A return to Sanity -- Rachel Carson, Meet Adam Smith

A number of analysts, including important figures within the environmental movement, have recently been predicting its demise. The most important statement of this position is a paper by Michael Shellenberger and Ted Nordhaus, released at an October 2004 meeting of the Environmental Grantmakers Association. You can read it here.

Building upon Shellenberger and Nordhaus' argument The Economist considers the future of environmentalism. The increasing weakness and intellectual incoherence of the Green movement throughout the West, the article argues, derives from the fact that modern environmentalism has embraced an essentially Socialist ethic of command and control and hostility to markets and corporations.

“Mandate, regulate, litigate.” That has been the green mantra. And it explains the world's top-down, command-and-control approach to environmental policymaking. Slowly, this is changing. Yesterday's failed hopes, today's heavy costs and tomorrow's demanding ambitions have been driving public policy quietly towards market-based approaches.

What do they mean by market-based approaches?

If this new green revolution is to succeed... three things must happen. The most important is that prices must be set correctly. The best way to do this is through liquid markets, as in the case of emissions trading. Here, politics merely sets the goal. How that goal is achieved is up to the traders.

A proper price, however, requires proper information. So the second goal must be to provide it. The tendency to regard the environment as a “free good” must be tempered with an understanding of what it does for humanity and how....

Which leads naturally to the third goal, the embrace of cost-benefit analysis. ... The marginal cost of removing the last 5% of a given pollutant is often far higher than removing the first 5% or even 50%: for public policy to ignore such facts would be inexcusable.

The political and economic benefits of such an approach will be considerable.

[By] advocating data-based, analytically rigorous policies rather than pious appeals to “save the planet”, the green movement could overcome the scepticism of the ordinary voter. It might even move from the fringes of politics to the middle ground where most voters reside.

Such a sensible approach to environmental matters is not new. Trading schemes and rigorous cost-benefit analysis have been embraced by both Bush administrations as well as by Bill Clinton, and to some extent they have been implemented. They stand at the core of the current president's environmental policy. But cultlike extremists and partisan obstructionists have so far limited the extent of their implementation. The quality of the environment is an important issue, it deserves far more serious consideration than the Green movement has so far accorded it. Perhaps the recent spate of critiques will have some beneficial effect.

Read the whole thing here.

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