Talks from the Hoover Institution

Presenters: Christopher Costello, distinguished professor of resource economics, Bren School of Environmental Science & Management, University of California—Santa Barbara; and Barton “Buzz” Thompson, Robert E. Paradise Professor of Natural Resources Law, Stanford University Law School. Chair: Dominic Parker, Ilene and Morton Harris Visiting Fellow, Hoover Institution. During his remarks, Christopher Costello articulated the advantages of markets over regulatory approaches to conservation and mitigation of harms inflicted on the environment. As an example, he described that the coastal waters of Santa Barbara are home not only to one of the most biodiverse maritime habitats in America but also to some of the busiest shipping lanes in the world. These circumstances have resulted in large container vessels causing harm to maritime wildlife while traveling to and from the Port of Los Angeles. Buzz Thompson provided another example of the feasibility of markets for environmental protection. Delivery of water from the Colorado River was weakening the flow of its stream and, in turn, endangering its fish population. He explained that limiting water to farmers would have been a daunting challenge. Understanding this reality, authorities instead paid farmers for access to their water rights so that they could strengthen the flow of the river. ___________________________ Click the following link for more information https://www.hoover.org/news/hoover-institution-hosts-conference-evaluating-market-driven-versus-regulatory-approaches

Presenters: Matthew Kahn, Provost Professor of Economics and Spatial Sciences, University of Southern California; and Maria Waldinger, Deputy Director of the Ifo Center for Labor and Demographic Economics. Chair: Terry Anderson, John and Jean DeNault Senior Fellow, Hoover Institution. Maria Waldinger provided a historical analysis of how societies have adapted to climate conditions. The oldest adaptation strategy was migration, she explained, which was more easily achieved when societies were nomadic and there were no political boundaries. More modern societies have adopted various processes to ensure their survival. She explained that crop failures were an omnipresent feature of European societies between the 14th and 19th centuries, a period of regional cooling that has been referred to as the “little ice age.” Matthew Khan outlined to the audience how markets can provide optimal incentives for adaption to climate change and reduce its economic effects. If enough people are facing a challenge, markets are the mechanisms that can empower entrepreneurs to produce and deliver innovations, Kahn maintained. ______________________ Click the following link for more information https://www.hoover.org/news/hoover-institution-hosts-conference-evaluating-market-driven-versus-regulatory-approaches

Presenters: Sanjai Bhagat, professor of finance at the University of Colorado–Boulder; and John H. Cochrane, Rose-Marie and Jack Anderson Senior Fellow, Hoover Institution. Chair: John Taylor, George P. Shultz Senior Fellow in Economics, Hoover Institution. Sanjai Bhagat explained that ESG investing principles and new standards of corporate social responsibility are not based on the fiduciary duty to maximize shareholder value. They are primarily centered, he said, on maintaining the well-being of societal stakeholders, including customers, employers, suppliers, and communities, as well as particular objectives such as environmental justice. John Cochrane asserted that the Security and Exchange Commission’s plan to enforce ESG investment practices isn’t based on “saving the planet” but on bending corporations to serve a particular political agenda. Echoing Bhagat, Cochrane said the ESG mandates would not maximize shareholder value. It would instead deny capital to companies, lower their asset prices, and curb returns to investors. ESG mandates would also pervert markets, destroy competition, and encourage some companies to rent-seek from the government. ____________________________ Click the following link for more information https://www.hoover.org/news/hoover-institution-hosts-conference-evaluating-market-driven-versus-regulatory-approaches

Presenters: Terry Anderson, John and Jean De Nault Senior Fellow, Hoover Institution; and Dominic Parker, Ilene and Morton Harris Visiting Fellow, Hoover Institution. Terry Anderson began the conference sessions by providing definitions for mandates and markets in their environmental contexts. Mandates (or rules) means that politics and administrations assign environmental objectives and use fixed command-and-control mechanisms to achieve them. On the other hand, markets are based on processes whereby resource owners respond to changing values. Dominic Parker examined the trade-offs of both market-driven and mandate approaches to environmental policies. He explained that there are cases in which mandates have proved effective, but that their policy outcomes should be analyzed with a nuanced perspective. ______________________________ Click the following link for more information https://www.hoover.org/news/hoover-institution-hosts-conference-evaluating-market-driven-versus-regulatory-approaches

Hoover director Condoleezza Rice introduced the conference by recalling the institution’s long history of researching environmental policy issues. Rice explained how the imitable George P. Shultz was a pioneer in advancing environmental solutions. In partnership with Tom Stephenson, former chair of the Hoover Board of Overseers, the late secretary of state formed a task force dedicated to identifying pragmatic policies aimed at strengthening America’s energy security while providing environmental protection. ___________________________ Click the following link for more information https://www.hoover.org/news/hoover-institution-hosts-conference-evaluating-market-driven-versus-regulatory-approaches