The Right Way to Love the Planet:
Free-Market Economics and Local Regulation Are the Cures for What Ails the Environment
Twin Cities Business Monthly, June 1999
By Mitchell B. Pearlstein

In the 1970s, oil prices were rising, world reserves were estimated at 550 billion barrels, and the newly identified energy crisis was assumed to be kicking off a long, perhaps everlasting run.

By 1990, however, the real price of oil had declined, known reserves had grown to 900 billion barrels (despite the fact that the world had consumed about 600 billion barrels in the interim), and other sources of energy, such as natural gas, had flourished.

Or consider forests. President Roosevelt (Teddy, that is) warned in 1905 that a "timber famine is inevitable." Three years later, in 1908, the New York Times ran headlines announcing "The End of the Lumber Supply" and "Supply of Wood Nears End: Much Wasted and There's No Substitute."

Nevertheless, and even though the United States has led the world in timber production since the Second World War, American forests have increased in volume over the last 50 years. This has been the case because, across the continent, consistently fewer trees have been harvested than planted. Minnesota, for instance, harvested only between 40 and 62 percent of new growth from the mid-1930s to the late 1980s. And in Maine, reforestation has increased wooded areas from 74 percent to over 90 percent of the state.

Or take wetlands. While approximately 141,000 acres of wetlands were thought to be lost nationally in 1995, wetland restorations that year were estimated at 210,000 acres, for a net gain of 69,000 acres. In Minnesota, it's estimated that less than 0.01 percent of this state's wetlands were lost in the decade between 1982 and 1992.
I'm indebted for these data to a new study, "A U.S. and Minnesota Index of Leading Environmental Indicators: 1999," jointly published by the San Francisco-based Pacific Research Institute and the Minneapolis-based Center of the American Experiment. Its three authorsSteven Hayward, David W. Riggs, and Peter J. Nelson have pulled together a remarkable body of good news about the environment. That news likely will be viewed by legions as counterintuitive to the point of miraculous, given the frequency of environmental scaresbe those scares real or (more likely) not.

Can it really be true, for example, that ambient levels of sulfur dioxide in the Minneapolis-St. Paul metropolitan area decreased by 89 percent between 1980 and 1997? Or that ambient levels of lead in the metro area decreased by 87 percent between 1983 and 1997and by an even more astonishing 95 percent in the United States as a whole between 1980 and 1997? Or that between 1974 and 1995, PCB levels in herring gull eggs in Lake Superior fell by 82 percent, with something called HCBs falling by 92 percent? All are true.

Why, exactly, are environmental conditions getting better? Isn't it a near article of environmentalist orthodoxy that, as commerce and industry expand, and as consumption follows suit, that land, air, and water inevitably suffer, as do all stripes and species of life? Well, commerce and industry have been expanding, like crazy, with only relatively short breaks since before mid-century. And so has consumption. So what gives?

My three free-market colleagues don't shy away from acknowledging that federal intervention has had something to do with this. ("We do know that regulatory programs have addressed the low-hanging fruit," is how they put it.) But in much the same way that economist Thomas Sowell has demonstrated that income gaps between blacks and whites decreased faster in the several decades before affirmative action got under way in the 1960s than since that time, the report cites evidence to suggest that many environmental indicators improved at least as fast before passage of comprehensive environmental legislation during the Nixon administration as they subsequently have. (Yes, friends, the dirty, old Nixon administration.)

A portion of that improvement, the study contends, continues to be attributable to local governmental efforts; what the authors describe as an important counterpoint to the "enthusiasm for uniform, one-size-fits-all regulations." (Readers should know that while Hayward and Riggs generally prefer state and local rulemaking and oversight to that of Washington, they are best understood as leading proponents of more voluntary, market-based methods whenever feasible.)

Most decisively, though, the report discusses the "wealth effect" of economic prosperity. The idea is straightforward, if slighted and ignored in deliberations on the topic. A wealthier society, goes the repeatedly documented theory, not only is more interested in environmental issues, it also has sufficient financial and other resources to devote to those preferences. (Folks obsessed with feeding themselves and their families arc less inclined to get riled up about a little slime here or there.)
Yet in addition to spurring environmentally friendly tastes, economic growth also propels the development of environmentally sensitive technologies. This is the case because competition, by definition, mandates perpetually greater efficiency in the use of materials. Which is to say, less waste.

Perhaps the central challenge in the making of environmental policy is to maintain confidence, despite inevitable spills and the like, that wealthier is healthier for just about all living (as well as nonliving) things. And that, rather than seeking ecological purity by lengthening and strengthening the many arms of government, the better answer lies in seeking a less- fettered, more vigorous economynot just in this country, but around the world.

-- Mitchell B. Pearlstein is president of Center of the American Experiment, a conservative think tank in Minneapolis.