View Transcript

Many people believe government rules and regulations are the only way to protect the environment.

But there are important benefits that properly structured market forces can bring to environmental policy. When the government and markets work together, it leads to effective solutions for sustainability.

For example, regulators once reduced the fishing season down to just six days in British Columbia, to protect their dwindling stock of halibut.

In response, fishermen invested in larger boats and overfished. The short season meant most fish sold on the market were frozen, not fresh.

After this failure, the government tried a different approach. It set a total allowable catch for the year and established a market for the right to fish.

It distributed those rights to fishermen, who could buy and sell them to anyone. And the season was increased to over 200 days, allowing them to fish when conditions were both safe and profitable.

By using market forces to make it in the fishermen's interest to have a healthy and sustainable population of fish, overfishing fell dramatically. And the next season, over ninety percent of halibut on the market was fresh.

The most effective environmental policies motivate the private sector to conserve what the public values.