In a stunning turn of events, the Securities and Exchange Commission (SEC) has withdrawn its controversial proposal to charter Natural Asset Companies (NACs). This move is a triumph for economic freedom and property rights, echoing the concerns raised by the CPAC Foundation's Center for Regulatory Freedom. The proposed rule, initially issued on October 4, 2023, posed significant threats to federal land sovereignty, economic stability, and environmental integrity. Several weeks ago we brought this issue to your attention, and were on the verge of filing comments with the SEC. Our team had raised the issue with our coalition partners and had been talking about it extensively in the press.
Below are the issues we were raising in our comments:
Sovereignty and Management of Public Assets: A key issue with the proposal was the potential enrollment of federal lands, including national parks, into NACs. This posed a direct threat to the sovereignty and traditional management of these lands, potentially shifting control from public to private entities. CRF argued that such a shift would undermine constitutional principles and established frameworks of land management.
Environmental and Economic Implications: While NACs aimed to promote environmental conservation, the approach raised fears of commoditizing nature, overshadowing intrinsic ecological values. Economically, NACs could have diverted funds from traditional activities, impacting sectors like mining and agriculture, thus affecting local economies and communities.
Legal and Policy Concerns: The proposal challenged traditional property rights, requiring extensive changes to laws and regulations. CRF highlighted the complexity of this legal transition and its potential to conflict with existing frameworks, underscoring the importance of maintaining a balance between conservation goals and broader public interests.
National Security and Foreign Investment Risks: A significant concern was the potential for foreign control over American natural resources. CRF emphasized the national security risks associated with allowing foreign entities, especially adversarial nations, to influence public land management.
Conservation Easements and Private Property Rights: The authority granted to land trusts to enroll conservation easements into NACs without landowner consent was particularly alarming. This could have led to significant changes in land use and rights without proper oversight, infringing on private property rights and leading to potential constitutional challenges.
Ethics, Corruption, and the Dangers of Artificial Markets: CRF raised ethical concerns about the monetization of natural resources and the risks of corruption and mismanagement. Drawing parallels with historical examples like the Teapot Dome scandal, we warned against the creation of artificial markets, highlighting the risks of speculative bubbles and economic instability.
Impact on Income Inequality: The proposal was seen as a mechanism that could exacerbate income inequality, benefiting the wealthy while harming rural and urban poor communities. CRF stressed the need for equitable policies that do not exploit public lands for the benefit of a few.
The withdrawal of the SEC's proposal is a significant victory for those advocating for the preservation of economic freedoms, property rights, and public land sovereignty. The CPAC Foundation's Center for Regulatory Freedom commends this decision, highlighting the need for careful consideration and balanced approaches in future regulatory developments. This outcome not only protects public interests and environmental sustainability but also upholds legal mandates and respects economic realities.
