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Kyoto-style Environmentalism is Counter-Productive As governments around the world ponder whether to drop the international bureaucracy bomb, known as the Kyoto Accord (with or without U.S. support), citizens of every country must consider two major points. First, global warming theory is largely dependent on the shaky assumption that, absent intervention, today’s rate of fossil fuel consumption, and consequent pollution, will continue into the unforeseen future. Second, by pursuing strict environmental regulations, Kyoto backers are hampering the best ally the environmental movement has ever had: free trade. The idea of smoke-belching factories and gas-guzzling SUVs dooming the planet to endless, black-skied summer makes great fodder for newspapers, politicians, and Hollywood. True basis for this idea, however, is lacking. Furthermore, even if scientists could conclusively prove that industry-induced global warming is a threat, Kyoto is not the answer. Zero-emissions energy resources, such as the sun, hydro turbines, and fuel cells, already exist. Lacking are methods for efficiently allocating such resources on a scale equal to or greater than that which has been achieved with fossil fuels. By definition, therefore, this is an economic problem. So who should solve this problem? Why, nobody of course. Resource allocation is most effectively achieved when thousands and millions of individuals are left to pursue their own independent desires with no central direction. Zero emissions fuel would be no different. In fact, even within the context of the “fossil fuel era,” the forces of free markets have continually pushed the world toward zero emissions energy. “Clean” technology has generally displaced “dirty” technology throughout industrial history. The revolutionary, and much cleaner running, internal combustion engine replaced coal burning steam engines because the former is more economically efficient – not because of an international treaty on the environment. Ditto for why manufacturers prefer clean burning hard coal, over sulfur ridden soft coal; ditto again for why natural gas stoves replaced wood burning stoves. Automobiles replaced horses in the world’s cities – not because of an international mandate to clean dung-strewn, disease-ridden streets—but because consumers found cars to be economically superior to horses. The trend toward cleaner technology should not be surprising. Pollution, which costs money to produce but generates no profits, is bad business. A steel mill that pumps one ton of carbon into the sky for every ton of steel produced, is seeing half of its productive output go up in smoke. In a competitive marketplace, there is strong incentive for the steel mill owner to continually evolve toward lower per-unit fuel consumption. In a similar vein, to the carbonated beverage seller, aluminum cans are a useful instrument for transporting and storing pop, but also represent higher freight costs. By continually reducing the amount of aluminum in each can, beverage sellers can save money on aluminum and freight, consequently reducing the need to mine bauxite and burn transportation fuel. Over time, less efficient, heavier polluting companies naturally go out of business because the cleaner, more efficient companies are able to undercut them on price. Even as the evolution continues toward more efficient allocation of fossil fuels, revolution looms. Hundreds of companies are right now spending millions of dollars on so-called alternative fuel research. Eventually somebody will invent – and figure out a way to profit from – a water-fueled car, or sun-fueled factory, or some other revolutionary technology that we could not possibly conceive today. The allocation efficiency of zero-emissions fuel will eclipse that of fossil fuel; and Kyoto will be turned on its head. [Even if there is limited basis for assuming that fossil fuel consumption will continue at current rates, basis for assuming otherwise is equally or more abundant, and when objectively considered, hard to ignore.] None of this means that there should not be an environmental movement. Indeed, with the environment on the mind of so many citizens today, thanks to the conscious-raising efforts – or, if you prefer, propaganda – of environmentalists, there would seem to be considerable sympathy for the cause. The approach of environmentalists – not the purpose – is what needs to change. By virtue of reliance on coercive government decree to accomplish its goals, Kyoto (like most other environmental causes) is not only at odds with the principles of liberty, but counterproductive to the goals of environmentalists. If environmentalists wish to be activists for their cause, their method should be capitalism – not coercion. A capitalistic approach to environmentalism would simply be pragmatic. Consider the fracas over the Alaska National Wildlife Refuge. Unhappy with the prospect of Big Oil drilling for black gold in the frozen tundra, the Greens are demanding that Washington freeze the oil companies out of ANWR forever. This scenario is tiring – and ultimately inconclusive. The Greens might persuade Washington to pass a law to their favor, but laws can eventually be overturned. Ten years from now, those poor Greens may need to re-fight the same battle. The surest way for environmentalists to keep Big Oil permanently out of the ANWR would be to buy the ANWR – or at least buy the mineral rights. Then, victory would be conclusive. Never mind, for a moment, how this might happen. No environmentalist would disagree that Sierra Club ownership of the ANWR would bring a favorable and final end to the issue of Alaskan drilling. The only reason environmentalists buying ANWR sounds far fetched is that the idea is largely considered irrelevant. For some reason, even though they compete for the exact same resources, environmentalists and businesses are expected to operate under completely different sets of rules. Environmentalists are expected to run to big brother to mandate compliance with their ideas; meanwhile business people, to gain compliance with their ideas, are expected to undertake great personal risk in the marketplace: they must persuade people to buy, and then keep buying, their service or product. If they fail, they lose money, period. To prevent drilling in Alaska will only require screaming in Washington. To drill in Alaska would require a fight with the Greens, followed by millions of dollars of investment that may never yield a profit. Absence of personal risk is an unfair advantage for environmentalists in the short run. Long term, however, this is a big problem for the environmental movement. If British Petroleum pays $1 billion for the mineral rights in ANWR, but ANWR turns out to be a bust, BP is out $1 billion. Shareholders will lose money. Executives will be fired. On the other hand, BP will know not to drill in Alaska anymore, and in the long run, they will benefit from the knowledge gained by the failure of their idea. Contrast that to the personal consequence of a failed environmental idea (i.e. a law has no positive impact on pollution, or causes unexpectedly high economic costs). The environmentalists, themselves, lose nothing. Nobody from Green Peace is fired. There are no angry shareholders. There is no built in feedback mechanism, like personal profits and losses, to tell the environmentalist not to repeat this failure in the future. The environmentalist, therefore, will likely continue to push for similar laws based on the law’s intention rather than its effect. These laws will be termed environmental victories, but over time, the lack of objective feedback turns environmentalism into a long, rudderless journey to nowhere. Aside from whether environmental ideas succeed or fail, consider the fate of environmental ideas under the coercive approach. Environmentalists spend endless energy turning their ideas into action via legislation. Once become law, however, stewardship of environmental ideas is entrusted to government bureaucrats, who have no particular passion for environmental principles. They really do not care about advancing, or continually improving the cause. Environmental fervor is reduced to policy and by-laws. Imagine an entrepreneur sweating out a business plan for 5 years; then just as profits were really starting to grow, transferring ownership rights to congress. The businessman, never abandons his ideas because if he does, he starves. The presumable enviro-businessman would not simply force someone else to build a car with strict emission standards, and then move onto mandating how much water can sit in a toilet bowl. He would actually build that car himself, and because that car would be his meal ticket, he would carry forth the excitement and determination that went into developing the zero-emissions prototype into building and selling thousands more. [Soon people would be driving around in big, fast, powerful, affordable cars that achieve 75 mile/gallon fuel efficiency – and the fuel would be ocean water!] Meanwhile, another enviro-capitalist could be developing that 1 quart per flush miracle toilet. Profits from such enviro-technolgy ventures could be parleyed into still more earth saving inventions, or into real estate like ANWR, or any number of other projects. Such a notion sounds naïve, if not downright laughable to environmentalists indoctrinated into a culture of protest, intimidation, and legislation; but this is no joke. Capitalism works better than coercion; and if environmentalists ever become serious about capitalism, they need look only at themselves for the capabilities necessary to transform legislative agenda into corporate strategy. Indeed, the environmentalist movement is a great roaring, raging, spilling, swirling river gorged to the banks with talented, intelligent, dedicated, excited, tenacious, confident, charismatic, focused individuals. A more promising mix of entrepreneurial characteristics is not to be found anywhere on the landscape of capitalism. Environmentalists could win at capitalism – big time. Yet the environmental movement, hypnotized by the lure of coercive power, is rushing headlong toward the precipice of Kyoto. Environmentalists have been working so hard, for so long, promoting their cause to millions of individuals, and thousands of organizations, in hundreds of countries. The river is roaring! People are listening. The enviros have attracted a sympathetic audience – actually, a market! As usual, however, they want to abandon their market of enviro-consumers – this time to the most far-reaching, deep rooted, complex tangle of faceless, disinterested bureaucrats the world will ever have known. Over the precipice, environmentalists will once again find themselves mired in the stagnant backwaters of bureaucracy; and all those talented people will be sloshing through the mud, bumping into each other, angrily wondering what happened to the raging river. Such a fervent, principled group of people deserves better – and they could have better. I wish they would join the capitalists and learn the exhilaration that comes when millions of people reach voluntarily into their wallets and silently declare, “I agree with you.” |
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