Though many environmentalists blame markets for many of today's environmental problems, free-market environmentalists blame many of these problems on distortions of the market and the lack of markets. Government actions are blamed for a number of environmental detriments. The tragedy of the commons  is seen as a fundamental problem for the environment. When land is held in common, anybody may use it. Since resources are consumable, this creates the incentive for entrepreneurs to use common resources before somebody else does. Many environmental resources are held by the government or in common, such as air, water, forests. The problem with regulation is that it puts property into a political commons, where individuals try to appropriate public resources for their own gain, a phenomenon called rent-seeking. Tenure - Renters do not benefit from value accrued during their tenure and thus face an incentive to extract as much value as possible without conservation. Political allocation - Political information does not have the incentives that markets do to seek superior information (profit and loss). Though many participants provide input to governments, they can only make one decision. This means that governments create rules that are not well crafted for local situations. The government's strategy is that of anticipation, to hide from danger through regulations. A healthier society would use resilience, facing and overcoming risks. Perverse subsidies - Governments offer cross subsidies that distort price systems. This means that underconsumers and overconsumers are paying the same rates, so the underconsumer is overpaying and the overconsumer is underpaying. The incentive leads to more overconsumers and fewer underconsumers. Increased transaction costs - Governments may create rules that make it difficult to transfer rights in ways that benefit the environment. For example, in the western United States, many states have laws over water rights that make it difficult for environmental groups to purchase in-stream flows from farmers.
Though many environmentalists blame markets for many of today's environmental problems, free-market environmentalists blame many of these problems on distortions of the market and the lack of markets. Government actions are blamed for a number of environmental detriments. A misunderstanding of the tragedy of the commons , which is seen as a fundamental problem for the environment. When land is held in common, anybody may use it. Since resources are consumable, this creates the incentive for entrepreneurs to use common resources before somebody else does. Many environmental resources are held by the government or in common, such as air, water, forests. The problem with regulation is that it puts property into a political commons, where individuals try to appropriate public resources for their own gain, a phenomenon called rent-seeking. Tenure - Renters do not benefit from value accrued during their tenure and thus face an incentive to extract as much value as possible without conservation. Political allocation - Political information does not have the incentives that markets do to seek superior information (profit and loss). Though many participants provide input to governments, they can only make one decision. This means that governments create rules that are not well crafted for local situations. The government's strategy is that of anticipation, to hide from danger through regulations. A healthier society would use resilience, facing and overcoming risks. Perverse subsidies - Governments offer cross subsidies that distort price systems. This means that underconsumers and overconsumers are paying the same rates, so the underconsumer is overpaying and the overconsumer is underpaying. The incentive leads to more overconsumers and fewer underconsumers. Increased transaction costs - Governments may create rules that make it difficult to transfer rights in ways that benefit the environment. For example, in the western United States, many states have laws over water rights that make it difficult for environmental groups to purchase in-stream flows from farmers.
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