Economics and the Environment

April 24, 2008

Going green

According to a popular website devoted to Earth Day, earthdaynetwork.com, approximately 1 billion people were expected to participate in Earth Day events across the globe. In many major cities, actors, activists, celebrities, and politicians took the opportunity to beseech citizens to ramp up their environmental efforts. In addition to holding rallies and beach cleanups, organizers urged people to contact their elected representatives and “ask them to enact tough and fair climate legislation.” 

In the United States, and other industrialized nations, environmental awareness has transcended this once-a-year event that was founded almost 40 years ago. Hoover research fellow Henry I. Miller notes, “As a result of the media and celebrity rich push to ‘go green,’ most Americans now identify themselves as environmentalists.”

Hoover research fellow Laura E. Huggins and coauthor (with Hoover senior fellow Terry Anderson) of the upcoming book Greener Than Thou: Are You Really an Environmentalist? points out that, in the United States, the pressure to adopt certain environmental beliefs and behaviors is enormous. “Red and blue politicians, Hollywood stars, business leaders, and even religious groups are all vying for the green spotlight,” Huggins states. “Whoever can outgreen the other gets to set the regulation; if you don’t jump on the bandwagon, you risk being left behind altogether.”

A research poll conducted by George Mason University’s Center of Excellence in Climate Change Communication Research appears to support Miller’s and Huggin’s claims. According to the survey, a full 68 percent of respondents reported using less energy in their households to reduce their impact on the environment. Sixty-two percent reported that they actively recycled household waste, and 52 percent said they bought and installed energy-efficient appliances and insulation products. Poll data also indicated that many people who don’t actively perform environmentally friendly tasks, such as taking public transportation, believe that such actions are valuable.

The downside to this trend, Miller explains, is that “a small number have embraced environmentalism with a religious fervor, basing their beliefs more on faith and dogma than on data and science.”

Huggins warns that, despite various claims and beliefs espoused by environmental activists and organizations, “it takes more than buying local, recycling everything, and banning plastic bags to become a true shade of green.” To truly become green, Huggins says, “the first step is admitting it will not be easy. The next step is to wade through the materials carefully before hopping on the green bandwagon to Earth Day.”

The green trend has not escaped the notice of business. Car manufacturers, clothing producers, energy companies—even the retail behemoth Wal-Mart—are all jumping on the green bandwagon, touting their commitment to helping the environment.

Growing (more) green

During his first presidential campaign, George W. Bush stated, “prosperity will mean little if we leave future generations a world of polluted air, toxic lakes and rivers, and vanished forests."

Environmental historians note that, in the United States, concerted conservation and environmental improvement efforts began in earnest during the Industrial Revolution. Concerns over polluted air, unsafe drinking water, substandard sanitation, and the resulting health problems spurred the government to enact and enforce water quality standards. During the same period, a growing number of individuals concerned about strip-mining and other land-stripping industrial practices began promoting and supporting conservation. In 1892, Congress created Yellowstone Park, the first national park, stating that it shall remain “unimpaired for future generations.” That same year, John Muir formed the Sierra Club, the nation’s oldest environmental nongovernmental organization (NGO). Later, President Theodore R. Roosevelt sometimes called the “first conservationist president,” passed legislation leading to the creation of forest reserves and wildlife refuges.

In the early 1960s, widely read publications such as Rachel Carson’s book Silent Spring increased awareness of the potentially devastating environmental ramifications of pollution and the indiscriminate use of pesticides and other potentially dangerous chemicals. In response to growing public concern and the demands of burgeoning environmental organizations that the government address water, air, and soil pollution, President Richard Nixon created the Environmental Protection Agency in 1970.

During the last decade in particular, environmental organizations have become more numerous and effective at attracting new members and sizable donations. Today, dozens of environmentally based NGOs lobby extensively for animal rights, climate change legislation, and a host of other causes often lumped under the umbrella of environmental concerns.

But not everyone is convinced that these organizations operate in the best interests of the environment. As Miller points out, all too often the actions of environmental organizations have “less to do with protecting the environment and more to do with an antipathy toward business, profits, and certain technologies.” Furthermore, Miller attests, “their efforts to achieve their own narrow vision of what constitutes a ‘good society’ are often inimical to protecting the environment.”

According to Huggins, despite the good intentions of leaders such Roosevelt and (sometimes) Nixon, “early conservation seeds grew into our current environmental leviathan.” Huggins explains that, “beginning with Roosevelt’s presidency and escalating in the 1970s, environmental policy has focused on top-down governmental regulations to solve environmental problems with little attention paid to the knowledge and skills of local resource users.”

Huggins worries that much of the time, effort, and dollars that the U.S. government invests in improving the environment fails to produce effective and cost-effective results. Many environmental regulations, Huggins believes, “have come with bloated bureaucracies spending billions of taxpayer dollars to achieve environmental gains that could have been realized for much less.”

Hoover senior fellow Victor Davis Hanson believes increased global interconnectedness and the demand for scarce resources have created a “new phase of global challenges.” Hanson contends that “no longer are the old environmental questions of pollution versus conservation so simply framed. Instead, the choices facing us, at least for the next few decades, are not between bad and good, but between bad and far worse--and involve wider questions of global security, fairness, and growing scarcity.”

Green laws

In the United States, environmental legislation has resulted in increased pollution regulations for businesses. According to a report released by the U.S. Census Bureau, in 2005 American businesses spent nearly $6 billion on pollution abatement costs, including recycling, capture, treatment, and prevention.

On an individual level, a multitude of polls report that citizens worldwide are worried about the effects of global warming, the negative consequences of energy use, the rising price of oil, and the depletion of natural resources.

Anderson argues that such fears are misguided. He explains that, owing to “a combination of market forces and technological innovations, we are not running out of natural resources. As a resource becomes scarcer, prices increase, thus encouraging development of cheaper alternatives and technological innovations. Just as fossil fuel replaced scarce whale oil, its use will be reduced by new technology and alternative fuel sources.”

Data released by the EPA illustrates how technological advances can result in better environmental outcomes. According to the EPA report, the United States is becoming more greenhouse gas efficient. Specifically, the EPA data report an overall decline in greenhouse gas emissions per dollar of gross domestic product generated since 1990.

Anderson sums up the symbiotic relationship between capitalism and environmentalism by stating, “Economic growth is not the antithesis of environmental quality; rather, the two go hand-in-hand if the incentives are right.”

Anderson adds that “societies with a strong rule of law, private property rights, and market systems have better environments than those that do not.” The development of free markets and enterprise, he believes, creates the demand and opportunity for resources to be directed toward the environment. Case in point is the former Soviet Union, says Anderson: “As more countries have adopted these institutions following the fall of the Iron Curtain, incomes and environmental quality have improved.” —Michelle Bussenius, Editor