April 22, 2021

Markets & Free Enterprise

Free Marketers Should Care About the Environment

By: Matt Hampton

Pitcairn Island, the only remaining British possession in the Pacific Ocean, has only 43 inhabitants.  More than 300 miles from the nearest populated island, it is only accessible by twice-yearly cargo ships that stop at the cliff-ringed island’s only accessible harbor.  In “Outposts Journeys to the Surviving Relics of the British Empire,” author Simon Winchester describes the challenges of living in a territory so disconnected from civilization: 

There is no island doctor; when Betty Christian fell victim to a particularly pressing gynaecological problem the island pastor […] had to operate.  He had never carried out surgery in his life before, and the instrument needed for the operation was not in stock among the rusty scalpels and plasters in the Adamstown dispensary.  So they hand-forged the necessary item, and the pastor was led through the operation, step by step, by a surgeon speaking by radio from California, 8,000 miles away. 

But in the 1980s, American businessman Arthur “Smiley” Ratliff proposed a solution.  The millionaire wanted to rent the uninhabited Henderson Island as his private paradise, and promised to build an airfield on it and organize a ferry to Pitcairn “only” 100 miles away. Ultimately, the United Kingdom rejected his plan after the World Wildlife Fund objected to settling Henderson because it was home to endemic species of birds, invertebrates, and more.  

However eccentric, Ratliff’s plans provided the opportunity for a necessary link to the outside world. However much you may value flora and fauna, it seems like a cruel sacrifice to deprive the isolated Pitcairners of this development’s benefits on these grounds.  

This is a main charge opponents of environmentalism make: That the cause doesn’t appreciate economic development and human well-being. Would you have us return to the pre-Industrial age, when most of humanity lived in squalor, for the sake of “the planet?” they say.

Many environmentalists have acted like they do, from Greta Thunberg’s transatlantic maritime voyages in lieu of air travel, to the half-sarcastic meme that “We are the virusin response to reduced environmental impact during COVID-19.  But the suggestion that we should continue to endure the strain pandemic shutdowns have caused or return to having to sail for two weeks to get to Europe will cause most sane people to scoff at environmentalism. Not to mention that it would mean sacrificing the vast improvement in quality of life the world’s poorest populations experience due to economic development. 

But the popular discussion about climate and the environment – on both sides – ignores a reality that should be self-evident:  that maintaining a healthy & vibrant environment is in our economic interest. 

Though we gain from using natural resources, exploiting them in an unsustainable way is not good for humans.  For example, overfishing led to the collapse of marine ecosystems off Newfoundland in the 1990s, destroying over 35,000 jobs in the largest industrial closure in Canadian history.  Environmental externalities such as water pollution, air pollution (3.4 million deaths per year), erosion, and wildfires are also undesirable. 

This article is not about proving climate change exists, but it will definitely have consequences for humans:  The leading model estimates a 4°C temperature rise will cause damages totaling 4% of global GDP. 

Timothy Brawoler and David Bice, professors at Penn State wrote, “It might seem like damages totaling 4% are not such a big deal, but consider that the recent devastating earthquake that hit Japan in 2011 caused damages equal to about 3% of Japan’s GDP, and the country’s economy was severely impacted.”

Increasing energy and water costs, hurricane damage, and loss of real estate from sea-level rise are estimated to cost the U.S. economy $1.9 trillion annually by 2100.  It is difficult to predict the economy decades in the future with certainty, but warming never seen in the history of the human species poses a clear risk of upheaval.

But Green-New-Deal-ism is not the only solution.  A growing market environmentalist movement consists of groups including the Property and Environment Research Center and the American Conservation Coalition (for which I am a volunteer). These groups support policy change and educate the public about how we can solve environmental issues while maximizing human well-being and, as much as possible, working within the market system that maximizes individual freedom.

Many ecological problems have been caused by government mismanagement and lack of property rights. The tragedy of the commons causes overfishing, because when resources belong to no one, no one has an incentive to maintain them. On the other hand, private property rights have led to the recovery of endangered species and expansion of wildlife preserves in Africa. 

Economic freedom will promote innovation that will allow us to use less natural resources and emit less waste without reducing our quality of life. Excessive regulation has discouraged investment and innovation in nuclear energy, one of the safest and most reliable alternatives to fossil fuels. 

Economics is about tradeoffs, and we will have to make tradeoffs in specific cases, but we must reject the false dichotomy that environmentalism is an abstract deity to which we must sacrifice (or not sacrifice) humanity.  Instead, we should recognize it as an economic good that we must maintain and create market incentives to do so.