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Typical environmentalists get angry when they see a cheap concrete hotel spoiling a beautiful bay, a factory polluting a river, or trawler men destroying their livelihood by over fishing. Their blood pressure rises and they find it difficult to think clearly. They often blame the first person they see, the hotel builder, factory owner or fishermen, and demand that "something must be done". If persuasion and petitions don’t work they demand that the government, ban, licence or otherwise regulate the activity. If they calm down sufficiently to realise that there is a trade off, they may recommend state payments to the polluter to compensate them for restraint. If environmentalists like that have their way all of us will be impoverished as the economy strangles in red tape.
Some activist "environmentalists" go further and take the law into their own hands by destroying property and threatening polluters. If these "direct action environmentalists" have their way we’ll be impoverished even quicker by war.
iGreens are calmer. They care just as much about virgin beaches, clean rivers and maintaining fish stocks, but they care about people too, and understand enough economics to know that societies run by force or by planners don’t work. The experience of communism in its various forms shows they neither create wealth for their citizens nor maintain the environment. The following are some iGreen thoughts about these sorts of problems.
Someone is benefiting from the pollutionFew people pollute without reason. The hotel benefits tourists, the fish feed someone and the factory has customers.
Pollution beneficiaries are often less well off than objectors.Typically the relatively well off who holiday in unspoiled areas are the first to complain about new tourist hotels. If they prevent a couple of large hotels being built the people who would have stayed in them will have to go elsewhere. Somewhere down the line a poor factory worker will be unable to afford a holiday at all. The clearest current example is DDT and malaria. Rich world bird lovers ban DDT while poor Africans die of malaria. see DDT and Malaria
Pollution is rarely permanent.Mines eventually become exhausted, modern technologies supersede factories, forests regrow, dams get washed away, and fish stocks return. Of course species sometimes go extinct and many lives may be blighted before nature reclaims the environment but apocalyptic prophecies are rarely born out.
Human ingenuity has surprised all previous doomsayersIf governments don’t control them, prices rise as resources become depleted. This provides a signal to consumers to use less and to producers to look for alternative supplies. This is why after adjustment for inflation and rising wages the prices of apparently exhaustible materials such as metals, oil, coal and gas fall steadily wherever the market is allowed to work. This means the average person is discovering more energy sources than he is consuming. Human ingenuity has led to similar falls in the price of food, shelter, holidays, and fresh water. This means that such resources are becoming more plentiful in the sense that it is easier for people to use or enjoy them. The only resource whose price is rising is that of humans themselves. Everywhere that people are not enslaved, wages and salaries are rising. This is the basis for the claim that humanity is the Ultimate Resource.
People are goodPeople are good because most lives are valuable and because most people enrich those others they come in contact with. Since by ingenuity they often reduce resource use they also improve the environment.
Unchecked pollution is usually the result of common ownershipPeople look after the things that they own. They don’t overgraze their own land, overfish their own lakes or pollute their own water supply. If no-one owns the common land then every farmer has an incentive to put just one more cow onto it. The farmer who shows restraint loses the earning power of the extra cow, and his neighbour puts an extra one on anyway. The same happens with communally owned fish in the sea, with clean air, and rain forests.
Common ownership only works on a small scaleWithin families, and in close knit societies common ownership may work because everyone can see the benefit of restraint and since they have similar overall aims will obey the elder who enforces it. In modern complex societies where the users of resources rarely even know who they all are, let alone meet each other, it is almost impossible the regulate the commons. A better solution is to set up and create secure property rights in the resource so the owner has a financial incentive to limit overuse. If the owner can get more by polluting than by preventing pollution that suggests that polluting is the best use that can be made of the resource in question.
Government activity often makes the problem worse.Governments create new commons. Free roads not only encourage people to drive rather than go by rail or stay at home, but make it easier to live further from their place of work. Nationalised water companies providing free water, encourage waste. Council rubbish collections encourage people to buy goods with wasteful packaging. The European Union allows Spanish and French fishermen to fish in what used to be British waters, and vice versa. Subsidised rural post offices encourage commuters to live in the country. Subsidised meals on wheels and home helps encourage the elderly to live far from their families. Free health care in general encourages overuse. Child support encourages people to have more children. There may be reasons for governments to subsidise some of these activities but they should recognise where the blame for the resulting environmental damage lies. Environmentalists should prefer simple income transfers to the poor to retain the market incentives to reduce waste.
Governments should internalise pollution costs by granting ownership of common resources.Fishing quotas are almost impossible to police, but the same result could be achieved by granting local fishermen rights over their traditional fisheries. They would have an incentive to maintain stocks, and if they wish can sell the rights to other fishermen. It would be much simpler to see if an unlicensed boat was fishing at all than to check the size of its nets and the size of its catch. Similarly private Scandinavian forests are well managed and replanted while the un-owned/publicly owned Amazonian forest is being cut down without a thought for the morrow. Give someone the rights to polluteA tradable permit to produce x pollution is almost invariably preferable to a regulation to install pollution control equipment which limits pollution to x. The latter will remain unaltered for years and deteriorate. The former gives entrepreneurs an incentive to produce the same amount of goods for x – y pollution and to sell the saved y permit on. Governments can lower the total permitted tradable permits and leave it up to entrepreneurs to devise ways achieve them. Don’t worry who is to blame.It doesn’t matter who owns the pollution permit. So long as it can be freely traded, it will come to be owned by the person who can do the most good with it. This is the Coase theorem. Like Ricardo’s principle of comparative advantage, which showed that both more AND less expensive producers benefit from free trade, this is one of those counterintuitive truths that repeatedly leads non-economists astray. Take responsibilityDon’t look to government to keep the environment for you. Put your money where your mouth is, and do it yourself. If you want a clean beach with no hotels, club together with like-minded people, buy the beach, attach an entail prohibiting development and sell it on. If not enough people are prepared to support you saving your particular beach be humble enough to recognise that not everyone shares your priorities. |
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