Posted: 01/25/2006
Ownership Society Should Apply To Gulf Coast Rebuilding
New NCPA Study Calls for Ending Counterproductive Subsides
DALLAS (January 25, 2006) - As President Bush puts finishing touches on next week's State of the Union address, a new study from the National Center for Policy Analysis (NCPA) suggests he should add a section - extending his "Ownership Society" to the rebuilding of New Orleans. The NCPA report argues that counterproductive development subsidies have turned what could have been a bad weather event into a catastrophic human tragedy.
"The government should not foster, let alone finance, development in environmentally-sensitive, highly disaster-prone areas," said NCPA Senior Fellow H. Sterling Burnett, the study's author. "These subsidies encourage building on coastal wetlands and beaches and leave them one hurricane away from devastation."
According to the study, the National Flood Insurance Program (NFIP) and U.S. Army Corps of Engineers' flood control and beach restoration projects subsidize and encourage coastal development by shifting the cost of insurance and physical protection against floods from property owners to taxpayers. From 1928 through 2001, the Corps spent $123 billion (adjusted for inflation) on flood control projects nationwide.
The NCPA study concludes that besides posing a threat to human life as witnessed in the aftermath of Hurricane Katrina, these projects also disrupt wildlife habitat. For example:
- Pollution from these developments has contributed to the decline in oyster beds, sea grasses and other flora and fauna.
- Government-subsidized coastal development in the Chesapeake Bay region has resulted in a 98 percent decline in Bay oyster production, a 58 percent loss of historic wetlands, and an 88 percent loss of historic underwater grasslands.
Burnett noted that the best way to protect coastal resources is to end all subsidies that encourage human occupation. "Ending these programs wouldn't prevent property owners from developing their lands as they choose," said Burnett. "But it would ensure that property owners, rather then the general public, would bear the full cost of those development decisions."
The study, "Protecting the Environment-The Ownership Society Part I," also examines subsidies for agriculture and endangered species regulations. It concludes that while many subsidies originally had noble intentions, they have created perverse incentives that have led to environmental harm.