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Environmental Protection Is a Consumption Good

September 7, 2011

Tags The EnvironmentFree Markets

"Economic growth, not legislation, is the key to improvements in environmental quality."

People love a clean, healthy, beautiful natural environment. The trouble is, not everyone can afford it. If you are lost in the woods on the brink of starvation, you are less likely to look at a frog and think, "I hope that species of frog survives" than "I wonder how much meat is on that frog."

If you live in grinding third-world poverty, you may want a cleaner stream in the village, but you cannot afford to do anything about it while your children are malnourished. You may want a low-emission heater for your hut, but since you have neither the money nor the electricity, the fire pit will have to do for now. In a world of scarcity, there are tradeoffs. You cannot afford precious time, energy and resources beautifying your landscape and protecting "greenspaces" if you are fighting hunger and disease.

Environmental protection is a consumption good. Not only that, but it is further up on the hierarchy of human needs than goods like food and shelter that ensure your family's survival. If a forest was experiencing a natural, healthy fire and a child was trapped in it, even a passionate environmentalist would not say, "Let it burn; the forest is more important than my daughter's life." Few would disagree that this is a normal and necessary ordering of human preferences.

Like all consumption goods, you cannot purchase more environmental protection until you can afford it, and you cannot afford it without economic growth. Economic growth, not legislation, is the key driver to improvements in environmental quality. There is a great deal of mythology that suggests passing laws is the key to a healthy earth. Similar to the myth that laws ended child labor in the United States, cause and effect have been reversed. Try banning child labor in the third world. Not only will many people die, but enforcement will be nearly impossible because so many people rely on it for survival. Try clamping down on pollution in the third world, and, again, lives are at stake and enforcement is not realistic. Only when a great majority of people can afford such laws and only when they are rich enough to spend time thinking of the welfare of others or the earth do such policy changes occur.

Policies that were tacked on to the tail end of naturally occurring trends typically get the credit for the change. Make no mistake; it is economic growth that has raised the American consciousness about environmental quality, and approval-seeking politicians have jumped on the bandwagon when it was convenient to do so — i.e., when most of their constituents could afford it.

The narrative above might suggest that as long as you're rich enough to afford it, government efforts to protect the environment are OK. This is incorrect for two reasons. The first is that the process of government itself systematically produces special-interest favors, rent seeking, monopoly protections, and all manner of other policies that benefit small interests at the expense of the rest. The information and incentive problems in legislative and bureaucratic bodies make them consistently fail to achieve their own stated ends. (See work by Mark Pennington for excellent analysis on this topic, as well as Richard L. Stroup's book Eco-nomics.)

"Policies that were tacked on to the tail end of naturally occurring trends typically get the credit for the change."

The second problem with passing environmental legislation once you can afford to do so is that many people still cannot. Environmental protection measures — taxes on oil, land-use restrictions, emissions standards, ethanol subsidies, etc. — affect more than just the rich people who advocate them. They raise the price of basic survival goods — food, water, land — across the globe. The wealthy can deal with the higher prices; indeed as I've said many of them may be happy to purchase perceived environmental improvement for a few bucks more at the pump. The poor cannot. Many suffer and some die.

Environmentalists want to protect the environment because they have reached a point on their hierarchy of needs where a healthy wood is the next highest good. There are no poor environmentalists. This is all well and good until they attempt to force their preferences on others via legislation. In a market, the rich are free to act upon their preferences and purchase goods others cannot afford. They are also free to try to persuade poorer people that they should value luxury goods more than basic goods. But can you imagine a law that forced every citizen to purchase a luxury car? If those who valued the sight of roads full of beautiful cars lobbied to force everyone to drive luxury cars it would be considered outrageous discrimination against the poor. Why is environmental activism not seen in the same light?

(It bears mentioning that some environmentalists are motivated less by a clean earth for its own sake and more by an obligation to future generations. This does not fundamentally change the reality that environmental protection is a consumption good that can only be addressed after more basic needs are met. Who considers the life of future generations more important than the life of their currently living children? You don't think five generations out until the current generation is secure enough to afford you the luxury.)

Everyone, including environmentalists, has needs more basic than a pristine environment. We don't worry about the earth until our survival is secure. This is a natural ordering of needs. Yet environmentalists, after meeting their own basic needs, want to force the poor to reverse their preferences and put the earth before their own survival. I don't think most environmentalists intend this, but it is the inevitable result of using the force of government to enact protection measures. This is neither desirable nor effective in the long run.

"There are no poor environmentalists."

You may be able to do great harm to many of the world's poor in exchange for some government attempt at environmental improvement (more likely to result in special-interest enrichment), but in the long run it is impossible to convince people to subjugate their survival to the perceived needs of their ecosystem. The real promise for environmental improvement is economic growth. Until people are wealthy enough to consider paying the cost of a cleaner environment, the fight to force their choices is inhumane and ultimately ineffective.

Environmentalists should seek the freedom that creates economic growth among the poor so they can afford to care about the earth. They should peacefully persuade those who can afford it to place a higher value on the environment relative to other nonessential goods. Economic growth and persuasion, not legislation, will make a greener world.

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