investingfromtheright

I am retired and take educated guesses on all things financial.

June 15, 2008

June 15,2008: A Clean Look At The Environment

Years ago, Libertarian Harry Browne published a novel position paper on the environment and how to resolve pollution issues. You may find his approach interesting and controversial. I find the premise engaging.

The word "environment" covers a multitude of issues -land and water pollution, conservation, recycling, global warming, the ozone layer, air and water quality, endangered species and even population control.

Land and Water Pollution:

When environmentalism became a religion in the 1970s, little attention was paid to the ownership of the properties being polluted. Important questions were never asked publicly:

Why would the owner of a lake or river allow it to be used for dumping chemical wastes - a practice that would destroy the value of the property?

Why would the owner of a forest cut the trees for profit, and then ignore the future profits to be made by replanting?

At first glance, pollution doesn't seem to make sense. Why would anyone destroy the value of their own property? Would you intentionally pollute your front lawn knowing this would make your home worth less? Not likely.

And yet, many properties throughout the United States and the world are losing value because the owners have allowed them to become polluted. In most cases, the culprits are governments.

The key to understanding pollution problems is a simple fact. Most pollution has occurred on government property - on government lands, and in government streams, rivers and lakes.

There are three ways pollution occurs:

1. Private companies can pollute their own property.
2. Governments can allow private companies to pollute government property.
3. Governments can pollute their own property.

When you read that some company has polluted a river or a lake, realize that the government owns the waterway, and it has failed to keep it clean.

Funny that public outrage over pollution isn't directed at the government - only at corporate polluters. And when the outrage reaches a crescendo, governments often respond by harassing private companies and property owners - those who have kept much better care of their property than the government has.

Quite often, when direct comparisons are made, private ownership equals "clean" while government ownership over the decades equals "polluted".

For example, the government-owned forests in the Blue Mountains in Oregon have suffered permanent damage. Nearly all the seed-bearing pines have been destroyed and much of the forest has been devastated by insects. Next to this forest is a Boise Cascade forest that has suffered practically no insect damage. Boise uses logging practices that keep the forest replenished, protecting its investment. As a result, the Boise Cascade forest looks very much as it did a century or more ago.

The same comparisons exist when properties are used for mining and grazing. Private owners protect and rarely pollute, but when private companies lease government property, neither the companies or the government have any incentive to protect the value of the property.

The most effective way to reduce pollution and waste is to have the government sell its properties to companies who will safeguard their future value.

The EPA estimates the cost of cleaning up all sites the U.S. government has polluted to be in the neighborhood of $325 billion dollars - five times the cost for all the privately polluted SuperFund sites.

The solution to America's pollution problem is to get as much property as possible out of the hands of government. Private owners will always take better care of land and other resources because they worry about their future productivity and resale value. Governments have no incentive to care about future value of anything under their care unless it is politically expedient.

AIR POLLUTION:

Air pollution is more complicated than land or water pollution. It isn't easy to define ownership and sort out air pollution problems in court. Five points are overlooked when people call upon the U.S. government to clean up the air:

1. The Constitution gives the federal government no authority to regulate air quality.
2. What does the federal government have to do with dictating air quality in individual cities? Do we really believe that Washington politicians know what's best for every part of the country? Or that money sent to Washington will become even more valuable than if it were left behind in the state from which it came?
3. Environmental regulations are weapons for the politically connected, just as any other government activity is.
For example, the EPA forces a new factory in Tennessee to install the same anti-pollution equipment as a plant in Los Angeles needs, even though Tennessee has no smog problem. This imposes unnecessary costs on the Tennessee company.
4. Cars built in the 1960s polluted much less than cars of the 20s,30s,40s and 50s. But in 1960 there was no EPA. Why did automakers build cleaner-burning cars? Because that is what people wanted - and once the technology was available, that's what they got. Government doesn't have to force manufacturers to provide what people want. But, if we let politicians decide what's good for people, we are giving the politicians the power to exploit people on behalf of those with the most political influence.
5. When politicians address an issue, they almost always focus only on the highly publicized areas and ignore aspects that might be more important - or fail to recognize unintended consequences of their actions (ethanol, anyone?).

Whatever may be the best remedy for air pollution, it certainly is not to give politicians the power to force their choices on your car, your city, or your life.

RECYCLING:

Government subsidies for recycling programs assure that valuable resources will be wasted.

There is a simple test to determine whether some resource is scarce enough to warrant recycling. If the price of a recycled item is less than the price of producing a brand new item, it's time to recycle.

If you don't get paid when you turn in items to be recycled, and if recycled items cost more than brand new products, it's obvious that the recycling process is using more precious resources than those that produce the item from scratch. It that case, recycling merely satisfies someone's belief that sacrificing your time and money will make you a better person. It's a religious matter, not a conservation issue.

ENERGY:

The same principle applies to other environmental enthusiasms. If the government has to subsidize alternative energies such as ethanol and solar, it is obvious that the government is trying to induce us to quit using a resource in ample supply and switch to a more expensive one in shorter supply.

LANDFILLS:

Is recycling necessary to offset a shortage of places to put trash?

No. If all the solid waste for the next thousand years were put into a single space, it would take up 44 square miles of landfill - .01% of the U.S. land space.

Recycling does not save trees - it eliminates them. Trees are planted in response to future demand for new paper and timber products. If people recycle paper products, fewer trees are needed and fewer are planted - just as the supple of grains, meat, minerals or anything else is a response to the demand for these items.

So, if you throw away paper products after you've finished with them, don't feel guilty. Feel proud that you're reducing pollution, saving valuable resources and inspiring timber companies to plant more trees.

GLOBAL WARMING:

From the cranberry cancer scare of the 1950s to the Alar-in-apples hysteria on the 1980s, from the "New Ice Age" of the 1960s to Global Warming at present, environmental alarms almost always turn out to be false. Few non-political scientists fear ozone loss, global warming or acid rain. These are issues that some people hope to use to reorder the lives of the rest of us.

The Carter Administration's Global 2000 Report predicted mass starvation, massive amounts of pollution and increasing hunger and poverty for all people by the year 2000 unless "the nations of the world act decisively to alter current trends". Decisive action, of course, was further government control of all resources. Of course, none of these global calamities came to pass.

Funny, when the New Ice Age that was predicted in the 1960s didn't pan out, Global Warming took its place. What's next - dangerously moderate temperatures?

These scares - and many more like them - were all accompanied by urgent demands that the government take action and thereby reduce the freedom of mankind to wantonly destroy Mother Earth and impose oppressive controls on your life.

As with all of the above, the preferred solution is always the same: MORE GOVERNMENT.

The politicians and environmental extremists make most of the noise, but there are tens of thousands of Americans who are doing things that actually make a positive impact on the environment. Energy-efficient plants, deregulation of the power industry so that power companies will have an incentive to reduce energy costs, the Nature Conservancy instead of government controlled lands, changing habits through buying more efficient vehicles etc.,etc.

WHY THE ENVIRONMENT IS SO IMPORTANT TO POLITICIANS:

"Conserving resources" means taking them from you and putting them under political control.

"Ending global warming" means forcing you to pay higher taxes for entremist projects that lack scientific certainty.

"Recycling" means vast power for those who will decide what you must recycle and what you'll be allowed to throw away.

"Protecting endangered species" means the power to seize your land and stop growth that is often vital towards maintaining our standard of living.

"Controlling pollution" means controlling you.

For politicians the environment is the perfect issue. We should remember that no problems will be solved by people who gave us the U.S. Postal Service, the bank crisis and the tax code.

A great deal will be improved by reducing the federal government to its Constitutional limits, telling the politicians to stop playing Junior Scientist, and let motivated individuals deal with the problems society discovers.

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