Grid Brief: White House Humiliates Itself With OPEC+
My friend Emmet Penney runs an excellent daily energy newsletter called Grid Brief. I highly encourage to you subscribe to it by clicking here. The piece below is from the…
We are often told that capitalism is destroying the planet, and that the only way we can repent from causing environmental degradation is to switch from a capitalist system to a socialist system. This thought process, however, could not be more wrong.
Today we are going to talk about air quality in the United States, versus some other countries that have adopted more command and control economic systems.
If command and control economies are cleaner because capitalism incentivizes pollution, then we should be able to look at examples of countries that were less capitalistic, or even hostile to capitalism, and see superior environmental protection, but this hasn’t happened.
Air pollution in the Soviet Union was worse than in the United States, on a per unit of GDP basis:
“According to the Soviet environmental protection agency, air pollution ranked highest on the list of environmental problems that faced the
Soviet Union. On the eve of the collapse of the USSR, the country produced roughly the same volume of air pollution as the United States, despite its lower economic output. Meanwhile, the high concentration of industry focused the environmental and public health impact of air pollution in urban regions, resulting in citizens living in many industrial areas suffering some of the worst air pollution in the world.
The United States produced about 127 million tons of air pollutants in 1988, making the volume of the two countries’ emissions approximately equal. As can be seen in Table 2.3, stationary sources generated the same volume of air pollution in the Soviet Union as in the United States, despite the fact that the Soviet economy before the breakup of the USSR was generally estimated to measure one-fourth to one-half that of the United States. Soviet performance compared with that of the United States was even worse in the transportation sector.
Motor vehicles serve as an example. In the United States, automobiles emitted 70 million tons of pollution in 1988.12 Although U.S. motor vehicles overall produced about 85 percent more toxic fumes by volume than those in the Soviet Union, their numbers were far greater: In the United States, there were approximately twelve times as many privately owned automobiles as in the Soviet Union.13 In terms of usage, U.S. trucks hauled more than twice as much freight as their Soviet counterparts, and U.S. buses 17 percent more passengers.1
CIA estimates of Soviet gross national product can be used as a crude yardstick to determine that the Soviet economy produced roughly
$26,000 of output for every ton of air pollutants in 1988. The corresponding figure for the United States was about 50 percent higher—$38,000.”
Capitalism doesn’t just incentivize efficiency, it demands it. In situations where markets are working properly, the most efficient players have lower costs than those who waste resources, and this gives them a competitive advantage, allowing them to sell their products at a lower cost, or increase their profit margins by selling their products at the same cost as their competitors.
Command and control economies don’t function this way. Revenue losses in these countries are blamed on not having enough resources allocated by the government for investment, or even unfair competition from capitalist countries who want to undermine the regime.
If you want a more modern example of how socialism destroys the planet, tune in tomorrow as I discuss how yesteryear’s socialist utopia, Venezuela is exhibit A in how socialist regimes eventually disregard the environment to keep themselves afloat, resulting in chaotic political and social situations, where indigenous communities and the environment are put at risk by economic hardship, a corrupt military, armed gangs and guerrilla bands.
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