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May 6, 2004
Market forces & the environment
Nice to see Terry Anderson paying homage to the late Julian Simon in both name and principle in this column in The Sun News. Anderson, who heads PERC, makes the case for how markets can lead to rapid environmental improvements--and reminds us that prosperity is the friend, not the enemy, of the environment in many ways. There is also a caution in here about sacrificing economic growth for the sake of envuironmental protection--the net effect may be more harmful than helpful. Excerpt:
Hansen ends on an optimistic note, saying "the [new technologies] required to halt climate change have come into being with remarkable rapidity." This statement would not have surprised economist Julian Simon. He saw the "ultimate resource" to be the human mind and thought it to be best motivated by market forces.Because of a combination of market forces and technological innovations, we are not running out of natural resources. As a resource becomes more scarce, prices increase, thus encouraging development of less-expensive alternatives and technological innovations. Just as fossil fuel replaced scarce whale oil, its use will be reduced by new technology and alternative fuel sources.
Market forces also cause economic growth, which in turn leads to environmental improvements. Put simply, poor people are willing to sacrifice clean water and air for economic growth. But as their incomes rise above subsistence, "economic growth helps to undo the damage done in earlier years," said economist Bruce Yandle. "If economic growth is good for the environment, policies that stimulate growth ought to be good for the environment." ...
Global-warming policy analysts agree that greenhouse gas regulations such as those proposed at Kyoto would have negative effects on the economy. Therefore, as McCormick warns, we should take great care that regulations in the name of global warming "not kill the goose that lays the golden eggs."
A while back you argued that you thought climate change (and the science suggesting that portions of it were anthropogenically generated) was leftist-scare mongering and propaganda. Why the switch about discussing technology reducing the effects of climate change (which has the assumption that there is something to all the science you discounted)? I'm a bit confused about your stance on the science of global climate change.
also, even if 'market forces and technological innovation' will rush in to save us from impending disaster (as this simplified article is presented in your post), what about those parts of nature/the environment that aren't 'worth' anything in terms of resource use? With this logic, anything that isn't 'worth' anything is sanctioned to go exctinct, no?
finally, I was lost on the 'fossil fuel replacing scarce whale oil' arugment: if that is/was the case, why are their so many whales endangered still? seems like the article is papering over a great deal of complexity of how environmental problems get created in the first place and the fact that the re-bound time is not instant nor a garuntee once a replacement is found. organisims often have very complex relationships with their habitats (migration, etc) suggesting that there is much more that needs to go on before recovery occurs in things like whales (namely international environmental laws and conventions such as the Whaling Convention); might inter-governmental regulation have played a part in conservation of whales at the same time there was a switch away from whale oil? it's something to think about anyway.
To conclude here: why should poor people be forced (or even be in the position) to sacrifice clean water and air for economic growth? I bet if one was to survey a host of poor people (who exactly are we talking about anyway because geography/context matters here) they would say that both things matter if one was to lay out the 'unseen' consequences of water and air pollution.
One last point: if economic growth promotes the 'undoing' of environmental problems, why are more and more plant and animal species becoming endangered (sure better science and more people looking for these things) and places like the Central Valley of CA finding more and more groundwater contamination? there is not a simple connection of economic growth and environmental 'improvement'; there are many factors involved in this, not the least of which is geographic context. Costa Rica might be a case in point: very poor country but dedicated to maintaining nature reserves and an 'improved environment' (although keep rainforests does bring in lots of tourist money so their is some instramentality to their conservation).