Mises Wire

Another Earth Hour has come and gone. So what can we learn from the fourth iteration of this event?

Earth Hour is a drain on resources. This is true since, if it were otherwise, companies that participated in the event would continue the practice of lights off after the event. So, clearly, the tangible costs of switching off lights are greater than the tangible benefits.

And it follows that greater costs mean more resources were consumed (all types of resources). From this we know that the environment (as defined by the organizers) did not benefit.

So why do companies participate?

For some companies, participation is a goodwill gesture. And as far as it is a goodwill gesture, the companies and their owners benefit. When goodwill is involved, the decision to participate implies an efficient (or near efficient — as far as any entrepreneurial decision can be known to be efficient ex ante) use of resources. Participation adds value.

But I believe that some participation is due to fears of possible governmental interventions. Those involved in the organization, as well as supporting groups, have the potential to push for laws and regulations that would cost more than the once-per-year event. So companies participate in order to placate the organizers and their enforcer — the societal apparatus of coercion and compulsion, even if for only one more year.

Or maybe I’m just cynical.