© 1990 Karen Selick
 A Dose of Capitalism for Environmental Ills
An edited version of this article first appeared in the November, 1990 issue of Canadian Lawyer.  If you wish to reproduce this article, click here for copyright info.


 A Dose of Capitalism for Environmental Ills

The May 1990 issue of this magazine contained an article called "It's Not Easy Being Green." If being green means kowtowing to the supposed wisdom of most environmentalists, my question is: who wants to? 

I lived through a municipal recycling program as a teenager. I enthusiastically separated cans and bottles, washed them out, stripped off labels, bundled newspapers, and took the plastic grocery bags back to the store. I was sure I was making the world a better place to live in. 

The joy wore thin after a while. Others were not as conscientious as I was. They continued thoughtlessly throwing out mounds of garbage while I wasted my time trying to improve our world. Eventually, the program ended, and I breathed a sigh of relief. No more tedious, unpaid labour, no more resentment and no more guilt. 

Now that I'm older and wiser, the only thing that would convince me to go through that regimen again would be having to pay the cost of disposing of my garbage--by way of a fee per pound. If the cost were sufficient, I'd be sorting and recycling in a flash. 

But as things stand, the cost of garbage removal is hidden in my property taxes. It matters not a whit whether I put out one bag or seven each week; I pay exactly the same amount. I'm even busier than I was when I was a teenager, and a lot less gullible. So why recycle? 

Experiments in some U.S. communities have already proven that a pay-by-volume system of garbage disposal reduces waste. People not only start recycling and composting, they also demand products with less packaging.  

Despite these obvious advantages, few environmentalists have advocated this simple change. Instead, a steady barrage of books and articles attempts to persuade us all to be green using the same old moral suasion techniques and scare tactics that have been failing for so many years. In fact, so much has been written in this vein that I'm half expecting some zealous environmentalists to start a campaign for self-censorship soon, lest their own prolific paper output endanger our forests. 

Most environmentalists fail to realize that self-interest (in their jargon, a "renewable resource") can be more safely relied upon to correct environmental ills than coercive measures veiled by appeals to idealism, charity, fear or guilt. 

I was therefore delighted to discover that there is at least one book on the market that recognizes this truth.  Economics and the Environment: A Reconciliation is edited by Dr. Walter E. Block and published by the Fraser Institute. it's a splendid collection of essays by 11 economists, including four Canadians, applying the principles of the marketplace to a wide range of issues, including energy conservation, global warming, the ozone layer, acid rain, and even endangered species. 

Its thesis is that the environmental problems represent not a failure of the capitalist system, as is often alleged, but rather a failure of our legal system to fully implement capitalism--that is, to assign private property rights and protect them from violation. 

This book shatters many environmentalist myths.  It tells, for example, how the Love Canal disaster in New York state was caused directly by irresponsible government actions and not, as commonly portrayed, by a greedy corporation.  

We learn that recent, highly touted environmental regulations are backfiring. The U.S. Clean Air Act, for example, requires coal- burning electric utilities to install expensive smokestack scrubbers to reduce sulphur emissions by a fixed percentage. The regulations say nothing, however, about the allowable emissions in absolute terms. As a result, utilities have an incentive to substitute cheap, high-sulphur coal for expensive, low-sulphur coal. Even after scrubbing, emissions are higher. 

To make matters worse, the combined cost of full scrubbing and cheap coal is still higher than the combined cost of partial treatment and expensive coal. So in one fell swoop, this ill-considered regulation has caused more pollution and higher electricity costs. 

The economists hammer home the point that this type of blunder is common whenever we substitute public decision-making for private.  Political decisions are affected by myriad considerations that may be inimical to politicians' proclaimed goals. In the case of the smokestack scrubbers, the regulation was promoted by miners in high-sulphur coal fields.

The authors explain "the tragedy of the commons": why privately owned resources are less likely to be wasted, damaged or destroyed than resources owned by everybody--and nobody. This principle can be applied to environmental problems ranging from the deforestation of the Canadian north, to trout fishing in Scotland, to elephant poaching in Africa. 

Sometimes, the authors point out, "solutions" cause even greater (although different) problems. It may be desirable to reduce gasoline consumption by building lighter cars, but is it worth the increase in traffic deaths? Maybe disposable diapers are a problem in landfills, but what about the detergent wastes and the electricity consumed in washing cloth diapers? 

Trade-offs like this must be weighed, and only a fully functioning marketplace, with its system of price signals, allows the weighing to be done objectively.


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