Environmental Protection; J. Shaw

Yet by the end of his revealing essay, Heilbroner was suggesting that perhaps so cialism wasn't dead, after all. He proposed "another way of looking at, or for, social ism." He suggested that we think of social ism "not in terms of the specific improve ments we would like it to embody but as the society that must emerge if humanity is to cope with the one transcendent challenge that faces it within a thinkable timespan." That challenge, says Heilbroner, is "the ecological burden that economic growth is placing on the environment." Heilbroner's characterization of environ mental problems is as misinformed as his half century of wishful thinking about so cialism. But this should not be surprising. Environmental issues-frequently overwhelm intelligent thought and factual analysis. For the past thirty years, the United States Jane S. Shaw is a Senior Associate of PERC, a research center in Bozeman, Montana.

(and much of the developed world) has experienced the results of this basic misun derstanding, the view that economic growth poses an "ecological burden." The nation has acted upon the premise that more pro duction leads to more smokestacks puffing out more pollutants and more sewage pipes sending more heavy metals and other wastes into our streams, and that only government regulation can stop the process. This as sumption has led to extensive federal inter vention in normal activities, from manufac turing to logging and, ultimately, to absurd results. • The federal government defines a "wet land" in such a way that it doesn't have to be wet, as long as it has vegetation typical of wetlands. It regulates wetlands on the basis of the Clean Water Act, which does not mention the word wetland (the relevant provision was originally designed to prevent pollution into "navigable waters"). People have gone to jail for dumping a few loads of dirt on such "wetlands."

• The Endangered Species Act has been interpreted so severely that people are now deliberately modifying the habitat of their land so that endangered species will not settle on it. Without the act they would have been pleased to have a bald eagle or red cockaded woodpecker take roost. • The government of Anchorage, Alaska, is adding 5,000 pounds offish waste per day into its sewage water. Environmental Pro295 296 THE FREEMAN • MAY 1996 tection Agency regulations require that 30 percent of the organic material in sewage be removed before the sewage reaches the ocean; but in Anchorage, the sewage doesn't have enough organic material. It must be added and then 30 percent must be removed. 2 • Strict controls on grazing practices have prevented the adoption of innovative range management. On private land, the Deseret Ranch in Utah, for example, stocks hundreds of cattle, while the Bureau of Land Management, which manages public land on the other side of the fence, can barely allow thirty animals on similar acreage.

• The EPA contends that a mobile home parkin Aspen, Colorado, is built on an extremely dangerous mine waste site, and that residents face harm from lead poison ing, even though those who have lived there for years have blood lead levels below the national average. The EPA has made the park a Superfund site, and insists on a costly and disruptive cleanup. Other small mining towns similarly face a belligerent EPA. How This Situation Arose After World War II, as incomes rose, people's attitudes toward the environment around them changed. "Postwar affluence had produced a generation reared in relative comfort, one now in search of 'postmate rial' values long deferred by their elders," writes Christopher Bosso, attempting to explain the rise of environmentalism in the 1960s.3 Against the backdrop of growing wealth and leisure, the 1962 publication of Silent Spring, 4 an eloquent book by Rachel Car son, dropped like a bombshell. It aroused fears that the natural world was being dam aged, perhaps destroyed, by human tech nology. In 1972 another book, The Limits to Growth,5 raised fears of famine, overpopu lation, and resource depletion. The authors predicted that "the limits to growth on this planet will be reached sometime within the next one hundred years.,,6 When energy prices skyrocketed after the OPEC oil embargo of 1973, the book's predictions looked credible.

And, indeed, there were environmental problems. In many cities the air was dirty, and rivers were polluted and full of debris. The Cuyahoga River is said to have actually caught fire in 1969. The event became a symbol of the severity of pollution and galvanized many people to do something about it. This determination to "do something" came at a time when Americans were look ing to the federal government to solve just about any problem. The nation had just embarked on the War on Poverty, and the Apollo program to land a man on the moon was nearing its objective. State and local governments, which had taken on some responsibility for environ mental regulation, were not always aggres sive in tightening environmental regula tions, since they knew that residents did not necessarily want the.goal of cleaner air and streams to override all other goals. But environmental activists considered these at titudes parochial, unenlightened, and polit ical. They sought more control at the federal level, and they got it. Pollution control went offin a "bold new direction," says textbook author Thomas Tietenberg, with a "mas sive attempt to control the injection of substances into our air.,,7 That federal at tempt is still going on.

The nationalization of pollution control did not eliminate environmental politics, of course, but changed its location. Today, local and state governments find themselves in battles with the Environmental Protection Agency as it threatens to cut offfunds if they don't meet the EPA's standards. And con gressmen from one state pit themselves against those of other states, with the in dustrialized "Rustbelt" states in the North east and Midwest voting to impose heavier controls on new plants built in "pristine" areas such as the growing "Sunbelt.,,8 A Basic Misunderstanding All this has happened because most peo ple don't know that economic growth and ENVIRONMENTAL PROTECTION: THE NEW SOCIALISM? 297 environmental protection are closely and positively linked. Economists are well aware of this. A study by Gene Grossman and Alan Krueger of Princeton University9 suggests that at low levels of income, eco nomic growth puts initial stress on the environment, but after a certain level of wealth is reached the environment begins to improve. They indicated, for example, air pollution begins to decline when per capita income reaches between $4,000 and $5,000 (in 1985 dollars).

Another indication of this link is the affluence of environmentalists. For exam ple, members of environmental organiza tions tend to be among the more aflluent Americans. A typical reader of Sierra, the magazine of the Sierra Club, earns twice the average American income. 10 In other words, as people become more affluent, they become more interested in protecting environmental amenities. That doesn't in itself eliminate pollution, which willcontinue as long as the air and water are, to some extent, "free goods." But in a system based on private property rights, several factors encourage people to limit pollution. One factor is the common law, specifi cally the legaldoctrines of public and private nuisance, trespass, wrongful bodily inva sion, and riparian law. Although court suits are used less now, in the past when pollution was severe and when it affected a few people disproportionately (not the community as a whole), courts would provide protection, either through damages or injunctions against further pollution. People have a right against invasion of themselves or their prop erty by harmful pollutants. This protection has never been perfect, but it has prevented or ended severe pollution.

Second, over the long run, the profit motive encourages owners to reduce pollu tion. Over the short term, they may be able to lower costs by letting waste out the smokestack, but that waste costs them money. Particulates in the air often are unburned fuel; by using that fuel rather than letting it go up the smokestack, companies can save money. Similarly, companies can save money by saving expensive chemicals or metals rather than losing them in the waste stream. So there is· an inexorable tendency to reduce pollution. These two reasons explain why the air in the United States was getting cleaner faster during the 1960sthan in the 1970s,when the Clean Air Act was passed. 11 And private property rights also encourage efficient use of raw materials. In 1965, the production of 1,000 metal beverage cans required 164 pounds of metal (mostly steel). By 1990,this required only 35 pounds (mostly aluminum).12 And the trend is toward ever lighter cans for the. simple reason that it is possible to save millions of dollars. Reducing the aluminum can' s metal by 1 percent will save about $20 million a year. 13 The profit motive spurs both inno vation and cost savings.

Another illustration of this trend toward efficiency is Mikhail Bernstam' s compari son of resource use in socialist and market economies. He found that the market-based economies used about one-third the amount of energy and steel, per unit of output, that the socialist countries used. 14 Partly due to the growth of incomes and the growing awareness of the environment, private conservation has been a hallmark of American society for more than 100 years. Late in the nineteenth century, for example, the National Audubon Society created a system of bird refuges around the country; early in the twentieth, the Sempervirens Club began saving California redwoods, in large part through private donations. In the 1930s, activist Rosalie Edge and a small group of friends bought a few hundred acres to create the Hawk Mountain Sanctuary in eastern Pennsylvania, to stop the slaughter of birds of prey . But this rich vein of history , of which these examples are mere nuggets, is little known.

The Situation Today: Hopeful or Disturbing? In the late 1980s,Ocie Millsbegan to build a home for his son near Santa Rosa County, Florida. He poured clean fill dirt on the 298 THE FREEMAN • MAY 1996 property. Although he had the approval of state officials, he had failed to obtain a permit from the federal government for filling a wetland. Mills and his son each served a 21-month prison sentence for fail ing to obtain a permit. 15 Criminals to some, they were to others victims of regulatory excess. And gradually, individuals such as the Mills were joined by hundreds, and then thousands, of people who had felt the encroachment of the federal government. These people formed grass roots groups around the country and be came the nucleus of the modern property rights movement, a movement that has been called a revolution. 16 The anger of these people who felt their rights had been tram pled helped bring sweeping changes to Con gress in the 1994 election.

The 1994 election was greeted by jubilant expressions of hope for a rollback of major regulations, repeal of some laws, and a general recognition that less government is better. And the new House of Representa tives started out with substantial plans for regulatory reform. But these quickly fizzled. The reason is the same one that bothered Robert Heilbroner-the feeling that eco nomic growth and environmental protection are incompatible without the strong arm of federal regulation. Environmental activists found that they could build on this idea and frighten people into thinking that the 1994 election had unleashed a destructive mon ster. Unfortunately, the strong positive role of the private sector in protecting the environ ment is mostly unknown to Congress. Even Newt Gingrich, House Speaker and pro ponent of less government, appears to be completely unfamiliar with free-market environmentalism. The "moderate" Republi cans, terrified at losing the moral high ground by being viewed as anti-environmen tal, have stopped the reform movement.

What is needed is a better understand ing of environmental protection, and partic ularly its connection with economic growth and the institutions.that promote economic growth. This educational process will take time, but the evidence is there to achieve that understanding. To borrow Heilbroner's words, that is our "transcendent chal lenge." D 1. Robert Heilbroner, "After Communism," The New Yorker, September 10, 1990, p. 91ff. 2. Ann Reilly Dowd, "Environmentalists Are on the Run," Fortune, September 19, 1994, p. 98. 3. Christopher J. Bosso, Pesticides and Politics: The Life Cycle of a Public Issue (Pittsburgh: University of Pittsburgh, 1987), p. 111. 4. Rachel Carson, Silent Spring (Boston: Houghton Mif flin Company, 1962). 5. Donella H. Meadows et aI., The Limits to Growth: A Report for the Club of Rome's Project on the Predicament of Mankind (New York: Universe Books, 1972). 6. Meadows et al., p. 23.

7. Thomas Tietenberg, Environmental and Natural Re source Economics (Glenview, Ill.: Scott, Foresman and Com pany, 1984), pp. 293-4. 8. Robert W. Crandall, Controlling Industrial Air Pollu tion: The Economics and Politics of Clean Air (Washington, D.C.: The Brookings Institution, 1983), pp. 129-30. 9. Gene M. Grossman and Alan B. Krueger, "Environ mental Impacts of a North American Free Trade Agreement" (Discussion Paper in Economics, Woodrow Wilson School of Public and International Affairs, Princeton University, Prince ton, N.J., February 1992), p. 5. 10. 1992 "MRI Reader Survey" (San Francisco: Sierra Club, 1992), p. 1. 11. Crandall, p. 19. 12. Lynn Scarlett, "Make Your Environment Dirtier Recycle," The Wall Street Journal, January 14, 1991. 13. William F. Hosford and John L. Duncan, "The Alu minum Beverage Can," Scientific American, September 1994, pp.48-53. 14. Mikhail Bernstam, The Wealth of Nations and the Environment (London: Institute of Economic Affairs, 1991), p.24.

15. Richard Miniter, "Wetlands Send Man up the River," Insight, December 14, 1992, p. 31. 16. Bruce Yandle, Land Rights: The 1990s' Property Rights Rebellion (Lanham, Md.: Rowman & Littlefield Publishers, Inc., 1995), p. ix.