouver, BC: The Fraser Institute.

The Nature Trust of New Brunswick Digital Document: http://www.naturetrust.nb.ca/pickerel.htm. Date site last updated: February 2001.

The Nature Trust of New Brunswick Digital Document: http://www.naturetrust.nb.ca/frog.htm. Date site last updated: February 2001.

Notes

1 Currently, Canadians pay for government conservation through their taxes. To some extent, the collection of these taxes "crowds out" donations to non-profits. But governments also use tax revenue to make donations to some of these non-profits. We will save questions about what would happen if governments lowered tax burdens and stopped contributing to non-profits for future articles.

2 Private conservation is provided by for-profit groups and not-for profit groups, including environmental charities. Charities are distinguished from the broader category of non-profit organizations by their ability to issue tax-deductible receipts for donations. For the purposes of this article, we focus on private conservation provided by non-profit organizations.

3 For further information on the above programs, please refer to their websites, which are listed in table 1.

4 This is not a complete list of environmental charities in Canada. Instead, it is a list of those environmental charities that have been deemed by the Minister of Environment as being eligible to receive a particular type of land donation called an ecological gift.

Miriam Bixby (miriamb@fraserinstitute.ca) is a Research Economist at The Fraser Institute. She has an MA in Economics, with a specialization in the environment, from the University of Toronto.

Karina Wood is Project Co-ordinator for the Donner Awards Program at The Fraser Institute. She has a Bachelor of Applied Science from the University of Western Sydney and postgraduate diplomas in business studies and financial management.

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