“The largest threat to freedom, democracy, the market economy and prosperity is no longer socialism. It is, instead, the ambitious, arrogant, unscrupulous ideology of environmentalism.” —Czech President Vaclav Klaus
I agree with him on one point: environmental concerns and “free market” ideals don’t mix. If we wait around for markets and businessmen to take a longterm concern for the earth and environment, we’ll be waiting until cows grow wings (or until they’re phased out in favor of genetic meat grown on plastic scaffolds). I think our friend Vaclav is vying for The Most Idiotic Remark of 2008 Award.
But the reverse is also true…without markets you don’t have the resources to improve the environment.
In other words, there are basically two economies that are good for the environment: 1. abysmal poverty, where a country cannot even afford heaters and production of energy 2. extremely market oriented.
Its the ones in the middle that produce the most waste. Take China, India, and other developing countries vs the more industrialized like US, Canada and Europe. And since you can’t support many of the people alive today with the abysmal poverty economic system, if you want to improve the environment pushing for a more market oriented system is your best bet. Carbon taxes and other ‘negative externalities’ taxes within a market system are the most proven methods to clean the environment. Luckily for us, they also happen to be the best ones for improving the standard of living and eliminating poverty.
I’m actually open to the idea of creating market incentives to make corporations (as well as flesh-and-blood persons) take responsibility for the longterm outcomes of their actions. And it’s true that technological innovation is the only way that billions of large mammals like ourselves can share the planet without ruining it. The issue then becomes how to make businesses responsible, and the answer seems to be government regulation and bureaucratic oversight–not the most popular buzzwords among those who see the unfettered market as panacea to all problems.
I agree – like almost all economists, including the more market enthusiast – that government has a central role to play in protecting the environment. My only disagreement is not with principle, but implementation. The governments method tends to be either grossly inefficient or grossly destructive.
Just to give one example – a cap and trade system or a universal carbon tax is far more efficient than, say, a ban on SUV’s, or regulation of gas mileage. Yet politicians continue to favor the latter over the former…when the efficiency argument argues the opposite.
What’s the problem with regulating gas mileage? This strikes me as the one simple measure that the U.S. government could take that would have an immediate effect, would be pretty much painless, and would greatly extend the time we have to transition to different fuels. It seems to me that such moves could be justified from a consideration of ownership of resources. It strikes me as wrongheaded to rapidly deplete fossil fuels while leaving it up to our children to rapidly find alternatives. In a sense, young children and the unborn next generation have a right to these fuels as well. We shouldn’t leave them in a situation more dire and pressing than our own. Choosing to not drive around in giant SUVs (that are little more than a status symbol) is the least we could do.
Remember, I didn’t say regulate gas mileage vs nothing….I said regulate gas mileage vs “a cap and trade system or a universal carbon tax”…in other words, why single out gas mileage? It seems to me that anything that “rapidly deplete fossil fuels” should be discouraged, no? Gas mileage regulations only punishes one segment of that very large community…and very inefficiently.
All gas mileage standards do is force car companies to lower the weight of the vehicle, thereby reducing safety, see here and here (more people die!). On the other hand, a gas tax or a cap and trade auction will discourage all methods of “rapidly depleting fossil fuels” equally. The “all” and the “equally” is the important part here.
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