Earth Day

It Takes Green to Make the Planet Greener

On Earth Day, it’s worth reflecting on the fact that planetary stewardship and affluence go hand-in-hand around the world. At the national level, the world’s poorest nations are environmental disasters, while the most affluent—the United States and Australia come to mind—are among the cleanest and most efficient.

We weren’t always this way. In the 1950s, the air in Pittsburgh resembled that of modern Beijing, where the rush for economic development demanded by the populace trumps air quality—for the time being. When a certain level of affluence is reached, as is beginning to occur in Beijing, people will be willing to pay to clean things up. 

In the United States, the scrubbing of Pittsburgh was just the beginning, followed by tighter regulation of water quality, increasing affluence and (“The Population Bomb” notwithstanding) a major drop in resident fecundity. Free Europe, a bit behind us economically, followed about ten years later. When they have the green, people get green.

Why Are Environmental Policy Conflicts So Intractable?

On Earth Day the op-ed pages remind me of “Groundhog Day.”  Environmentalists argue we need stricter environmental regulation.  Business interests argue such regulations reduce economic growth and cost the economy jobs.  Each also invokes “sound science” as an adjudicator of the conflict.  Environmentalists invoke “science” in the case of CO2 emissions and effects while business interests invoke “science” in the case of traditional pollution emissions.  Each year we wake up and the same movie plays out.

The scientific validity of people’s preferences plays no role in the market’s delivery of private goods.  Markets can and do supply organic lettuce regardless of whether it is really “better” for your health.  The scientific validity of people’s preferences is irrelevant.

Air- and water-quality environmental disputes are more challenging to analyze than the supply of organic lettuce for two reasons.  First, while property rights exist for lettuce, they often do not exist for air and water.   Thus, environmental politics involves continuous struggle over implicit property rights and the wealth effects that flow from such rights.  Second, both conventional air and water quality are “local” public goods (club goods) rather than private goods, thus individual differences in consumption, the primary method of reducing conflict associated with private goods, are not possible.  Instead, everyone’s varied preferences for environmental goods can only result in one jointly consumed outcome.

One possible impediment to the implementation of market-like solutions to air and water quality is that the initial ownership of property rights to air or water emissions not only has wealth but also efficiency effects.  That is those particular property rights (the right to a pristine environment) are so valuable relative to other assets that their initial allocation alters the willingness of people to pay for them and thus affects how much pollution exists.  In such cases the initial distribution is the whole ballgame because it determines the resulting air- and water- quality levels.

Oil Import Make Believe

A conversation with documentarian Robert Stone regarding Earth Day is featured today in The New York Times’s “Dot Earth” online column.  In the course of his conversation with the Times’s Andrew Revkin, Mr. Stone – who is quite alarmed about our reliance on foreign oil – asks:  “How many Americans know that we send about $800 billion to the Middle East every year for oil?”

Earth Day Links

Today is the 40th anniversary of Earth Day, a time to highlight and discuss ways to work toward a cleaner planet. Cato’s energy and environment research promotes policies that would help protect the environment without sacrificing economic liberty, goals that are mutually supporting, not mutually exclusive.

I Swear I’m Not Making This Up

From today’s Washington Post:

In another sign that the Department of Agriculture is embracing sustainable food, the agency today will unveil expanded plans for a People’s Garden that will include the entire six-acre grounds of the Whitten Building, the department’s neoclassic marble headquarters on the Mall.

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