Free-Market Environmentalism Works

Commentary, Environment, Robert Sopuck

Environmental quality is vastly superior in free-market democracies, so why don’t advocates of capitalism say so? Despite a growing body of work in support of free-market solutions for environmental problems, they usually assume that the issue “belongs” to the socialist left. It’s time for that to change.

Advocates of the discredited idea of central planning have convinced the public that only more regulations can protect the environment. Facts don’t matter. uring the June federal election, politicians on the global warming bandwagon, like Paul Martin and Jack Layton, incessantly chanted their support for the tax-and-regulate provisions of the Kyoto Accords, in the midst of the coldest spring and summer ever recorded. Harper’s Conservatives failed to drive their campaign through the middle of that gaping logical hole.

Activists regularly trash industry, propose massive bureaucracies, and advocate higher taxes to pay for alternative energy sources. Their dirty little secret is that these tactics have little to do with the environment. It’s all about central planning and government control and using “environmental protection” as the Trojan horse. Consider the Earth Summit in Rio de Janeiro in 1992. The event was the largest-ever gathering of world leaders, but guess which leader the environmental activists feted and cheered above all others? Fidel Castro, the head of one of the last remaining communist countries with one of the worst environmental records around.

Contrast that disgrace with what we now know about environmental management. From air and water quality, to lands reserved for parks, to biodiversity and conservation, the best real improvements have taken hold in democratic, wealth-creating, capitalist countries. We still have issues, but it is only rich, free-market democracies that generate the means to fix those problems. And they are being fixed.

Take paper-mill effluent. I once oversaw environmental management at a Manitoba newsprint mill that had constructed a $25-million state-of-the-art waste water treatment plant. Built to comply with new regulations, the new facility at Pine Falls discharged such clean water that all of the tests were passed with flying colours. Only free countries can achieve such performance because they achieve levels of capital formation necessary to pay for it. Poor socialist countries cannot.

Manitoba, however, is a study in contrasts. On one hand, our NDP provincial government has created the Riparian Tax Credit program. It shaves some dollars from landowners’ property tax bills if they agree to conserve the “riparian zone,” the natural habitats along waterways that are so important in terms of water purification. Great idea. On the other hand, the Manitoba government has just held legislative hearings on its proposed Water Protection Act. The regulatory and “top-down” nature of the Act has caused a great deal of concern in rural Manitoba and the Act received a rough ride in these hearings.

Now we are finding out that this regulatory approach is itself less efficient in cleaning up our air and water than market-based incentives. The use of trading permits, where governments set overall limits for pollution and allow industrial enterprises to buy and sell dumping rights within those limits, is responsible for North America’s phenomenal success in reducing sulphur dioxide emissions, and for radical improvements in water quality in Long Island Sound off Connecticut and in the Tar-Pamlico basin in North Carolina.

Market-based incentives also preserve habitat. In the last decade, the United States retired about 45 million acres of fragile farmland by paying landowners to “grass them down.” Those actions confer public benefits like more wildlife and improved water quality. But only a rich country using highly productive modern farming technology could take an area the size of the farmed portion of Alberta out of production without missing a beat.

A market-friendly environmental philosophy emphasizes results, not process. Activists love the current, bureaucratic style of endless hearings based on ridiculously broad terms of reference and the free media coverage they generate. Most jurisdictions now offer “intervener funding” whereby opponents of a project are paid by its developers to oppose it.

The market-friendly approach achieves better results because bottom-up incentives work far better than top-down central planning and regulation. It recognizes that human use and management of natural resources can be forces for environmental improvement. It acknowledges the stewardship efforts of resource users like farmers, trappers, hunters, anglers, and loggers by designing incentive-based policies that reward good works.

These same resource users do more actual “on-the-ground” conservation than all the anti-use types combined. Manitoba’s Conservation Districts carry much of the burden. These districts, creatures of local governments and area farmers, are having a measurable and positive impact on the agricultural environment. All without rules, regulations and bureaucracies. Just a “roll up the sleeves and get the job done” approach.

Free-market environmentalism uses real science to guide policy, not the “junk science” that permeates most of Canada’s self-serving environmental organizations. It uses regulation only when it works, not as a matter of course. Courageous books like Greenspirit by B.C.’s Patrick Moore, The Skeptical Environmentalist by Denmark’s Bjorn Lomborg and Eco-Imperialism: Green Power, Black Death by American Paul Driessen have mounted important arguments that reclaim the environment for the right.

These books should be required reading for all politicians seduced by the lure of environmental planning through state regulation. Dive into the environmental pool, free marketers. The water’s fine.

A version of this article originally appeared in the National Post on October 21, 2004.