8 Conclusion
Property can generally be held in private, common, public and open access forms of ownership and management. The confusion between common and open access property can be addressed by making clear that for the former access is limited to members of the common group while the latter is completely uncontrolled. The tragedy of the commons is likely to occur sooner and more seriously for open access than common property.
Property rights exist in the context of social/legal rules and evolve as society, technology and institutions change. Increasingly rights derive from Government action, whether explicitly or implicitly. Rights also are increasingly constrained by local planning or zoning changes. Making new or modified rights work within these constraints and those imposed by existing rights structures can be very complex, expensive and slow The difficulty of such implementation, including the creation of the necessary institutions and assembling required information is often underestimated.
Comparing rights is difficult but can be assisted by applying a common set of characteristics such as flexibility, divisibility, transferability, quality of title, exclusivity and duration. This does clearly illustrate differences such as freehold versus leasehold land, and the nature and rough size of the tradeoffs involved in decisions such as restricting the transferability of assets to preserve indigenous control.
The role of rights in environmental policy tends to focus on issues of scarcity and environmental damage; ie, allocating resources to the best value use and minimising pollution or other negative environmental effects of resource use. Both Command-and-Control (CAC) and Market-Based-Instruments (MBI) affect rights but the latter more actively uses allocation and exercise of rights to create desirable incentive effects. In very simple terms, a CAC approach requires the use of certain techniques or imposes specific limits with no constraint on the cost to be incurred, while a MBI approach uses taxes or permits to achieve maximum improvements at a specific cost or a specific level of improvement at a minimum cost.
Fishing rights are a classic example of the failure of CAC approaches such as controls on duration of fishing or types of equipment used. New Zealand, conversely, has had considerable success with using Individual Transferable Quotas to create incentives for sustainable fishery management. Water rights, however, are not so easily addressed with major complications around information and technical issues, vested rights and ecological needs.
New Zealand has made extensive use of rights regimes to manage resources such as fisheries, land, minerals and radio frequencies and is developing such a regime for aquaculture but lacks a comprehensive approach to water management (where the current Australian reforms should be of use) and has only limited ability to trade off competing uses within the Resource Management Act.
This paper is intended to lay out a preliminary foundation for applying a property rights perspective to environmental policy issues facing New Zealand rather than apply such an approach to any specific issue. In this context a few general points can be made.
First, there can be a quite false dichotomy between the use of regulation and the market to achieve environmental and conservation objectives. Regulation by any form, whether through command-and-control means or market-based instruments, inevitably creates, modifies or reassigns property rights in some way. The choice is about which approach achieves the optimal national welfare outcome.
Secondly, if such discussion points to more use of market-based instruments, significant work will be required to create the legal and institutional framework needed for their effective application. Getting from theory to successful practice can be complicated, slow and frustrating, particularly for trade-offs between social, economic and environmental outcomes or when the resources to which the rights relate are not uniform in quality, location or other aspect (water trading raises such issues). These difficulties are illustrated in the New Zealand context by the lengthy and ongoing process of designing and implementing the current fisheries ownership and management regimes, and in the frustrating experience in both New Zealand and Australia with water management.
Finally, there is no general answer for these problems, but an open discussion of what the objectives of a particular rights regime are, of how that affects the characteristics of the rights and future management of the underlying resources, and of what trade-offs need to be made and by whom, can only improve the overall outcome for society.
