Optimal Property Rights for emerging natural resources: a case study on Owning Atmospheric Moisture

Abstract

This Article critically examines the design of property rights for emerging natural resources through a case study on how utilization of atmospheric moisture is regulated among the fifty states of the United States. Building on the surprising finding that declaration of state ownership did not result in greater regulatory control or redistribution, this Article highlights a dimension of property rights design that has yet to receive concerted attention, namely the relative ease of future transition—whether to ownership or to control mechanisms. This Article explains how state property facilitates relatively easier and more holistic transitions and argues that state property can be an optimal ownership for emerging natural resources in which uncertainty surrounding the present resource utilization pattern foreshadows necessary adaptive change to property rights arrangements in the foreseeable near future. More broadly, the case study reveals how state property—properly stripped of the undeserving association with Socialism—still has an important role in the property rights literature.