The ‘Coase theorem’ represents the traditional economic solution
to environmental conflicts. Coase argued that if property rights
are well-defined and enforced, bargaining between parties
ensures that the optimal outcome is achieved, regardless of who
holds the rights. According to one description of the theorem:
Many disputes over resources stem from the fact that no one owns
them. Or -- nearly as bad -- everyone owns them, as in the case
of public property. However, these disputes could be resolved if
the unclaimed resources were divided up as private property. Now
if someone wants to use your property, you could charge them a
fee. Or if they abuse your property, you can sue them. Assigning
property rights greatly enhances the ability to resolve disputes
over the use and abuse of resources.The Recherche Bay deal is
perhaps an example of how this idea might work, sort of:
environmentalists have gotten together money to buy an area of
Tasmania’s historic Recherche Bay to protect it from logging by
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