The Economics of the Arctic National Wildlife Refuge – Arctic National Wildlife Refuge: A Casualty of Leasing Law or Candidate for Privatization
Energy & Environment, Vol. 18, No. 1, 2007
13 Pages Posted: 23 Jul 2011
Date Written: July 21, 2011
Should the Arctic National Wildlife Refuge (ANWR) be used to drill for oil, or should this type of economic development be forbidden, in favor of protecting environmental amenities? In economics, this is a classical question of the allocation of resources, and we propose to answer it in a similar manner in this case, even though such reasoning is not typical of debates in this field. We answer the ANWR challenge with arguments favoring solutions emerging from private property arrangements, and provide an illustrative example of markets at work. We take neither side, but urge that the free enterprise system be allowed to address the issue. It is our claim that this is a superior system, as entrepreneurs who make mistakes suffer economic penalties, and this feedback mechanism is either entirely missing in political and bureaucratic institutions, or at the very least greatly attenuated there.
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