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EXISTENCE VALUE AND FEDERAL PRESERVATION REGULATION David A. Dana∗ Some, perhaps many, Americans lose some sense of well-being simply by virtue of the loss of the existence of natural resources in states where they do not live. Unlike physical spillovers or losses in use, “existence values” are harmed when people value the existence of a natural resource intrinsically, so that the destruction of the resource in and of itself harms them. This Arti- cle develops a normative defense of federal preservation regulation prem- ised on existence-value concerns, reasoning that such regulation has the potential to maximize aggregate social welfare just as much as regulation of other types of externalities, such as physical spillovers. This Article also re- sponds to the objections of critics who reject existence values as a legitimate basis of federal regulation. The principal objection, that existence values are nonmeasurable, is inconsistent with the ªndings of contingent value surveys, used precisely to elicit and quantify non-use values in monetary terms, and more importantly, with the comparative measure of the magnitude of the ex- istence-value beneªts of natural resources and other conflicting interests that the federal political process itself provides. Critics also suggest that such regulation is in tension with the principles of respect for private prop- erty rights and of distributive justice among communities, but these princi- ples do not present concerns that are uniquely applicable when existence values are the motivation for the regulation. Finally, this Article evaluates the implications for regulation premised on existence-value concerns of dif- ferent approaches to Commerce Clause doctrine and standing requirements for citizen suit enforcement. I. Introduction The role of the federal government in preserving natural resources is now under serious challenge. A group of proliªc legal scholars is cur- rently disputing the need for a signiªcant regime of federal preservation regulation.1 In Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers (“SWANCC”),2 the United States Su- preme Court recently suggested that a substantial portion of the federal program of wetlands protection under the Clean Water Act unconstitu- ∗ Visiting Professor of Law, Harvard Law School, and Professor of Law and Associate Dean for Faculty Research, Northwestern University School of Law. This Article beneªted greatly from comments by participants in faculty workshops at Harvard and Northwestern Law Schools. I am particularly grateful for the thoughtful suggestions I received from Ken Abraham, Dan Farber, Beth Garrett, Bruce Hay, Howell Jackson, Heidi Kitrosser, Saul Levmore, Susan Koniak, Tom Merrill, and Rob Sitkoff. 1 See, e.g., Todd J. Zywicki, Baptists?: The Political Economy of Environmental Inter- est Groups, 53 Case W. Res. L. Rev. 315 (2002) (arguing that almost all of federal envi- ronmental regulation is motivated by “rent seeking”); Andrew P. Morriss, Bruce Yandle & Terry L. Anderson, Principles for Water, 15 Tul. Envtl. L.J. 335 (2002) (arguing for the decentralization of environmental regulation in the United States); Jonathan H. Adler, Free & Green: A New Approach to Environmental Protection, 24 Harv. J.L. & Pub. Pol’y 653, 690–94 (2001) (advocating decentralization). 2 531 U.S. 159 (2001). 344 Harvard Environmental Law Review [Vol. 28 tionally infringes upon state authority to control local land use and de- velopment.3 In recent dissents, two prominent lower federal court judges have argued that the Endangered Species Act (“ESA”), as implemented by the federal government, exceeds the constitutional bounds of permis- sible federal authority over land use.4 The Supreme Court repeatedly has been asked to accept certiorari in cases challenging the constitutionality of the ESA’s application to a species located entirely within the bounda- ries of a single state.5 The challenge to federal preservation regulation builds on a cramped conception of environmental externalities. Conventional economic and po- litical theory predicts that the states will underregulate the degradation or destruction of natural resources within their borders when some or all of the resulting adverse effects fall outside their borders, that is, upon out- of-staters. Academic critics of the federalization of environmental law agree with this conventional view at an abstract level, but, in their view, only the physical effects of the destruction of a natural resource on out- of-staters should count as an interstate externality that can justify federal intervention.6 The federal courts may be moving toward an even narrower 3 The Court in SWANCC held that the Clean Water Act does not authorize federal regulation of so-called “isolated wetlands,” wetlands that are not adjacent to waters of the United States within the meaning of the Act, in part on the ground that federal regulation of such wetlands raises serious constitutional concerns. 531 U.S. at 174. For useful discus- sions of the implications of SWANCC, see William Funk, The Court, the Clean Water Act, and the Constitution: SWANCC and Beyond, 31 Envtl. L. Rep. (Envtl. L. Inst.) 10741 (2001) (arguing that “the implications of the decision’s statements regarding Congress’s power under the Commerce Clause could be potentially staggering for environmental law”); Robin Kundis Craig, Beyond SWANCC: The New Federalism and Clean Water Act Jurisdiction, 33 Envtl. L. 113 (2003) (concluding that SWANCC could inºuence envi- ronmental law as a whole). 4 See Gibbs v. Babbitt, 214 F.3d 483, 506–10 (4th Cir. 2000) (Luttig, J., dissenting); Nat’l Ass’n of Home Builders v. Babbitt, 130 F.3d 1041, 1060–67 (D.C. Cir. 1997) (Sentelle, J., dissenting). Judge Luttig reportedly is receiving consideration as a possible Supreme Court nominee. See Robin Toner & Neil A. Lewis, Lobbying Starts As Groups Foresee Vacancy on Court, N.Y. Times, June 8, 2003, § 1 at A1. 5 See, e.g., Bldg. Indus. Ass’n of Superior Cal. v. Norton, 247 F.3d 1241 (D.C. Cir. 2001), cert. denied, 534 U.S. 1108 (2002); Home Builders v. Babbitt, 130 F.3d 1041 (D.C. Cir. 1997), cert. denied, 524 U.S. 937 (1998); Gibbs, 214 F.3d 483, cert. denied, 531 U.S. 1145 (2001). 6 See, e.g., Henry N. Butler & Jonathan R. Macey, Externalities and the Matching Principle: The Case for Reallocating Environmental Regulatory Authority, 14 Yale L. & Pol’y Rev. 23, 30–31 (1996) (rejecting “a type of psychological externality that arguably arises even when pollution does not physically cross state lines” as a possible basis for federal intervention); Jonathan H. Adler, The Ducks Stop Here? The Environmental Chal- lenge to Federalism, 9 Sup. Ct. Econ. Rev. 205, 233 (2001) (concluding that only “tangi- ble spillover effects” can justify federal intervention, and even then only tangible effects that “would be actionable at common law, such as emitting pollutants upstream”); Robert H. Nelson, Does “Existence Value” Exist?—Environmental Economics Encroaches on Religion, in The Independent Review, Vol. I. 499, 500 (1997) (arguing that economics and political economy should return to historical practice of excluding from consideration things “that [are] never seen, touched or otherwise experienced—that [are] not consumed in any direct way . . .”); Donald J. Boudreaux, Roger E. Meiners & Todd J. Zywicki, Talk Is Cheap: The Existence Value Fallacy, 29 Envtl L. 765, 802 (1999) (rejecting regulation 2004] Existence Value and Federal Preservation Regulation 345 conception of what constitutes an environmental externality that can jus- tify federal regulatory intervention—a conception in which the external- ity must entail interstate market effects in addition to interstate physical effects. A signiªcant set of the interstate effects of natural resource degrada- tion and destruction, however, cannot plausibly be classiªed as either physi- cal or market effects. Some, perhaps many, Americans lose some sense of well-being simply by virtue of the loss of the existence of wetlands, wa- terways, and other natural resources in states where they do not live.7 Exis- tence values (or more precisely, the desire to prevent the loss of existence values) provide a powerful positive account of how the federal political process, despite concerted opposition by well-organized business interests, has at times come to restrict the degradation of natural spaces that few out-of-state residents are likely ever to visit or otherwise use. Existence val- ues also provide a strong normative account of why such restrictions are, from a societal vantage, presumptively welfare-maximizing. Indeed, as explained in Part III, federal regulation is more likely to be necessary to maximize welfare in the context of interstate losses in existence value than in the context of interstate physical effects, such as air or water pollution crossing state lines. The principal claim of those who reject the use of existence values as a rationale for federal regulation is that existence values are nonmeasurable and hence unsuitable for consideration in public policy.8 As explored in premised on “psychic” externalities). Richard Revesz, a highly sophisticated critic of the scope of federal pollution control regulation, acknowledges existence values as a basis for interstate externalities, but seems to suggest a narrow role for federal regulation premised on existence value concerns. His position, however, is not well-deªned. See Richard L. Revesz, The Race to the Bottom and Federal Environmental Regulation: A Response to Critics, 82 Minn. L. Rev. 535, 543 (1997) (very brieºy addressing the issue of existence value as a justiªcation for federal control of “exceptional natural resources such as na- tional parks”). 7 In the economics literature, the concept of existence value is generally attributed to a 1967 article published by John V. Krutilla. See John V. Krutilla, Conservation Reconsid- ered, 57 Am. Econ. Rev. 777, 781 (1967) (arguing that “[t]here are many persons who obtain satisfaction from mere knowledge that part of wilderness North America remains even though they would be appalled by the prospect of being exposed to it”). In the legal aca- demic literature, Richard Stewart addressed “psychic” spillovers and national moral values regarding the environment—concepts similar to existence value—in an important article written just as the current regime of federal environmental regulation was taking shape. See Richard B. Stewart, Pyramids of Sacriªce? Problems of Federalism in Mandating State Implementation of National Environmental Policy, 86 Yale L.J. 1196, 1215–19 (1977). 8 See, e.g., Donald H. Rosenthal & Robert H. Nelson, Why Existence Value Should Not Be Used in Cost-Beneªt Analysis, 11 J. Pol’y Analysis & Mgmt. 116, 117–18 (1992) (arguing that “even a single existence value is very difªcult to measure accurately in prac- tice” and that there is “little if any prospect” for the emergence of a “valid method” to measure existence values). The same critics who maintain that existence values are non- measurable also make a second, and inconsistent, empirical claim—that existence values are minimal or limited to a very few well-known resources. See Boudreaux et al., supra note 6, at 775 (asserting that “[w]hile some major landmarks such as the Grand Canyon or Yellowstone Park may have some amount of existence value, pure existence value divorced 346 Harvard Environmental Law Review [Vol. 28 Part IV below, this empirical objection is inconsistent with the ªndings of contingent value (“CV”) surveys in which respondents have been asked how much they would be willing to pay for the preservation of one or more natural resources. The CV surveys completed to date, although admittedly imperfect as measurement devices, suggest signiªcant values for the preser- vation of a range of natural resources. More importantly, the federal po- litical process itself provides a comparative measure of the magnitude of the existence-value beneªts of natural preservation (on the one hand) and the magnitude of the competing economic beneªts associated with the degradation or destruction of natural settings (on the other). If anything, given the core insights of public choice theory and the structural supports in the federal political process for industries whose economic interests often run counter to natural preservation (e.g., the mining, timber, and oil industries), we should expect the federal political process to understate signiªcantly the comparative magnitude of the existence-value beneªts of natural preservation. The current literature also contains a non-empirical objection to ex- istence values as a justiªcation for federal regulation. The essence of this objection is that federal preservation regulation premised on existence value preferences is illegitimate because it violates the principles of re- spect for private property rights and distributive justice among commu- nities. As explained in Part V below, these principles, at best, support the claim that all sorts of government regulation—and not just federal regu- lation aimed at preserving natural resources—is illegitimate from a par- ticular (and highly contestable) point of view. The normative defense of existence values and existence-value-driven regulation developed in Parts III–V provides a useful perspective from which to evaluate the current state of Commerce Clause doctrine. Commerce Clause doctrine has never formally recognized existence-value concerns as a basis for federal jurisdiction, and that is unlikely to change. However, certain doctrinal approaches to the Commerce Clause create room for regulation motivated by existence-value concerns, and others, such as the approach arguably endorsed by the majority in SWANCC, do not.9 If one accepts that federal regulation premised on existence-value concerns is presumptively welfare maximizing, then one must accept that Commerce Clause tests that preclude such regulation carry a substantial social cost. The normative de- fense of existence-value regulation also has implications for the choice between approaches to standing that facilitate citizen enforcement of regu- lations premised on existence-value concerns, and approaches, such as from potential use value is likely to be trivial in amount in most cases. It is unrealistic to think that individuals would be willing to forgo more than a small amount of income or other use value for pure existence value”). 9 See infra Part VI.A. 2004] Existence Value and Federal Preservation Regulation 347 that endorsed by the majority in Lujan v. Defenders of Wildlife,10 that im- pede such enforcement.11 In sum, the principal claim of this Article is that when the federal po- litical process generates regulation to preserve the existence value Ameri- cans attach to natural resources, that regulation should be regarded as pre- sumptively welfare-maximizing, presumptively constitutional, and presump- tively subject to citizen enforcement by means of Congressionally author- ized citizen suits. II. An Overview of “Existence Value” This Part sets the stage for the normative defense of existence-value regulation developed in Parts III–V by providing an overview of the concept of existence value, and describes how losses in existence values differ from other losses that ºow from the destruction of natural resources. This Part explores how existence values are revealed in concrete terms. A. Existence-Value Losses and Other Effects of Natural Resource Destruction The destruction of a natural resource, such as a wetland12 or endan- gered species habitat,13 can have a variety of effects both within and outside 10 504 U.S. 555 (1992). 11 See infra Part VI.B. 12 Soon after the passage of the Clean Water Act, 33 U.S.C. §§ 1251–1387 (2000), the United States Army Corps of Engineers began the development of complex federal permit- ting requirements for the ªlling of wetlands, which are marshy areas that may or may not border ºowing waterways. Ecologists and biologists rank preservation of wetlands as a high priority in part because wetlands provide habitat to a diverse array of ºora and fauna and are integral to the health of larger hydrological systems, including lakes, rivers, and streams. See David E. Adelman & John H. Barton, Environmental Regulation for Agricul- ture: Towards a Framework to Promote Sustainable Intensive Agriculture, 21 Stan. Envtl. L.J. 3, 27 (2002) (discussing the values of wetlands and noting that “[w]etlands are of par- ticular ecological importance because they provide important habitat to about forty percent of the species listed as endangered or threatened under the ESA”). The wetlands permitting requirements allow the Corps to deny ªll permits or grant the permits subject to conditions requiring the minimization of and/or mitigation of ecological harm. The Corps rarely denies a permit altogether, but the agency regularly requires project modiªcations and mitigation of environmental impacts. For helpful discussions of the development and operation of the federal wetlands program under Section 404 of the Clean Water Act, see Robert V. Per- cival et al., Environmental Regulation 673–93 (2003); Oliver A. Houck, Hard Choices: The Analysis of Alternatives Under Section 404 of the Clean Water Act and Similar Envi- ronmental Laws, 60 U. Colo. L. Rev. 773, 777–98 (1989). 13 Enacted in 1973, the Endangered Species Act (“ESA”) bars any federal action that will “jeopardize” the continued existence of an endangered or threatened species, and also prohibits any “taking”—roughly deªned as harming—of any protected species on non- federal land. 16 U.S.C. §§ 1531–1533, 1536, 1538 (2000). The focus of the ESA as written is upon single species, considered one at a time in isolation. However, much of the regula- tory activity under the ESA has focused upon “signature” species whose decline typiªes diminishing—in a sense endangered—ecosystems or landscapes. Recent habitat conserva- tion plan initiatives within the United States Department of Interior explicitly employ a 348 Harvard Environmental Law Review [Vol. 28 state boundaries. Because state boundaries have no necessary relation to any underlying environmental reality, interstate effects can dominate over in- trastate effects. Consider, for example, the destruction of wetlands that ªlter wastes in an area at the border of two states. If the wetlands are located in State A and are adjacent to a river that ºows from State A to State B, resi- dents of State B could bear the brunt of the adverse effects. Physical spillovers typically entail some pollutant or other substance crossing state boundaries and imposing risks of harm or actual harm on resi- dents of a state. If a wetland in one state is destroyed, for example, peo- ple in another state could suffer from ºooding or decreased water quality as a result of the hydrological connections between waters and wetlands in the two states. If the habitat of a mosquito-eating insect in one state is de- stroyed, and as a result the number of mosquitoes in both that and neigh- boring states skyrockets, the people in the neighboring states could suffer from increases in mosquito-borne illnesses. The destruction of a natural resource can also adversely affect out- of-staters by depriving them of opportunities to visit or otherwise use the natural resource. Losses of use typically are manifested by a decrease in the number, length, or intensity of interstate trips to the site of the resource. For example, consider a wetland habitat that supports a breed of birds much prized by birdwatchers. Residents of a number of states come to the state where the habitat is located in order to watch the birds. The destruction of that habitat would end such interstate trips. Unlike physical spillovers or losses in use, losses in existence value are not predicated on any change in the physical ºow of living entities or non-living things across state borders. When people value the existence of an out-of-state resource intrinsically, then the destruction of the re- source in and of itself harms them. That harm occurs even if the destruc- tion of the resource never has and never will result in physical spillovers or losses in use. A number of psychological processes may account for existence val- ues in the natural resources context. People may value diverse habitats and diverse wildlife intrinsically because of moral or spiritual/religious convic- tions about nature and the inherent worth of non-human entities. Alterna- tively, they may derive psychic satisfaction, a sense of heightened well- being,14 from the existence of certain natural resources even though they have no conscious moral or spiritual values regarding those resources. For multispecies, ecosytem-wide approach. See generally Bruce Babbitt, Science: Opening the Next Chapter of Conservation History, 267 Science, Mar. 31, 1995, at 1954; J. B. Ruhl, Is the Endangered Species Act Eco-pragmatic?, 87 Minn. L. Rev. 885 (2003). 14 A substantial tradition in welfare economics includes individual well-being—some- thing that goes well beyond material welfare—within the meaning of welfare. See gener- ally Lewis A. Kornhauser, Preference, Well-Being, and Morality in Social Decisions, 32 J. Legal Stud. 303 (2003) (discussing possible limits to what can be incorporated into the notion of welfare). 2004] Existence Value and Federal Preservation Regulation 349 some people the knowledge that 200-year–old groves of trees remain standing and ºourishing is a source of joy in and of itself.15 For other people, moral convictions and psychic satisfaction may go hand in hand. One would assume, for example, that an individual who as a moral and spiritual matter values diversity in nature will have greater psychic satis- faction—greater well-being—if she knows that temperate rainforests have been saved and hundreds of species uniquely adapted to such rainforests have been preserved rather than allowed to become extinct. An extensive set of literature analyzes the possible roots of existence values associated with natural resources, but motives are generally treated as irrelevant for the purpose of welfare economics.16 One advantage of this approach is that it largely avoids the difªcult tasks of assessing the roots of different preferences and assessing whether some preferences deserve more or less weight. We do not fully understand why people have exis- tence values for natural resources, but neither do we fully understand why people have non-existence values for natural resources (or many other things). For example, although we can readily recognize that birdwatch- ers value wetlands so that they can view an array of birds, we have no theory as to why anyone values birdwatching in the ªrst place. It is not obvious why the value derived by birdwatchers from bird watching, but not the value derived by non-birdwatchers from knowing that birds continue to exist, should “count” in the determination of public policy. According to one critique of the use of existence-value preferences as a justiªcation for preservation regulation, existence-value preferences regarding natural resources are more problematic than non-existence-value preferences because existence value preferences are, in Dworkinian terms, 15 Existence values may be present even for natural resources more common than en- dangered species and threatened landscapes, but as commentators have suggested and as patterns of preservation regulation indicate, existence values are likely to be more robust for “[n]atural features of the environment, with . . . unique, irreplaceable . . . character” than they are for “resources which are abundant, or for which many substitutes are avail- able.” Tom Crowards, Nonuse Values and the Environment: Economic and Ethical Motiva- tions, 6 Envtl. Values 143, 145 (1997). 16 Some commentators have suggested that, to the extent existence values are based on altruistic commitments to nature and/or wildlife, and not on a desire for psychic satisfac- tion per se, existence values cannot be considered as part of an aggregate welfare calcula- tion. See, e.g., David S. Brookshire et al., Existence Values and Normative Economics: Implications for Valuing Water Resources, 22 Water Resources Res. 1509, 1514–15 (1986) (citing Amartya K. Sen, Rational Fools: A Critique of the Behavioral Foundations of Economic Theory, 6 Phil. & Pub. Aff. 317, 327 (1977)); K. E. McConnell, Does Al- truism Undermine Existence Value?, 22 J. Envtl. Econ. & Mgmt. 32 (1997). As an em- pirical matter, it is far from certain that one could ever accurately isolate the percentage of existence value valuations that is attributable to moral and spiritual values, as distinct from other psychological phenomena or concerns. Asking people why they value the existence of a resource sounds simple, but people are unlikely to have conscious access to all their reasons and, even if they do, they may not be able to translate their reasons into neat allo- cations among intelligible categories. As suggested above, my supposition is that moral and spiritual values and levels of psychic satisfaction are often linked, at least in the con- text of those who value preservation of natural resources. 350 Harvard Environmental Law Review [Vol. 28 “external preferences.” In Dworkin’s formulation, personal preferences are one’s preferences for one’s own enjoyment of goods or opportunities (such as the opportunity to observe birds); external preferences are one’s preferences for the assignment of goods and opportunities to others.17 Dworkin expressed concern about the potential social harm from external preferences, focusing on such external preferences as preferences for the denial of rights and material support to religious and racial minorities. A number of commentators have argued that if existence value preferences regarding natural resources are allowed to “count” in the aggregate social welfare calculus, then there will be no way to justify the exclusion of white racists’ preference for the racial subordination of African Ameri- cans, or intolerant Christians’ preferences that only Christian religious buildings and services be permitted.18 According to this argument, once we validate external preferences such as preferences for the existence of natural resources, we must validate all external preferences, no matter how re- pugnant. The problem with this argument is that what makes certain types of preferences seem wrong to include in a social welfare calculus—or even to include in the ongoing discourse of what should be included in the social welfare calculus—is not that the preferences are personal or external. Consider, for example, someone who is not racist but who for instrumental reasons supports racial restrictions so that she can gain admission to medical school; here the preference is personal—medical school admission and training being a personal good and opportunity—but the preference is every bit as objectionable as the preference of the racist to keep African Ameri- cans out of medical school simply because she cannot abide the very ex- istence of African American doctors. Personal preferences can be just as problematic as external ones. Conversely, there are many sorts of external preferences that seem wholly unobjectionable. Preferences on the part of adults for child-labor laws generally would be characterized as external preferences. Preferences for government efforts to protect ancient art- works in distant lands from looting and destruction also generally would be regarded as external preferences. Preferences on the part of Americans that societal resources be expended to curb racial genocide in Kosovo or Rwanda are external preferences. Preferences on the part of men for laws protecting women against violence also can be understood as a kind of external preference. What makes certain kinds of preferences seem so objectionable as to be “off limits” in social and political discourse is that, with respect to these preferences, a ªrm societal consensus exists that the preferences are mor- 17 See Ronald Dworkin, Taking Rights Seriously 235–37 (1977). 18 See, e.g., Boudreaux, et al., supra note 6, at 795 (arguing that “[t]here is no princi- pled difference between an environmentalist who claims that just knowing of the existence of a species of trout substantially raises his utility and a bishop who claims that just knowing that people are forced to attend church on Sunday substantially raises his utility”). 2004] Existence Value and Federal Preservation Regulation 351 ally wrong in and of themselves. There is a ªrm social consensus, reºected in our constitutional law, that racism and religious persecution are simply wrong. No such ªrm societal consensus exists with respect to prefer- ences for the existence of natural resources. Existence value preferences re- lating to natural resources are, instead, one of many kinds of preferences that are the subject of ongoing societal debate, contention, and deliberation. Another avenue for distinguishing racist and religious persecution pref- erences from preferences for the existence of natural resources is the princi- ple of equal respect and regard for all persons. As Robert Goodin argues, the liberal democratic and utilitarian/social welfare traditions “respect people’s choices because we respect people, not the other way around.”19 Preferences that embody disrespect for people—that deny the fundamental equality of a group of human beings—run counter to the premise of the liberal demo- cratic and utilitarian/social welfare traditions. The expressive meaning of the preference for the existence of natural resources is not, as with racism or the suppression of religious minorities, the denial of the fundamental equality of any group.20 The destruction of a natural resource also can be conceptualized as producing a loss in option value, as opposed to existence value. An op- tion refers to the entitlement to do or use something in the future; the current or present value of the option is known as option value. Option value is a function of a number of variables, notably when the option would be exercised if at all (the more remote the exercise, the less the present value), the gain from the exercise of the option assuming future circum- stances make the exercise attractive, and the probability such future cir- cumstances will obtain. In theory, existence value and option value are entirely distinct: the value a wildlife biologist may place on the option to visit an arctic refuge to study caribou sometime in the future is analytically unrelated to the value the biologist may place on the continued existence of the caribou re- gardless of whether she ever could or would want to observe them in the future. In practice, however, option values and existence values tend to blur, especially when the options in question are what I will call amorphous op- tions, that is, options that are open-ended as to time, the kind or value of future use, and the probability of future use.21 People who perceive amor- 19 Robert E. Goodin, Political Theory and Public Policy 80 (1982). See also Andrew Koppelman, Antidiscrimination Law and Social Equality 18–24 (1996) (re- jecting Dworkin’s external/personal preference distinction and arguing for the exclusion of racist preferences from social welfare calculations). 20 See Howard F. Chang, An Economic Analysis of Trade Measures to Protect the Global Environment, 83 Geo. L.J. 2131, 2195–96 (1995) (arguing that preferences for the existence of extraterritorial natural resources—resources in other countries or in commons, such as dolphins located in international waters—are consistent with the Dworkinian prin- ciple of equal respect and regard). 21 Some commentators have employed the term quasi-option to describe something similar to amorphous options. See Theodore Graham-Thomasi, Quasi-Option Value, in The Hand- 352 Harvard Environmental Law Review [Vol. 28 phous-option value in natural resources also tend to perceive intrinsic value in such resources.22 It may be impossible to distinguish the portion of such individuals’ valuation of the preservation of a resource that is rooted in amorphous option value from the portion that is rooted in existence value.23 The arguments in the remainder of this Article are framed in terms of existence-value concerns but, as a logical matter, they apply with equal force whether one assumes that the relevant concerns are “pure” existence- value concerns, “pure” amorphous-option concerns, or (what most closely tracks reality) some mixture of existence-value and amorphous-option book of Environmental Economics 594–614 (Daniel W. Bromley ed., 1995); Kenneth J. Arrow & Anthony C. Fisher, Environmental Preservation, Uncertainty, and Irreversibil- ity, 88 Q. J. Econ. 312, 315 (1974). I prefer the label amorphous options because the term “quasi-option” does not convey what is distinctive about this category of options: their highly unspeciªed, open-ended nature. 22 For example, the rhetoric of environmental groups in support of protecting wildlife and wilderness typically invokes both existence value and amorphous value concerns. See, e.g., Sierra Club, Ecoregions—An Introduction: Protecting the “Web of Life,” at http://www. sierraclub.org/ecoregions/intro.asp (last visited Mar. 21, 2004) (on ªle with the Harvard Environmental Law Review) (“Extinction is a tragedy in its own right. The intrinsic value of life itself—whatever form it may take—is reason enough to do all we can to save en- dangered species. But the loss of a species can have other, equally tragic consequences. In ways we may not even realize at the time, every such loss weakens the delicate ‘web of life’ which supports our planet’s biosphere. This, in turn, magniªes the threat to the sur- vival of the human species itself.”); EarthJustice, Wildlife, at http://www.earthjustice. org/program/wildlife/ (last visited Mar. 21, 2004) (on ªle with the Harvard Environmental Law Review) (“Miracle medicines are constantly being discovered in wild plants . . . . Other species have natural defenses against pests and blight, which may prove useful to agriculture . . . . There are less utilitarian reasons at work as well. It is not only folly to meddle fatally with the natural world, it is also wrong.”); Natural Resources Defense Council, California’s Marine Life Protection Act: How Marine Reserves Will Help Preserve Ocean Life, at http://www.nrdc.org/wildlife/ªsh/acaleg.asp (last visited Mar. 21, 2004) (on ªle with the Harvard Environmental Law Review) (arguing that wild areas, including the seas, “should be preserved for their intrinsic value” and because they “serve as a ‘biological insurance policy’ for future generations against our imperfect ability to project sustainable catch levels, our poor understanding of how ªshing affects ecological relationships in the oceans.”). 23 The political rhetoric used by legislators to justify preservation regulation also blends amorphous option value and existence-value concerns. See, e.g., S. Rep. No. 95-874, re- printed in A Legislative History of the Endangered Species Act of 1973, As Amended In 1976, 1977, 1978, 1979, And 1980, 1044 (1982) (statement of Lowell Weicker, U.S. Senator from Connecticut) (“[I]n 1973, the Senate decisively endorsed the Endangered Species Act with the intent to mitigate man’s effect on the destruction of life. We wisely recognized the importance of all creatures of the Earth and how much we have yet to learn of their potential worth. Notwithstanding the esthetic and spiritual values of such animals as the giant blue whale, and the practical medicinal beneªts of minute plants, all life is part of an intricate, interdependent web. No single species, therefore, is unimportant.”); Endan- gered Species Act of 1973: Hearings Before the Subcommittee on Environment of the Committee on Commerce on S. 1592 and S. 1983, 93d Cong. 114–15 (1973) (statement of Sen. Harrison A. Williams, U.S. Senator from New Jersey) (“[w]e might be able to do without many of the [creatures] which seem to be nonessential, but which give us pleasure, and make life more interesting and more complete. But that does not mean that we should . . . [O]ur wisdom is not yet extensive enough to grasp the full meaning of forever removing various forms of life from our environment. Every living thing has its own unique role in a given ecosystem. Whenever that delicate balance of nature is disturbed, for whatever reason and in whatever way, the entire fragile system begins to disintegrate”). 2004] Existence Value and Federal Preservation Regulation 353 concerns. The argument for regulatory intervention to address interstate losses in existence value developed in Part III applies equally well to in- terstate losses in amorphous-option value or losses of some mixture of existence and amorphous-option values. Parts IV–V’s analysis of the objec- tions to regulation premised on existence values, and the rejoinders to those objections, similarly extend to regulation premised on amorphous-option concerns or regulation premised on a mixture of existence-value and amor- phous-option concerns. B. How Existence Values Are Revealed Existence-value preferences are revealed in two quite distinct forms: in contingent value surveys, used precisely to elicit and quantify non-use values in monetary terms,24 and in political activism and outcomes. Two prominent examples of federal political outcomes that seem to reºect existence-value concerns are the federal wetlands program and the federal endangered species program. These programs are justiªed only in part by concerns regarding losses of use.25 Duck hunters, ªshermen and other outdoor enthusiasts support federal wetlands preservation, but they form only one piece of the political coalition in support of federal wetlands regulation.26 The ESA commands strong (and within certain segments of the population, intense) political support despite the fact that the prospect for human use or tangible beneªts from any particular protected species is remote. Similarly, federal governmental actions to protect wilderness areas on federal lands appear to be based on existence-value concerns. The prohibitions against drilling, mining and other extractive activities on remote lands in Alaska and Utah—lands that are unlikely to be the site of signiªcant recreational use any time in the foreseeable future—cannot be attributed to concerns regarding loss of recreational use.27 24 The signiªcance of CV surveys as a means of measuring existence values is addressed at length in Part IV, infra. 25 See Daniel A. Farber, Politics and Procedure in Environmental Law, 8 J. Law, Econ. & Organiz. 59, 64 (1992) (arguing that environmental statutes cannot be explained as primarily an effort to “serve the interests of upper-middle-class backpackers”). 26 For example, the lead “public interest” amici brief on behalf of the lawfulness of the Corps’s wetlands regulations at issue in U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985), was submitted by a coalition of environmental groups known for their com- mitment to the intrinsic value of wildlife and wilderness, such as the National Wildlife Fed- eration, and recreational groups, such as Bass Anglers Sportsman Society. See generally Brief of Amici Curiae National Wildlife Federation et al., United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985) (No. 84-701). 27 On the intense debate regarding wilderness designation in Utah and elsewhere, see Gale Norton Rouses Congress, N.Y. Times, June 21, 2003, at A26; Interior Dept. Wants To Limit Protected Lands; Wilderness Review Suspension Could Open 3 Million Utah Acres to Development, Wash. Post, Apr. 13, 2003, at A12; H. Michael Anderson & Aliki Moncrief, America’s Unprotected Wilderness, 76 Denv. U. L. Rev. 413 (1999) (examining the back- ground and legal framework for wilderness designations and protection of roadless areas on federal land). On the debate regarding drilling in the Arctic National Wildlife Refuge, a 354 Harvard Environmental Law Review [Vol. 28 One notable strand in “public choice” scholarship involves the ferreting out of anti-competitive, essentially commercial or economic motivations behind ostensibly “public interest” legislation and regulation, but this strand of scholarship has not had much to say about federal regulation directed at the preservation of natural resources and ostensibly premised (in part at least) on existence-value concerns.28 The absence of such accounts—even highly speculative accounts—is all the more notable because a number of academics have devoted considerable energy to positing hidden motives that might explain environmental and land use law in other contexts (in- cluding interªrm competition in the context of pollution control/industrial source regulation,29 interstate competition in the context of pollution con- place from which physical spillovers are extraordinarily unlikely and which very few Americans could even conceive of visiting, see, for example, David Firestone, Drilling in Alaska, a Priority for Bush, Fails in the Senate, N.Y. Times, Mar. 20, 2003, at A29 (noting that the debate about oil drilling was “unusually passionate and caustic” with opponents of drilling arguing that the refuge “would be irreparably damaged by the search for oil”); Helen Dewar, Senators Reject Call for Drilling in Alaska: Bush Defeated on Key Issue by Slim Margin, Wash. Post, Mar. 20, 2003, at A3 (explaining that “[t]he ªght over drilling . . . on Alaska’s northern coast has raged for years, becoming one of the most contentious issues in the sometimes-ªerce battles between energy and environmental forces”). 28 The only anecdote I could locate in the academic and popular literature suggesting that interªrm competition may underlie federal preservation regulation relates to the Wey- erhauser Company and the possible beneªts it and a few other large timber companies may have derived from timber restrictions on old-growth forest in the Paciªc Northwest. See Todd J. Zywicki, Environmental Externalities and Political Externalities: The Political Economy of Environmental Regulation and Reform, 73 Tul. L. Rev 845, 873–74 (1999); Dean Lueck, The Law and Politics of Federal Wildlife Preservation, in Political Envi- ronmentalism: Going Behind the Green Curtain 61, 105–07 (Terry L. Anderson ed., 2000). Weyerhauser’s private land holdings in the Paciªc Northwest are home to a lower concentration of old growth forest than is present on nearby federal lands. The initial re- strictions on old-growth harvesting on federal land may have boosted the value of Weyer- hauser’s private land holdings, but there is no evidence (in the public domain at least) that Weyerhauser supported the listing of the spotted owl as an endangered species. The re- strictions on the harvesting of timber on federal land harmed Weyerhauser’s lucrative busi- ness of acting as a broker/exporter of unprocessed logs harvested on federal land. See Dy- lan Rivera, Small Mills Step Up, Portland Oregonian, May 12, 2003, at B1. Most im- portantly, the restrictions on harvesting practices on federal land were soon followed by restrictions (albeit negotiated rather than unilaterally imposed restrictions) on harvesting on private land, including over 600,000 acres of Weyerhauser’s private land holdings in the Paciªc Northwest and hundreds of thousands of acres owned by other companies. See James Pipkin, Ofªce of Policy Analysis of the U.S. Dept. of Interior, The North- west Forest Plan Revisited (1998), available at http://www.reo.gov/library/reports/ NFP_revisited.htm (last visited Mar. 21, 2004). During both the 1996 federal election cycle, when Bill Clinton ran for re-election, and the 2000 federal election cycle, when Al Gore ran for election as president, Weyerhauser did not act like a ªrm that was grateful to the Clinton Administration for covertly conferring rents on the company by means of environmental regulation: Weyerhauser channeled almost all its campaign contributions in both election cycles to Republican candidates and the Republican party (92% in the 1996 cycle, 89% in the 2000 cycle). See The Center for Responsive Politics, at http://www.opensecrets.org/ (last visited Mar. 21, 2004) (on ªle with the Harvard Environmental Law Review). 29 Regarding federal pollution control regulation aimed at industrial sources of pollu- tion, the basic claim made in the public choice literature is that such regulation may be understood as an effort by larger, established ªrms to secure a competitive advantage in the marketplace. Pollution control regulation, it is argued, favors larger, established ªrms in 2004] Existence Value and Federal Preservation Regulation 355 trol/industrial source regulation,30 and homeowners’ covert efforts to boost their property values through local environmental, open-space regula- tion31). two ways: (1) such regulation invariably grandfathers existing sources from the strictest variant of any new requirements (as in the power plant example discussed above), and (2) such regulation imposes certain ªxed costs that, for larger facilities and ªrms, represent a lower percentage of total costs and hence a lesser burden than they do for smaller facili- ties and ªrms. See Richard L. Revesz, Federalism and Environmental Regulation: A Public Choice Analysis, 115 Harv. L. Rev. 553, 572–75 (2001) (summarizing public choice lit- erature). See also Bruce Yandle, Public Choice and the Environment: From the Frying Pan To the Fire, in Political Environmentalism: Going Behind the Green Curtain, supra note 28, at 31–60; Jonathan H. Adler, Clean Politics, Dirty Proªts: Rent-Seeking Behind the Green Curtain, in Political Environmentalism: Going Behind the Green Curtain, supra note 28, at 1–30. The reasoning of the interªrm competition account of pollution control regulation cannot be extended to natural preservation regulation. Natural preservation regulation such as the federal ESA does not typically grandfather existing ªrms or existing operations. A ªrm may or may not be prohibited from ªlling ecologically sensitive wetlands under current federal regulations and practice, but that outcome does not depend on whether the ªrm has been ªlling wetlands for a long time. Nor does preserva- tion regulation generally have any obvious built-in bias in favor of large ªrms relative to small ones. 30 In the standard race-to-the-bottom account of federal pollution control regulation, ªrms pit states against one another by threatening to leave or not locate in any state that does not better the other states in regulatory laxity. Federal regulation can lessen or even eliminate the race-to-the-bottom. With the protection of speciªc federal pollution control requirements, 3M (for example) has no incentive to threaten to leave Minnesota for Geor- gia because the same basic standards, the same basic technologies—federal standards, feder- ally dictated technologies—would apply in Georgia. Challenging the conventional reason- ing that races-to-the-bottom are “bad things” to be avoided, Revesz has argued that the adop- tion of federal law at the behest of certain states that want tough pollution control stan- dards but do not want to risk losing ªrms (and hence jobs) is, in effect, a denial to the states that care less about pollution of a competitive advantage to which they should be entitled. See generally Richard L. Revesz, Rehabilitating Interstate Competition: Rethink- ing the “Race-to-the-Bottom” Rationale for Federal Environmental Regulation, 67 N.Y.U. L. Rev. 1210 (1992). As Revesz stresses, we typically regard competition as a healthy phenomenon that leads to welfare maximization. Id. at 1211–12. Revesz’s normative cri- tique of federal pollution control laws, even if accepted as persuasive, does not seem to have much relevance to the context of federal preservation regulation driven by existence value concerns and focused largely on land use. Most of the states whose members of Congress oppose drilling in the arctic wilderness have no capacity to attract oil exploration; there is no oil to be found in Massachusetts. There is no evidence that the states whose elected ofª- cials have supported federal regulation of isolated wetlands such as prairie potholes are re- sponding to any particular, organized or organizable group of ªrms threatening to leave or to avoid locating in the state unless unrestricted development of isolated wetlands is per- mitted. 31 A very common argument against local open-space zoning is that it represents an ef- fort on the part of people who have already built houses to maintain or raise the value of their properties by restricting the overall pool of land available for future development. See William A. Fischel, Regulatory Takings: Law, Economics, and Politics 220–23 (1995) (discussing evidence that such zoning raises housing prices). One might imagine a similar argument being made against federal preservation regulation—that is, that federal preservation laws are illegitimate efforts to boost the value of current owners’ property holdings by removing some open land from the pool of land available for development. Many supporters of federal preservation regulation, however, live hundreds or thousands of miles from proposed or current sites of such regulation. In the case of the Alaska wilderness, all the Congressional supporters of a continued bar on drilling live hundreds or thousands of miles away. It is probably fair to say that the overwhelming majority of the supporters of 356 Harvard Environmental Law Review [Vol. 28 III. The Welfare Maximization Argument for Existence-Value Regulation Federal preservation regulation premised on existence-value concerns has the potential to maximize aggregate social welfare, and can be justiªed on that basis. In conventional economics, regulation is conceptualized as a welfare-maximizing solution to externalities under certain circumstances. As a logical matter, this conceptualization should apply as much to losses in existence value as to physical spillovers. Indeed, as discussed below, regula- tion might be an even more attractive solution, from an economic efªciency perspective, for addressing losses in existence values than it is for ad- dressing physical spillovers. As a preliminary matter, it may be helpful to review the propositions that are the basis of the standard economic account as to when regulatory intervention to address externalities maximizes welfare. First, when ªrms produce costs that are not reºected in the price of their products, they will tend to ignore those costs in setting production levels and choosing produc- tion processes. To borrow from a famous case, Boomer v. Atlantic Ce- ment Co.,32 the owners of a cement factory that produces noise and smoke are not likely to be concerned about the nuisance costs borne by the neigh- bors since those costs do not affect the production costs of the cement. Second, in assessing which result produces the greatest aggregate wel- fare, the relevant question is not only whether the cost bearers (in our example, the neighbors) lose more utility from the activity as currently conducted (making cement with noise and smoke) than the cost generators (the factory’s owners) gain from that activity, but also which actor could most cheaply “avoid” the problematic aspects of the activity (the noise and smoke and their detrimental effects). One would want to know how much it would cost the factory to make cement without smoke and noise (if that is possible), and how much it would cost the neighbors to avoid the det- rimental effects of smoke and noise, either by moving or by engaging in self-protective measures such as better air conditioning or protective eye gear. Third, in the presence of high transaction costs associated with bar- gaining among cost bearers (the neighbors), among cost generators (the factory owners), and/or between cost generators and cost bearers, we cannot the adoption of the migratory bird rule protecting isolated wetlands or the Endangered Species Act restriction on old-growth harvests do not own property bordering prairie pot- holes or other isolated wetlands or old-growth forest. The potential for a blending of exis- tence value and home-value concerns in federal resource conservation disputes is likely to increase, however, as “sprawl” accelerates, especially in the West and South. See Audrey Hudson, Plan to Set Aside Land in Arizona for Owls Slammed; Ranchers, Builders Hit Project, Wash. Times, Dec. 15, 2002 at A2 (noting that, with the rise of sprawl, the physi- cal distance between developed areas and endangered species habitat is diminishing); Eddie Nickens, Paved Over and Pushed Out, 39 Nat’l Wildlife, Aug./Sept. 2001 at 36. 32 257 N.E.2d 870 (N.Y. 1970). 2004] Existence Value and Federal Preservation Regulation 357 expect bargaining to result in the allocation of entitlements that is wel- fare-maximizing.33 Consequently, government regulation at the state or local level may be necessary to achieve the welfare-maximizing result when the cost generators and cost bearers are both located within the same state or locality, and federal regulation may be necessary when the cost genera- tors and cost bearers are located in different states. The leading texts in environmental economics and law and economics all contain these or variants of these propositions, but they do not extend these propositions from the physical spillover context34 to the context of losses in existence value.35 Once one does extend these propositions, it be- comes clear that there are several reasons why regulation might be more readily justiªed in the context of interstate losses in existence value than in the context of physical spillovers across state lines. First, the “victims” of physical spillovers sometimes can avoid the costs associated with the spillovers through unilateral action (e.g., by ªltering contaminated water or air or by moving further away from the source of contamination), but unilateral avoidance is never feasible for those who would suffer losses in existence value as a result of the destruction of natural resources. Sec- ond, the “victims” of physical spillovers often are conªned to a contained geographical area because of the spatial dimensions of the spillover, but existence value losses have no inherent geographic limit and, as a result, negotiations regarding existence value losses may involve greater num- bers of parties and greater transaction costs than negotiations regarding physical spillovers. Finally, negotiations regarding existence value losses are more likely than negotiations regarding physical spillovers to run afoul of the norms that one should not pay a wrongdoer to stop committing a wrong and that concessions in bargaining should be reciprocal. The follow- ing Part uses two recent controversies to elaborate on these reasons. 33 There is universal agreement regarding this proposition. What is contested is whether, even in the absence of signiªcant transaction costs, efªcient allocations of resources will result regardless of the distribution and/or forms of legal entitlements, as the Coase Theo- rem predicts. See, e.g., Lucian Arye Bebchuk, Property Rights and Liability Rules: The Ex Ante View of the Cathedral, 100 Mich. L. Rev. 601, 605–06 (2001) (arguing that the prop- erty and liability rule entitlements will yield different levels of efªciency even in the ab- sence of transaction costs); Steven G. Medema & Richard O. Zerbe, Jr., The Coase Theo- rem, in Encyclopedia of Law and Economics 836 (Boudewijm Boukaert & Gerrit De Geest eds., 2000) (considering a range of critiques of the correctness and/or relevance of the Coase Theorem). 34 Almost all of the texts I reviewed employ an example of a physical spillover such as air or water pollution from a stationary source to illustrate these propositions. Cooter and Ulen, for example, employ the example of “a factory located upstream from a populous city [that] dumps toxic materials into the river as a by-product of its production process.” Robert D. Cooter & Thomas S. Ulen, Law & Economics 41 (2000). 35 Many texts limit their discussion of existence value (if any) to the calculation of natural resource damages under certain federal statutes governing liability for oil spills and similar accidents (as in the Exxon Valdez litigation). Richard Posner’s discussion of the economics of federalism in his enormously inºuential treatise makes no mention of exis- tence value. See Richard A. Posner, Economic Analysis of Law 665–80 (6th ed. 2003). 358 Harvard Environmental Law Review [Vol. 28 A. Midwestern Power Plants and Old-Growth Forest The Clean Air Act of 1970 and 1977 grandfathered existing power plants from certain very strict pollution control requirements applicable to “new sources” of pollution.36 It was widely predicted that the plants already in operation in 1977—many of which were old even then—would close in a few years. But because the grandfathered status under the Act allows ªrms to avoid substantial pollution control costs, a number of ªrms have kept old plants in operation through a program of aggressive “mainte- nance” and repairs.37 Environmental groups claim that such “maintenance” is tantamount to the construction of a new source and thus should be subject to the Act’s strict pollution control requirements for new sources.38 A number of the oldest, dirtiest plants in dispute are located in the in- dustrial Midwest, and a substantial portion of the sulfur-dioxide and ni- trous-oxide pollution they generate migrates to the Northeast and intensiªes smog-related problems there. The Northeastern states have pushed for the classiªcation of the Midwestern plants as new sources. The Clinton Ad- ministration agreed with this position, but the Bush Administration re- versed course, proposing a rule that would allow even plants that engage in substantial overhauls to avoid new source status. The Northeastern states have sued the federal EPA, claiming that the Bush Administration’s posi- tion violates the terms of the Clean Air Act.39 The states of the Paciªc Northwest—Washington and Oregon—are home to the most extensive old-growth forests in the United States. A range of species, and not just the spotted owl, are adapted to old-growth forests, and have been threatened by dramatic declines in the acreage of old-growth forest. Old-growth trees provide highly valuable timber (on a per-tree basis). Timber companies, however, cannot afford to wait for the genera- tion of new old-growth forest, so their consistent practice has been to clear-cut old-growth forest and re-forest, if at all, with trees designed for harvest in a short time. A substantial number of federal restrictions have been put in place in order to preserve the Paciªc Northwest’s old-growth forests. Given the geographic distribution of costs and beneªts, it is easy to un- derstand why politicians in the Midwestern and Northeastern states might differ regarding upgrades in pollution control systems in Midwestern power plants, and why politicians in the Paciªc Northwest and those outside the region might differ regarding restrictions on the harvesting of old-growth timber.40 In both the case of Midwestern plants’ generation of power without 36 See 42 U.S.C. §§ 7479(2)(c), 7479(3), 7501(3), 7501(4), 7503(a)–(c), 7602(j). (2002). 37 Bruce Barcott, Changing All the Rules, N.Y. Times, Apr. 4, 2004 (Magazine), at 38. 38 Id. 39 See Eric Pianin, New Pollution Standards Prompt Suit; 9 States Challenge U.S. De- cision to Relax Rules, Wash. Post, Jan. 1, 2003, at A1. 40 I am simplifying matters for expositional purposes. The debate within Oregon and 2004] Existence Value and Federal Preservation Regulation 359 modern pollution controls and the case of harvesting of old-growth tim- ber in the Paciªc Northwest, the activity generates costs both within and without the region where the activity is located. Dirty Midwestern plants contribute to poor air quality in the Midwest and in the Northeast; people in the Paciªc Northwest and outside that region care about old-growth trees and lose existence value when they are destroyed. But the primary beneªts of power generation without pollution controls and old-growth logging are regionally concentrated. The absence of pollution controls in Midwestern plants allows Midwestern utilities to charge somewhat lower prices for electricity than they otherwise would, and those lower prices may translate into more jobs in the local economy. The harvesting of old- growth timber in the Paciªc Northwest, at least in the short term, sup- ports jobs and generates tax revenue for localities.41 In the absence of federal regulation, the “victims” of the dirty pro- duction of electricity who live outside the Midwest and the “victims” of the destruction of old-growth forests who live outside of the Paciªc North- west have two possible means of avoiding the costs or harms at issue. First, they could attempt to avoid those costs unilaterally by taking self- protective measures.42 Second, the “victims” could attempt to negotiate an agreement whereby they would pay the utilities or lumber harvesters to prevent the harm.43 As described below, however, self-protection is never a plausible option in the context of existence-value losses, such as losses associated with the destruction of old-growth trees. Moreover, the pros- pects for successful bargaining are not high in either the case of physical Washington regarding forestry has been intense and complex. There are clearly many peo- ple within the Paciªc Northwest—including prominent politicians—who strongly support preservation of the old-growth forests and believe that the beneªts of preservation to peo- ple within the region far exceed the costs. See, e.g., Robert McClure, Renewed Effort Aims to Save Old-Growth Timber on Federal Land, Activist Rally for Old Growth, Seattle Post-Intelligencer Reporter, Oct. 15, 2001. 41 In the short term, until the old-growth forests are depleted, there may be diffuse beneªts across the country in the form of somewhat lower prices for timber and wood products than would obtain under a ban on old-growth harvest. How environmental re- strictions affect the prices individual consumers pay for commodities such as home heating fuel and wood construction housing is a complicated, highly contextual question. For ex- ample, many factors other than environmental regulation affect timber prices in the United States, including market demand domestically and abroad and import restrictions on for- eign timber. See, e.g., Stabilizing Is Key Word in Harvest of Timber, Commercial Appeal, Dec. 24, 2002, at DS3 (discussing effect of Canadian timber imports and trade negotiations on timber prices); Ira Breskin, Rayonier’s Fireboard Plant Up for Sale, Daily Deal, Dec. 12, 2000, at M and A (discussing effect of demand for housing on timber prices). 42 From a welfare-maximization perspective, self-protection would be the efªcient out- come if the costs of self-protection were less than the costs the “victims” would bear if nothing were done to change the status quo, and less than the costs of new pollution con- trols in the Midwest and the costs of a ban on old-growth harvests in the Paciªc Northwest. 43 Negotiated agreements of this sort would be welfare-maximizing outcomes if the costs of pollution controls and an old-growth harvest ban were less than the costs “victims” would bear if nothing were done to change the status quo, and less than the costs of unilat- eral self-protection measures that the victims could take (assuming there even were any such measures, which, as already indicated, is doubtful in the case of existence value losses). 360 Harvard Environmental Law Review [Vol. 28 spillovers or losses in existence value. The transaction costs and norma- tive obstacles to a negotiated solution in the old-growth/existence value case are likely to be particularly daunting. B. Unilateral Action To Avoid Costs In cases of physical spillovers, unilateral action to avoid the costs asso- ciated with the spillover is often at least a possibility. Northeasterners might be able to mitigate or avoid the perceived costs associated with Midwest- ern pollution by, for example, cutting pollution produced in the Northeast such that, even with the continued presence of pollution from the Mid- west, people in the Northeast would not suffer from any of the problems typically associated with “smog” (e.g., lung irritation, asthma, death, prop- erty damage, or aesthetic losses resulting from poor visibility). Similarly, people in a state whose groundwater supply has been contaminated by pollution emanating from another state can avoid the costs associated with groundwater contamination by switching to other sources of drinking water. Unlike losses associated with physical spillovers, existence-value losses can never be avoided, at any cost, by anyone but the party with actual physical control of the resources at issue. Those who would lose existence value as a result of the destruction of resources far away, in other states, have no concrete actions available to them that would lessen or eliminate their losses in existence value in the event that the resources at issue are in fact destroyed. What can people in (say) New York and California who derive value from the existence of Washington old-growth forest possibly do unilaterally to avoid the loss in existence value that would result from the destruction of that forest? The more general point is this: in physical spillover settings, either the in-state generator of the cost or the out-of- state bearer of the cost may be the cheapest cost avoider, depending on the particular factual circumstances, but in the loss of existence value setting, the in-state generator of the cost (the would-be resource destroyer) is the only possible cost avoider. Thus, at least where the loss in existence value from natural resource destruction outweighs the gain from resource destruction, the welfare-maximizing outcome always is a restriction on resource destruction. Contrary to this view, since existence value losses are incurred only because some people attach existence value to certain resources, one might argue that the potential bearers of existence-value losses always can avoid those losses at no cost simply by changing their way of thinking.44 By 44 Similar arguments could be made if we re-cast the relevant costs as losses in amor- phous option value, rather than losses in existence value. On the one hand, one could argue that because amorphous options are just that—amorphous—the party who loses amorphous option value as a result of actions in another state will not know enough to set about at- tempting to mitigate or offset her losses. On the other hand, one could argue that because amorphous options are amorphous and not grounded in speciªc knowledge of how a re- 2004] Existence Value and Federal Preservation Regulation 361 contrast, losses such as losses in life due to poor air quality can only be avoided by real, concrete and unavoidably costly action. On some level, however, all preferences and tastes are mental constructs—a matter of how people think, rather than some extra-mental truth.45 Smog imposes costs on people because they value the aesthetics of good visibility, the absence of lung irritation, and the longer median lifespan associated with good air quality. In theory, we could ask people to avoid the costs of smog by chang- ing their thinking about aesthetics, about the experience of lung irritation, even about the desirability of long life. But we do not do so because in the welfare-economics tradition, people’s tastes and preferences and hence identiªcation of actions or inactions as imposing costs and beneªts are (generally) taken as given for the purposes of assessing the effects of different courses of conduct on aggregate welfare. If we are to take peo- ple’s preferences and tastes as given with respect to smog, and not ask them to change their understanding of smog as a cost-imposing phenomenon, then it is hard to see how we can justify taking a different approach with respect to people’s preferences regarding the continued existence of old- growth forests. C. Negotiated Agreements To Avoid Costs In the context of interstate air pollution emanating from the Midwest, the transaction costs of organizing all the affected states and then achieving a bargaining solution among them are likely to be high even if we assume that state political actors faithfully represent the interests of their con- stituents and try in good faith to reach negotiated solutions.46 In intra- group negotiations among the Midwestern states as to how much each state would require from the Northeastern states in order to agree to pol- lution reductions, each state is likely to overstate the costs it would bear by having its ªrms reduce pollution, or at least be suspected of doing as much by the other members of the group. Similarly, intragroup bargain- ing among the Northeastern states may unravel because each state will, or will be suspected of, understating how much it would beneªt from pollution reductions and hence how much it would be willing to contrib- source will be of use, they are primarily a psychological phenomenon, a matter of attitude toward the unknown. Hence losses in amorphous option value can be overcome—avoided— with nothing more than a change in thinking toward the unknown. 45 See Louis Kaplow & Steven Shavell, Fairnesss Versus Welfare 19 (2002) (“The only limit on what is included in well-being is to be found in the minds of the indi- viduals themselves.”). 46 Still, while high, the transaction costs involved in reaching and implementing a bar- gaining solution certainly are less when states can undertake the bargaining and imple- mentation than when bargaining and implementation is left to the (many) individuals and ªrms with a stake in the conºict. State governments include pre-existing (that is, pre-bargaining) institutions with the authority and apparatus to collect money on threat of force, to impose restrictions on ªrms, and to levy ªnes and other penalties for misconduct or cheating by ªrms. 362 Harvard Environmental Law Review [Vol. 28 ute to the total sum to be offered the Midwestern states. Intergroup bar- gaining—bargaining between the Midwestern states as a group and the Northeastern states as a group—is also likely to break down.47 Even if the two groups could agree on the amount the Northeast should pay the Mid- west, a deal may elude them because of the difªculties in deªning mecha- nisms and institutions to monitor compliance and penalize noncompliance. The best evidence of the enormity of the transaction cost obstacles to transboundary water and air pollution agreements is that, although such pollution is commonplace throughout the world and is a source of ongo- ing tensions among countries and among provinces of the same country, instances of binding agreements addressing transboundary pollution are few. Of the agreements that have been reached, most involve only a few sovereigns and pollution patterns that are symmetrical—that is, the sov- ereigns involved both produce and receive pollution of roughly the same sort.48 The absence of agreements involving large numbers of sovereigns supports the general view in the bargaining literature that the likelihood of bargaining breakdown increases with the number of participants in the bargaining process.49 The absence of agreements involving one-way, non- reciprocal pollution may reºect the power of a widely accepted norm ac- cording to which no sovereign has the right, morally, to impose pollution on another.50 Given this widely accepted norm, it may be impossible for leaders of a country that is the “victim” of one-way, non-reciprocal pol- 47 In such bargaining, the Midwestern group of states may be tempted to exaggerate the costs of new pollution controls, and the Northeastern group may be tempted to over- state the value of reduced pollution. Even if the Midwestern and Northeastern groups do not engage in strategic bargaining, the negotiations may fail because each side may suspect the other of posturing and misrepresentation. 48 See Thomas W. Merrill, Golden Rules for Transboundary Pollution, 46 Duke L.J. 931, 933, 986 (1997) (explaining that “only a few” international agreements address trans- boundary pollution, most such agreements lack “substantive limitations on polluting activ- ity,” and “most of the examples of meaningful regulation of transboundary pollution that exist relate to pollution of boundary waters” and thus involve “elements of . . . reciprocal transboundary pollution”); Daniel C. Esty, Toward Optimal Environmental Governance, 74 N.Y.U. L. Rev. 1495, 1513 (1999) (explaining that “[i]n the absence of . . . shared envi- ronmental resources that create a sense of reciprocity . . . the difªculty of getting an agreement . . . becomes nearly insurmountable”). 49 See generally Russell Korobkin, Negotiation Theory and Strategy 329 (2002) (explaining that more parties “means a more complicated negotiation process” and “additional strategic complexities”); Clayton P. Gillette, The Exercise of Trumps By Decentralized Governments, 83 Va. L. Rev. 1347, 1373–74 (1997) (arguing that the potential for hold- outs increases with the number and heterogeneity of the parties to the negotiation). 50 Principle 21 of the Stockholm Declaration for example, provides that “States have, in accordance with the Charter of the United Nations and the principles of international law . . . the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction.” Stockholm Declaration of the United Nations Conference on the Human En- vironment, June 16, 1972, 11 I.L.M. 1416, 1420. See also Merrill, supra note 48, at 950 (explaining the principle that one country may not pollute another is a “consensus [ele- ment] of today’s customary international law”). 2004] Existence Value and Federal Preservation Regulation 363 lution by another country to justify to themselves and their constituents paying the other country to end the pollution.51 The transaction costs of bargaining regarding transboundary losses in existence value are likely to be equal to—or even greater than—the trans- action costs of bargaining regarding transboundary air and water pollution. In the context of air and water pollution, the area that is adversely af- fected is often geographically limited: we know, for example, that air quality in California, because of dominant wind patterns, is not signiªcantly af- fected by the Midwestern power plants. But losses in existence value are not tied to—and hence not limited to—wind or river ºow patterns, or any other geographical constraint. The absence of any necessary geographic limits to existence-value externalities means that the number and diver- sity of states involved may be much greater than in the air and water pollu- tion context, and the prospects for successful bargaining dimmer as a conse- quence. Of course, it is possible that losses in existence values may be heav- ily concentrated in only one or a few states. But the available data suggests otherwise. As a proxy—admittedly a very rough one—for the geographic distribution of those who derive existence value from natural resources within the United States, I employ the membership of three national envi- ronmental groups: Friends of the Earth, the Natural Resources Defense Council, and the National Wildlife Federation. Each of these groups advo- cates for the preservation of natural resources located throughout the country, including old-growth forests in the Paciªc Northwest. For each group I collected a state-by-state breakdown of national membership in percentage terms for the year 2000. The middle column in Figure One re- ports the range among the three groups for the percentage of the national membership that resides in each state. The right-hand column in Figure One reports the percentage of the national population that resides in each state. The geographical distribution of members in the three groups sug- gests that existence-value concerns are held by people throughout the country. Each group has members in every state, and the top ªve states in terms of membership constitute less than ªfty percent of the total mem- bership of each group. Although a number of states have memberships disproportionate to their share of the national population, suggesting dis- proportionate strength or weakness of existence-value concerns in certain states, many states have memberships in proportion with their share of the national population.52 51 See Ward Farnsworth, Do Parties to Nuisance Cases Bargain After Judgment? A Glimpse Inside the Cathedral, 66 U. Chi. L. Rev. 373, 400–02 (1999) (explaining that the absence of bargaining among parties in nuisance cases may be due to concerns that offering money in return for permitting perceived nuisances to continue is akin to “bribery”). 52 Voting patterns in Congress are largely consistent with the pattern of support sug- gested by the membership breakdown of the three environmental groups. In Congress, there is unusually strong support for federal programs to preserve natural resources among mem- 364 Harvard Environmental Law Review [Vol. 28 Figure One State Percentage of National Membership (range for three groups) Percentage of U.S. Population Alaska .2–.27% .2% Alabama .47–.8% 1.6% Arkansas .37–.6% .9% Arizona 1.88–1.9% 1.8% California 12.2%–18.97% 12.0% Colorado 2.2–2.76% 1.5% Connecticut 1.99–2.0% 1.2% District of Columbia .2–.37% .2% Delaware .3–.4% .3% Florida 5.27–6.3% 5.7% Georgia 1.46–1.97% 2.9% Hawaii .57–.8% .4% Iowa .72–1.0% 1.0% Idaho .4–.41% .5% Illinois 4.01–4.7% 4.4% Indiana 1.31–1.9% 2.2% Kansas .62–.8% 1.0% Kentucky .64–.9% 1.4% Louisiana .42–.6% 1.6% Massachusetts 3.0–3.73% 2.3% Maryland 2.44–2.7% 1.9% Maine .7–.86% .5% bers from the Northeastern and west coast states, and unusually weak support among members from the South. See generally Sayeed R. Mehmood & Daowei Zhang, A Roll Call Analysis of the Endangered Species Act Amendments, 83 Am. J. Agric. Econ. 501 (2001) (ªnding this pattern, even controlling for party and ideological afªliations); League of Conservation Voters, National Environmental Scorecards (last visited Mar. 1, 2004), at http://www.lcv.org/scorecard (documenting the same pattern in year-by-year voting score- cards). 2004] Existence Value and Federal Preservation Regulation 365 Michigan 3.05–3.8% 3.5% Minnesota 1.87–2.0% 1.7% Missouri 1.38–1.8% 2.0% Mississippi .2–.4% 1.0% Montana .3–.43% .3% North Carolina 2–2.4% 2.9% North Dakota .09–.1% .2% Nebraska .31–.5% .6% New Hampshire .8–.82% .4% New Jersey 3.44–4.0% 3.0% New Mexico .6–.92% .6% Nevada .59–.7% .7% New York 8.0–8.91% 6.7% Ohio 3.08–4.2% 4.0% Oklahoma .45–.7% 1.2% Oregon 1.5–2.53% 1.2% Pennsylvania 4.53–6.0% 4.4% Rhode Island .46–.5% .4% South Carolina .64–1.0% 1.4% South Dakota .11–.2% .3% Tennessee .95–1.2% 2.0% Texas 3.2–3.8% 7.4% Utah .4–.52% .8% Virginia 2.47–3.2% 2.5% Vermont .5–.66% .2% Washington 2.4–3.64% 2.1% Wisconsin 1.99–2.5% 1.9% West Virginia .33–.5% .6% Wyoming .19–.2% .2% 366 Harvard Environmental Law Review [Vol. 28 Even if all the other obstacles could be overcome, normative objec- tions might well undermine any multi-state agreement regarding resources such as old-growth forests. Just as some people believe it is wrong for one state to permit its ªrms to pollute another state, some people believe that it is wrong for a state to permit its ªrms to destroy natural resources, at least non-reproducible or rare resources.53 This normative commitment, what- ever one may think of its merits, complicates any effort at a bargaining solution: if those who value the existence of natural resources most highly are also those most likely to believe that “paying off” parties such as timber companies or timber states is morally wrong, and if those people there- fore refuse to contribute to “payoffs,” then it is unlikely that the timber companies or timber states will ever receive an offer in the context of multi- state bargaining that reºects the true loss in existence value that would result from the destruction of old-growth forests.54 In the context of physical spillovers, sometimes the polluted state is also a polluting state, so any normative objection to negotiated solutions 53 For example, some environmentalists strongly opposed the deal struck in 1999 whereby the federal and California state governments committed $380 million to purchase an area of redwoods in Northern California’s Headwaters Forest—some a thousand years old— because they believed that the landowner, Paciªc Lumber, had no moral right to destroy the redwoods. See Carolyn Lochhead, Feinstein Seizes the Middle Ground: Senator Finds Al- lies on Both Sides of Aisle, S.F. Chron., June 2, 2003, at A1 (describing how some envi- ronmentalists were “miffed” by Senator Feinstein’s support for the Headwaters deal); See also You Decide, Tex. Monthly, June 1999 (explaining that some environmentalists op- posed government purchase of the Headwaters). The normative objection to paying re- source owners to stop destroying resources also may account for some of the “protest” responses to contingent value surveys: some respondents in surveys asking how much they would be willing to pay to prevent the destruction of wildlife or wilderness protest the question, sometimes by stating a zero or inªnity ªgure, sometimes by refusing to answer at all, sometimes by openly arguing with the survey administrators. See generally Douglas R. Williams, Valuing Natural Environments: Compensation, Market Norms, and the Idea of Public Goods, 27 Conn. L. Rev. 365 (1995) (arguing that moral repugnancy may explain protests to contingent value surveys); see also Mark Sagoff, The Economy of the Earth: Philosophy, Law & The Environment 84–98 (1988) (exploring moral concerns raised by contingent value methodology, and arguing that protests to contingent value surveys reºect the moral judgment that resource valuation and preservation is properly a matter of public deliberation and regulation and not properly a matter of marketplace or simulated marketplace transactions). 54 The previous discussion is not meant to suggest that environmentalists cannot and do not use market transactions to secure the existence of natural resources. They plainly do, at times. In the absence of high transactions costs, however, we might expect to ob- serve more land, and in particular more expensive land, acquired for conservation pur- poses, as well as binding contractual agreements between environmentalists and industry/ property owners regarding land use practices on land that is not acquired. Moreover, to the extent that some environmental groups have been successful in land acquisitions, that suc- cess is due in part to the fact that they have negotiated against a backdrop of actual and threatened government regulation, and also in part due to the fact that they have been able to take advantage of a range of federal, state and local subsidies and other supports for the creation of natural preserves and habitat corridors. See Leigh Raymond & Sally K. Fairfax, The “Shift to Privatization” in Land Conservation: A Cautionary Essay, 42 Nat. Resources J. 599, 635 (2002) (concluding that “[w]e need to rely less on the idea that ‘public’ and ‘private’ alternatives form some kind of clear dichotomy of policy options, and more on the idea that most policies and resulting tenure arrangements are a blend of the two”). 2004] Existence Value and Federal Preservation Regulation 367 is muted. Two states with a common boundary and/or common resource and similar levels of urbanization and industrialization are likely to emit similar pollutant streams, and hence to pollute each other in a somewhat comparable fashion. Indiana and Illinois share a common resource—Lake Michigan—and have roughly similar patterns of urbanization and indus- trialization. Consequently, they emit similar pollutants into Lake Michi- gan (most notably a massive amount of sewer runoff): neither state is solely “the polluter” nor solely “the polluted.” The two states thus can enter negotiations without the impediment of one state viewing itself as “the innocent” and the other state as “the guilty,” and they can bargain on the basis of reciprocal concessions in the amount of pollution each contrib- utes to Lake Michigan.55 Losses in existence value, in contrast to physical spillovers, are not likely to be more salient among neighboring states than among states that are very far—and hence very different in physical environment—from one another. People in Massachusetts may suffer from losses in existence value from the destruction of pristine tundra in Alaska, but they do not and could not impose symmetrical losses in existence value on Alaskans who value pristine tundra: Massachusetts, after all, has no tundra. Accord- ingly, the people in Massachusetts who value pristine tundra may per- ceive themselves as wholly “innocent” of natural resource destruction and the ªrms and people in Alaska who wish to drill for oil in the tundra as wholly “guilty.” Bargaining between the states cannot proceed on the basis of reciprocal concessions because reciprocity typically “demands that one sort of action be reciprocated with a similar sort of action.”56 IV. The Nonmeasurability Objection to Existence Value Regulation Federal regulation to prevent interstate losses in existence value may be welfare maximizing in theory, but speciªc instances of federal preser- vation regulation premised on existence-value concerns may not be wel- fare maximizing in fact. According to some critics of existence-value regu- lation, there is no way to measure existence values, and hence no way to assure ourselves that regulation premised on existence-value concerns en- hances aggregate welfare.57 This argument builds on an indisputable fact: 55 See Robert C. Cialdini, Inºuence Science and Practice 22 (4th ed. 2001) (ar- guing that a strong norm exists in bargaining in favor of reciprocity, and also arguing that reciprocation “possesses awesome strength” and “can overpower the inºuence of other factors that normally determine” decision-making); Dean G. Pruitt & Peter J. Carne- vale, Negotiation in Social Conºict 122 (1993) (discussing the equal concessions norm in bargaining). 56 See Cialdini, supra note 55. 57 See Donald J. Boudreaux & Roger E. Meiners, Existence Value and Other of Life’s Ills, in Who Owns the Environment? 153, 158–61 (Peter J. Hill & Roger E. Meiners eds., 1998) (arguing that even if the problems with contingent value methodology could be 368 Harvard Environmental Law Review [Vol. 28 existence values are not market goods, and hence cannot be measured by marketplace transactions. We know how much people value a Honda Ac- cord because they repeatedly spend $20,000 for one; we do not know how much people value the continued existence of the Tooth Cave Spider58 as a species since there is no—and could be no—fully functional market in the purchase of that good, given the free-riding problems and other trans- actions costs that would be involved in any effort to organize and operate such a market. But it is not true that only market goods have values that can be meas- ured in some meaningful way. Proponents of the view that existence val- ues are not measurable ºatly reject efforts to gauge the value of natural resources by means of surveys in which respondents are asked how much they would be willing to pay to preserve resources. As discussed below, however, such contingent value (“CV”) surveys do capture something useful about existence values for natural resources—for many resources, such values are substantial. The federal political process, however, is the pri- mary response to the nonmeasurability objection: that process provides a reasonably good measure of the comparative value of preserving and de- stroying natural resources, and, if anything, probably underestimates the magnitude of existence-value preferences relative to preferences for en- gaging in activities associated with the degradation or destruction of natural resources. A. What Contingent Value Methodology Shows and Does Not Show In CV studies, researchers ask people to assign a value to a good that may or may not have conventional market value.59 The assignment process overcome, existence value valuations would be “economically invalid” because “[o]nly by connecting many people in a decentralized process of valuation”—that is, only by market valuation—“does useful valuation become doable”); Rosenthal & Nelson, supra note 8, (criticizing existence values as artifacts of the instruments purportedly used to solicit and measure them). 58 The endangered Tooth Cave spider is found only in certain caves within Texas. See GDF Realty Inv. v. Norton, 326 F.3d 622, 640–41 (5th Cir. 2003) (upholding as constitu- tional prohibitions on the destruction of the habitat of the Tooth Cave spider and ªve other species of endangered cave-dwelling invertebrates). 59 One of the criticisms of CV surveys is that the respondents sometimes are not aware of the existence of the resource in question before receiving the survey with its description of the resource and the threats to the resource. In this view, because most people would not know about (for example) caribou or express any existence value with respect to caribou in the absence of being told about the caribou and threats to their existence, most people cannot be understood as experiencing any welfare loss from the destruction of caribou. See Glenn C. Blomquist & John C. Whitehead, Existence Value, Contingent Valuation, and Natu- ral Resources Damages Assessment, 26 Growth & Change 573, 583 (1995) (addressing the argument that “no welfare change has occurred for unfamiliar respondents . . . even if [they] were educated by contingent market information and could behave rationally in contingent markets”). However, all preferences, including preferences relating to spillovers and losses of use, are based, in signiªcant part, on an interplay of pre-existing values and commitments, some longstanding, and the receipt of information provided to or made 2004] Existence Value and Federal Preservation Regulation 369 can entail stating a cash ªgure outright, or asking respondents to choose between or rank various options.60 The claim that CV studies are poorly structured ignores the evolution in CV research designs over time, including, most notably, increases in the amount of detailed background information provided to respondents regarding the good to be valued.61 CV surveys also now typically remind respondents of budget constraints and prompt re- spondents to consider the availability of substitutes for the good at issue. For example, one CV study employed the following reminder: “By agreeing to pay this amount of money to avoid this environmental change less money would be available for your other expenditures. Here is a list of some budget categories that people usually have. Which budget would your money come from?”62 More than 2000 CV studies have been completed, a signiªcant number of which have been directed toward the non-use or existence value of natural resources such as wildlife and wilderness.63 Several conclusions may be drawn from this now considerable body of scholarship. First, the published CV surveys ªnd that people—in the United States and elsewhere—do assign substantial value to the continued existence of some kinds of natural re- sources, notably relatively rare or threatened resources. Surveys regarding endangered species consistently show that the median respondent would pay a signiªcant amount of money each year to secure the continued preserva- tion of a species.64 According to CV survey results, people value both the available to the holder of those values and commitments. 60 This variant is sometimes called Choice Modeling or CM. CM can generate speciªc dollar ªgures for the willingness to pay for speciªc environmental goods, although in the case of CM “willingness to pay [is] indirectly recovered from people’s rankings, ratings or choices,” rather than directly provided by the survey respondent. Nick Hanley et al., Choice Modeling Approaches: A Superior Alternative for Environmental Valuation?, in Issues in Environmental Economics 185 (Nick Hanley & Colin J. Roberts eds., 2002). 61 See Richard T. Carson et al., Contingent Valuation: Controversies and Evidence, 19 Envtl. & Res. Econ. 173, 196–97 (2001) (arguing that “CV research has matured as a result of the spotlight that has been placed on it”); Nick Hanley & Clive L. Splash, Cost-Beneªt Analysis and the Environment (1993) 66–67 (arguing that “results from CVM [contingent valuation methodology] studies are heavily dependent on how well the study is designed, carried out and interpreted,” concluding that “CVM is a useful tech- nique for estimating economic values for some non-market resources,” and explaining that this “conclusion has been reached by (i) examining the results of individual CVM surveys; (ii) experimenting with the degree of repeatability of CVM results; and (iii) using other methodologies alongside CVM to value the same resource”). 62 See Ian J. Bateman et al., Economic Valuation with Stated Preference Techniques 143 (2002) (offering example of a variety of budget and substitutes reminders). 63 For helpful bibliographies of CV studies, see Hanley et al., supra note 60, app. I and II; UCLA Dept. of Economics, Recent Literature on Contingent Valuation Methods for Valuing Environmental Goods, Mar. 16, 2001, at http://www.sscnet.ucla.edu/ssc/labs/cameron/nrs98/ cvinv.htm (last visited Mar. 21, 2004) (on ªle with the Harvard Environmental Law Review). 64 Some CV studies have asked respondents how much they would be willing to accept to allow the destruction of a resource, rather than how much they would be willing to pay to prevent the destruction of the same resource. The willingness-to-accept (“WTA”) approach consistently produces much higher median results than the willingness-to-pay (“WTP”) approach. Because there is strong suspicion that even the WTP approach produces inºated results, the WTA approach has fallen into disfavor, although there are theoretical arguments in 370 Harvard Environmental Law Review [Vol. 28 preservation of famous species such as the spotted owl of the Paciªc North- west ($95 per household per year) and quite obscure species such as en- dangered minnows native to Wisconsin ($6 per household per year).65 These per-household survey results indicate very large nationwide valuations.66 Second, although there are a number of published articles concluding that CV surveys are not a reliable means of valuation because they pro- duce erratic, “irrational” results, no published article asserts that CV data exist that show that people do not place signiªcant value on endangered species, wilderness, or other natural resources. A great deal of money is at stake for large corporations in the politics of preservation regulation and in natural resource damages disputes that involve the accidental de- struction of natural resources. It is thus reasonable to assume that private funding has been available to explore whether CV studies can be struc- tured to generate de minimis or zero median valuations for wildlife and/or wilderness. The absence of any published accounts of research of this sort may reºect the failure of efforts to generate de minimis or zero median valuations. Third, CV survey results reºect a certain degree of internal logic or ra- tionality on the part of survey respondents, notwithstanding forceful claims and some thoughtful arguments to the contrary.67 Notably, in a relatively favor of the WTA approach. See Nick Hanley et al., Environmental Economics in Theory and Practice (1997) 364, 395–96 (discussing those arguments). 65 See Daniel Hagan et al., Beneªts of Preserving Old-Growth Forest and the Spotted Owl, 10 Contemp. Pol’y Issues 13 (1992) (reporting results for spotted owls in the Paciªc Northwest); Kevin J. Boyle & Richard C. Bishop, Valuing Wildlife in Beneªt-Cost Analy- ses: A Case Study Involving Endangered Species, 23 Water Resources Res. 943, 949 (1987) (reporting results for Wisconsin bald eagles and Wisconsin striped shiners). See also Thomas H. Stevens et al., Measuring the Existence Value of Wildlife: What Do CVM Estimates Really Show?, 67 Land Econ. 390, 395–96 (1991) (reporting survey results showing average willingness to pay bids of “between $10.62 and $75.31 for bald eagle preservation” and Atlantic salmon existence values of “$10 to $30 above the willingness to pay for ªshing licenses”). 66 See, e.g., Jonathan Rubin et al., A Beneªt-Cost Analysis of the Northern Spotted Owl, 89 J. Forestry 25, 27–28 (1991) (estimating the nationwide non-use value of north- ern spotted owls’ continued existence to be $1.48 billion per year); John Loomis & Earl Ekstrand, Economic Beneªts of Critical Habitat for the Mexican Spotted Owl: A Scope Test Using a Multiple-Bounded Contingent Valuation Survey, 22 J. Agric. & Resource Econ. 356, 365 (1997) (estimating the nationwide non-use value of the Mexican spotted owl’s critical habitat within the United States to be at least $1.8 billion per year). With very few exceptions, CV studies do not draw from a multi-state pool, and instead rely upon ex- trapolation from state-wide or even more geographically circumscribed samples in order to estimate nationwide values. In these extrapolations, researchers typically assume that both use and non-use values decrease in some linear fashion with geographic distance, but that blanket assumption is not tenable. One multi-state study, for example, found that, control- ling for other variables, respondents in Washington value programs to preserve California salmon populations as much as Californians do. See Jennifer Pate & John Loomis, The Effect of Distance on Willingness to Pay Values: A Case Study of Wetlands and Salmon in California, 20 Ecological Econ. 199 (1997). 67 I chose the words “a certain degree” carefully because, beyond a doubt, some CV studies have yielded results that seem less-than-wholly “rational.” See, e.g., Peter A. Dia- mond & Jerry A. Hausman, Contingent Valuation: Is Some Number Better Than No Num-
