J.B . RUHLD AV I D D A N I E L S A L L E N C H A I R I N L AW

VA N D E R B I LT U N I V E R S I T Y L AW S C H O O LN A S H V I L L E , T E N N E SSE E , U S A

NATURAL CAPITAL AND THE RULE OF LAW

Second Asian Judges Symposium on Environment Dec. 3-5, 2013

Introduction

How to Protect Natural Capital

In Order to Protect Ecosystem Services

Groundwater recharge

Water supplySediment captureFlood controlBiodiversityWildlife HabitatRecreation

The Legal Challenge

Building the Law and Policy of Ecosystem Services

Context: The knowledge base (ecology, geography, economics) from which law must work

Current Status: The baseline of existing property rights, regulations, and social norms

Designing New Legal Principles: The choice of institutions and instruments to advance the new policies

Complex Ecology: Natural capital and its ecosystem services system are spatially and temporally complex

Unclear Property Rights: Lack of clarity about land and resource owners’ rights and obligations

Unclear Legal Authority: Uncertainty about agency and judicial authority to incorporate natural capital and ecosystem service values into decision making

THREE KEY CHALLENGES

COMPLEX ECOLOGYThe Entire Ecosystem Service

Delivery System Must Be Protected

1. Natural capital source

2. Service provision (time A)

3. Service delivery channel (time B)

6. Many end user contexts

4. Beneficiary sites at different distances

5. Service delivery(time C)

Wetlands

River Clean water for

farms and cities

Streams Time and Distance

PROPERTY RIGHTSEstablishing Rights and Duties

Who owns ecosystem services? Pollination? Groundwater

recharge? Flood control?What services must

landowners provide to the public? Duty to public?

What services must landowners provide to surrounding landowners? Minimum standards of

care?

PROPERTY RIGHTSRemedies

What are the remedies for destroying natural capital or interfering with ecosystem services? Private nuisance? Public nuisance?

What of misuse of public property? Public trust duties?

LEGAL AUTHORITYPotential Sources

ConstitutionsTreatiesLegislative

Statutes Administrative

Regulations and Policies

Law of Property, Torts, Contracts

LEGAL AUTHORITYInterpretation Questions

Constitutional terms are broad

Statutes pre-date awareness of natural capital

Undefined statutory termsUnclear boundaries of

agency discretionBalancing property rights

with new policies

LEGAL AUTHORITYChallenges for Courts

Establishing principles ofStandingPleadingEvidenceBurden of proofRemedy

BEGINNING AN EVOLUTION IN PROPERTY LAW?

Examples of Judicial Innovation in the U.S.

The Situation In the U.S.

Not much progress in public law forums:U.S. Constitution protects property rights but not the

environmentSome recent statutes enable natural capital markets

2008 Farm Bill and USDA Office of Environmental MarketsSome federal agencies have begun to use ecosystem

services as part of mitigation decisions 2008 US EPA and wetlands mitigation rule 2012 US Forest Service planning rule

But US state courts have begun to adjust common law property rights

Palazzolo v. State, 2005 WL 1645974 (Super. Ct. R.I., July 5, 2005):

Land developer sought to fill coastal pond to build homesState of Rhode Island allowed only one home to be builtDeveloper sued for taking of property without just

compensation Court denied taking claim, finding destruction of the pond

would constitute a public nuisance because the pond “actually filters and cleans runoff”

“This Court finds that the effects of increased nitrogen levels constitute a predictable (anticipatory) nuisance which would almost certainly result in an ecological

disaster to the pond.”

U. S. Common Law: Nuisance Doctrine

Avenal v. State, 886 So.2d 1085 (La. 2004)State of Louisiana sought to alter public water diversion

channelOyster farm leasing the area claimed taking of propertyCourt denied taking claim because state must manage the

area for the public trust

“The public resource at issue is our very coastline, the loss of which is occurring at an alarming rate. The risks involved

are not just environmental, but involve the health, safety, and welfare of our people, as coastal erosion removes an

important barrier between large populations and ever-threatening hurricanes and storms.”

U.S. Common Law: Public Trust Doctrine

Conclusions

Courts will play a significant role in the development of natural capital and ecosystem services in environmental law:Defining property rights, duties, and

remediesInterpreting constitutional, statutory, and

regulatory provisions Establishing access to and standards of

judicial reliefHelping to shape social and cultural norms

QUESTIONS?