Free Market Environmentalism

Green Hills of Montana
The green hills of Montana.

Editor’s Note: The idea to harness the forces of the free market to pursue environmentalist objectives is initially counterintuitive – after all, isn’t the free market to blame for all environmental misery? Isn’t government intervention necessary to keep rapacious profiteers in check?

The first step to recognizing the need to embrace market principles in order to further environmental objectives is to examine the opposite extreme. Communist societies, where all property belongs to the government, are demonstrably the worst stewards of the environment. In the Soviet Bloc, during the years between World War II and the liberation of 1989, environmental destruction was far worse than in the capitalist western nations. The air pollution was so thick it dimmed the sunlight reaching earth. The Aral Sea was drained dry, destroying the livelyhood and the climate through half of Central Asia. It will take decades, and the wealth of capitalist nations, to clean up this mess.

Vaclav Klaus, President of the Czech Republic, and someone who suffered under communist tyranny, has put it thus: “When I study and analyse environmental indicators concerning my own country and when I compare them with the situation in the communist era, there is an incredible improvement. The improvement is not because of ‘collective action’ you advocate (it existed in the communist era), but because of freedom and of free markets.”

It’s not easy to articulate the principles of free market environmentalism. When the air and water is fouled by pollution, the natural emotional reaction is to blame the polluters and demand regulations. By extension, the polluters are assumed to be motivated by profit, which in-turn is demonized. But it’s not so simple. Profit creates wealth, and wealth funds environmental restoration. Central planning – communism – destroys wealth, destroys incentives, and the practical result is abominable pollution, worse than anything we’ve ever seen in the capitalist west, and harder to correct.

Free market environmentalism is what the economists at the Property and Environment Research Center (PERC) have been studying and promoting for over 15 years. When we began publishing EcoWorld in 1993, we quickly came across the work PERC was doing and we’ve been following them and learning from them ever since. Their message is more important now than ever, as the emotional juggernaut called global warming threatens to drown out reason and demands immediate and extraordinary measures.

Incentives are not easy to formulate, and require governments to referee. But regulations and takings are even more problematic – in the extreme they lead to environmental devastation exemplified by the failed communist economies of Eastern Europe. The question is one of emphasis, and free market environmentalism recognizes that private property, ownership, stewardship, incentives, and the profit motive properly channelled is superior to central planning. This recent report by noted author Matt Ridley attests to his conversion to free market environmentalism, something that even – indeed especially – today’s global warming alarmism should not consign to the list of endangered ideologies.

- Ed “Redwood” Ring

Free Market Environmentalism, The Road to an Epiphany
by Dr. Matt Ridley, June 28, 2007
Elk Herd Grazing
Elk grazing beneath the big sky – PERC country.

It had hardly occurred to me that conservation could be done by anybody other than governments…

In 1987 I became chief correspondent for the Economist in Washington. My predecessor gave me a few tips as he moved to London. One of them was: “If you get an invitation to a PERC meeting in Montana, grab it! You’ll have a great time in the Rockies watching elk and, although they’ve got some crazy ideas, they are worth listening to.’

He was right. I went to a PERC journalists’ conference, right in the middle of the infamous Yellowstone fire, which proved to be a big distraction. Still, I recall Terry Anderson bugling to elk, Aaron Wildavsky making no sartorial concessions to the West, and some great late-night arguments about the role of the state.

It came at a time when my eyes were opening. Aged 30, I was a keen conservationist and enthusiastic naturalist. I had briefly been a field research biologist before I became a journalist and I was born on a farm in northern England. But it hardly occurred to me until then that conservation could be done by anybody other than governments. And like most Europeans, I knew all about “market failures” and not nearly enough about the perverse incentives and bureaucratic momentum of government failures.

Meeting PERC and reading Terry and Don’s book set me thinking. The following year I found myself covering the Clean Air Act revisions as they passed through Congress, and I was very struck by how most of the environmental organizations dismissed emissions trading in sulfur and nitrogen dioxide. It sounded to me (and later proved) to be a very good idea.

But it was November 1989 when the penny finally dropped. Not only were communism’s appalling human crimes bared for the entire world to see, but its environmental ones were as well. The day the Berlin Wall came down, I recalled a conversation I had a few years earlier on an airplane with a prominent British pop star (now a respected leftist politician) about how happy East Germans really were under communism and how much freer and more sustainable their lives were than those of Americans. He’d been there. He knew. I resolved the day the Wall came down to stop tolerating such excuses for all forms of state domination.

The legacy of utopian central planning – hideous
air pollution in the Soviet Union.

Ten years later I was plowing a lonely furrow as a pro-environment, but pro-market, newspaper columnist in Britain. My stance baffled people. I met (and still meet) absolute incredulity rather than opposition from state-employed conservationists. It is not that they think command-and-control is the only way to conserve; it’s that they have never even considered an alternative – never imagined markets generating incentives. Grimly they repeat the mistakes of Gosplan (the committee for economic planning in the Soviet Union), wondering why their central planning, nationalization, and confiscation of people’s interest in wildlife and amenity doesn’t seem to generate enthusiasm.

Here is an example. To convert a barn into a house in Britain today you must survey it for bats before you apply for permission to convert. The bat survey must be done by an “accredited” bat group and only in the summer months. Guess what? Bat groups are very busy in the summer and charge very high fees. If the survey says there are rare bats in the building you may be refused permission to convert; as it turns out, the bats, not you, own the building. So what happens? People respond to incentives. Most barn owners resent and detest bats. I’m told playing Wagner at full volume clears a building of bats in short order. A simple scheme of small tax rebates for owners of barns who add bat-roosting boxes to their houses would achieve good will as well as bat babies. But it would not make paid work for bat groups.

PERC inspired me to see the world differently. The vision of free market environmentalism is inspiring because it is optimistic, and the solutions it suggests are voluntary, diverse and (for the taxpayer) cheap. The only things standing in its way are vested interests of politicians, bureaucrats, and pressure groups.

Matt Ridley Portrait

About the Author: Matt Ridley received a doctorate in zoology from the University of Oxford before commencing a career in science journalism. Ridley worked as a science correspondent for the Economist and the Daily Telegraph and is the author of several acclaimed works including The Origins Of Virtue (1997), Genome (1999), and Nature Via Nurture: Genes, Experience, and What Makes us Human (2003), also later released under the title The Agile Gene: How Nature Turns on Nurture (2004). This article originally appeared in the March 2007 issue of “PERC Reports.” The Property & Environment Research Center, PERC, is a nonprofit institute dedicated to improving environmental quality through markets. Republished with permission.

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