Voluntary environmental planning fails because buyers won’t pay for public goods

Evidence

Though intended to serve a public purpose, a new community was still a profit-making venture. Unless a developer chose willingly to accept a substandard rate of return, the cost of environmental planning and open-space preservation had to be included in the price of homes and development sites. Yet the benefits of environmental protection were not enjoyed solely by residents. Only a portion of the cost of undeveloped land went for recreational amenities, so only a portion of the cost of environmental design helped developers to market the community. Though a government loan guarantee might help to get the project off the drawing board, the federal aid program did not change the basic accounting equation. If the developer was not willing to treat the project as a philanthropic enterprise, then the homebuyers had to pay to provide a public good – environmental protection – out of the goodness of their hearts. That was asking a lot. As one housing expert concluded, the new communities required buyers to buy too much that they did not want. — Adam Rome, The Bulldozer in the Countryside, 1066

Categorization

• DEEPTHINKING: A genuinely sharp structural argument: private solutions to environmental public goods are self-defeating because private developers must charge buyers for benefits that spill beyond buyers.
• XREF: connects to: Free markets shift environmental costs onto communities whoever produces — Adam Rome, The Bulldozer in the Countryside:…, 1051; Consumer environmentalism failed because both rich and poor buyers chose energy waste — Adam Rome, The Bulldozer in the Countryside:…, 292; High stakes and good intentions do not overcome commons coordination failures (+5 more)

Broader Connections

• High stakes and good intentions do not overcome commons coordination failures #corroborates (0.80)
• Environmental protection structurally requires present sacrifice for unverifiable future gain #expands (0.80) — Richard J. Lazarus, The Making of Environmental Law, 983
• 1970s environmental law aimed to reorder markets, not optimize within them #complicates (0.80) — Douglas A. Kysar, Regulating from Nowhere, 598
• Market-driven consumer economics omits environmental costs from its calculations #qualifies (0.75) — Albert Bandura, Moral Disengagement, 2656
• Environmental entitlements are meant to be law-created, not preference-derived #expands (0.75) — Douglas A. Kysar, Regulating from Nowhere, 309
• Dependency theory denied that market trade is voluntary and mutually beneficial #corroborates (0.75) — Jessica Whyte, The Morals of the Market, 320