Chapter 4: Can Free-Market Approaches Protect the Environment?
Chapter 4 Preface
Environmental activists and regulators are often at odds with business leaders, who believe that efforts to conserve the environment sometimes destroys jobs and profits. Rather than the use of government regulations to protect the environment, corporate leaders advocate a free-market approach. They believe that if government gets out of the way, industries will conserve the environment because it is in their economic interest to do so. The controversy over how best to preserve forests exemplifies the debate between supporters of government regulations and proponents of free-market solutions.
Many environmentalists claim that forests need to be protected through the actions of the U.S. Forest Service and government measures such as the Northwest Forest Plan, adopted in 1993, which limited logging on most federal lands. They view logging as a threat to the biodiversity of these forests. According to Paul and Anne Ehrlich, logging depletes the supply of fish because the runoff from logged areas damages the streams and rivers where the fish live. Logging also leads to “lost esthetic values and diminished ecosystem functioning,” according to the Ehrlichs.
Others assert that logging protects the environment. Dennis T. Avery, a senior fellow at the Hudson Institute, a public policy research organization, argues that logging mature trees is beneficial because it reduces the risks of forest fire. When done properly, logging may increase species...
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Free-Market Environmentalism Can Protect the Environment
Everybody has heard of Yellowstone National Park and even Tongass National Forest, the former under the jurisdiction of the National Park Service and the latter under that of the Forest Service. But how many people have heard of the North Maine Woods, the Maine Coast Heritage Trust, or the Eastern Pennsylvania Hawk Mountain Sanctuary, all of which are under nongovernmental control? Those and many other private parks, wildlife sanctuaries, and nature reserves are doing a much better job of preserving natural amenities than are the federal agencies.
Because of our shared interest in both environmentalism and liberty, my husband and I spent a year-long “working honeymoon” crisscrossing the country visiting private nature preserves and documenting their exciting and vitally important story. I focused on the writing, while my husband Scott, a professional fine-art photographer, recorded on film the lands that were quietly being preserved by individuals, conservation organizations, and business enterprises.
A year earlier, while studying geology at Pennsylvania State University, I had taken a course entitled “State of the World,” after the annual publication of the same name. After many months of listening to unconvincing eco-statist rhetoric in class, I decided to do my research project on how free markets and private property rights could lead to more efficient and more permanent solutions to the...
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Green Marketing Can Help Conserve the Environment
In the 1970s, leading marketing thinkers like Philip Kotler and Gerald Zaltman mandated that “social marketing” become an important concept in the discipline. Social marketing was defined as “the application of marketing concepts and techniques to the marketing of various socially beneficial ideas and causes instead of products and services in the commercial sense.” This definition implicitly includes ideas on the preservation, conservation, and protection of the physical environment as a component of social marketing.
Building on the tenets of social marketing, Karl E. Henion and Thomas C. Kinnear offer a definition of ecological marketing:
. . . [E]cological marketing is concerned with all marketing activities: (1) that served to help cause environmental problems, and (2) that may serve to provide a remedy for environmental problems. Thus, ecological marketing is the study of the positive and negative aspects of marketing activities on pollution, energy depletion and nonenergy resource depletion.
Defining “Green Marketing”
More recently, Alma T. Mintu and Hector R. Lozada have defined green marketing as “the application of marketing tools to facilitate exchanges that satisfy organizational and individual goals in such a way that the preservation, protection, and conservation of the physical environment is upheld.” Through this definition, Mintu and Lozada...
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Ecotourism Will Protect the Environment
Ecotourism is often touted as an experience that allows us a rare opportunity to have our cake and eat it too. More precisely, ecotourism allows us to enjoy wilderness experiences without allowing those experiences to compromise the overall health of the natural environment.
When properly managed, ecotourism offers excellent wilderness experiences while contributing to the preservation of natural and historic places. It works this way: Controlled numbers of people pay for the opportunity to visit a sensitive environmental area. While there, they enjoy a sense of spiritual renewal. And they leave behind an intact ecosystem and increased wealth for the local community.
Ecotourism is a relatively new concept. As a result, its meaning continues to evolve.
In Nature Tourism, Richard Ryel and Tom Grasse, president and director of marketing, respectively, for International Expeditions, define ecotourism as:
purposeful travel that creates an understanding of cultural and natural history, while safeguarding the integrity of the ecosystem and producing economic benefits that encourage conservation.
The Ecotourism Society, a non-profit organization based in Bennington, Vermont, broadens that definition by adding that the economics of ecotourism should be “financially beneficial to local citizens.”
The Canadian Environmental...
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Environmental Regulations Infringe on Property Rights
The moment that idea is admitted into society that property is not as sacred as the Laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. —JOHN ADAMS
According to Black’s Law Dictionary, the term property “embraces everything which is or may be the subject of ownership.” It is the “unrestricted and exclusive right to a thing; the right to dispose of a thing in every legal way, to possess it, to use it, and to exclude everyone else from interfering with it.” By definition, the term does not just apply to lumber companies, builders, ranchers, and farmers. If you own a home or business, you are a property owner. If you own a car, stocks, bonds, or an IRA, you are a property owner.
Property Rights and Civil Rights
It is often overlooked (or perhaps ignored) that private property rights are included as civil rights guaranteed by the United States Constitution. The Fifth Amendment declares that “no person shall be . . . deprived of life, liberty or property without due process of law. . . .” That Amendment further states, “nor shall private property be taken for public use, without just compensation.” And in the Fourteenth Amendment, local officials are forewarned, “nor shall any state deprive any person of life, liberty, or property.”
Writing for the majority in 1994’s landmark...
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Environmental Regulations Are Necessary
Taxes and regulations are often cast as polar opposites. Regulatory approaches, born out of environmentalists’ distrust of businesses, are the bad old policies, or so the fable runs. The best way to make sure firms cleaned up was to tell companies exactly how to do it. But now regulations have become burdensomely complex and perverse, wasting businesses’ money and often failing to protect the environment as well. Tax and permit systems are the coming fashion. They can sweep away the tangle of rules, freeing business from its regulatory shackles.
Like most fables, this one contains some truth. Most of the bricks in the environmental policy edifice built during the last 30 years have been fired from the stuff of legal codes, not tax codes. And to be sure, governments have often overstretched regulation, and barely tapped the potential of market approaches. But the full truth is that the two approaches are best seen as complements, not rivals. Elegant in theory, tax and permit systems rarely work so neatly in practice. And less-pretty regulations have done much environmental good. Making the industrial economy operate efficiently within environmental limits will require synthesizing the two approaches, using the strengths of each to compensate for the weaknesses of the other.
The Benefits of Regulation
Environmental regulations on the books have scored important successes. In Western Europe, for example, regulators can point to a...
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Emissions Trading Does Not Protect the Environment
. . . the IPUAIC was a creature of the smog, born of the need to give those working to produce the smog some hope of a life that was not all smog, and yet, at the same time, to celebrate its power. —Italo Calvino, “Smog,” 19581
Since the beginnings of the Industrial Revolution, corporate managers have sought to obscure the social and environmental impacts of pollution. Like Calvino’s bedraggled editor of a fictional trade journal improbably named Purification— the organ of an industry-sponsored Institute for the Purification of the Urban Atmosphere in Industrial Centers—corporate functionaries have obligingly stretched the truth to put the best possible face on their employers’ destructive activities.
Extractive industries appropriated the language of conservation in the 1920s, elite think tanks took the initiative in environmental research in the 1950s, and corporations steadily increased their influence over the mainstream environmental movement during the 1980s. In the 1990s, however, these efforts have taken a bold new turn. Even as corporate lobbyists work tirelessly behind the scenes to dismantle decades’ worth of environmental protections, a new generation of policy analysts and free market ideologues has successfully advanced the notion that corporations—and the capitalist market itself—are now the key to a cleaner environment. This updated version of corporate...
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Overreliance on Green Products Cannot Protect the Environment
A pat on the back, a round of applause, please, for all the recycling Americans! We have been faithfully crushing our cans, rinsing our jars, and dragging our bins to the curb every week. Now, let’s take a minute to examine the results of our efforts. American Paper and Forest published the 1995 recovery rate of paper at 45.1%, up 11.6% since 1990. The American Plastics Council reported that 22.4% of plastic bottles sold in 1995 were recycled as compared to 9.0% in 1990. According to the Steel Recycling Institute, the recycling rate of steel cans was at 55.9% in 1995, up a staggering 31.3% since 1990. The Aluminum Association informs us that 2,017 million pounds of aluminum cans were recovered in 1995, as compared to 1,934 million in 1990.
More Consumption, More Recycling
The Characterization of Municipal Solid Waste in the United States, a report prepared by Franklin Associates, Ltd. for the Environmental Protection Agency (EPA), totals the waste statistics and, yes, the trend continues. Total waste materials recovered in 1990 weighed 32.9 million tons; in 1994, they weighed 49.3 million tons (1995 figures are not yet available), and 7% more of total waste generation was recovered. The environmental industry employed 140 thousand more people in 1995 than in 1990, and its revenues rose by $33.5 billion over that same period. Gross Domestic Product (GDP) was up by 1500 billion, and the weather was definitely better. We seem to have won...
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The Free-Market System Harms the Environment
In the Vishnu Purana [a sacred Hindu text], the world is destroyed and recreated by the cosmic being when human values fail to maintain nature and society. Vishnu, the Creator, assumes the character of Rudra or Shiva, the destroyer, and descends to reunite all his creatures with himself. He enters into the seven rays of the sun and drinks up all the waters of the Earth, leaving the seas and the springs dry.
The reduction of all value to wealth and the exclusion of compassion and care from human relationships are among the factors that cause this dissolution. As the Vishnu Purana puts it: ‘The minds of men will be wholly occupied in acquiring wealth, and wealth will be spent solely on selfish gratification. Men will fix their desires upon riches, even though dishonestly acquired. No man will part with the smallest fraction of the smallest coin, though entreated by a friend. The people will be almost always in dread of dearth and apprehensive of scarcity’.
A False Belief in Monetary Values
The links between greed, scarcity and destruction that this story brings out are at the heart of the ecological crisis. The reduction of all value to monetary value is an important aspect of the crisis of scarcity generated by the process of increasing affluence.
It is often said that the roots of environmental destruction lie in treating natural resources as ‘free’ and not giving them ‘value’. Most...
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