Environment and Markets

...In the laissez-faire market vision, nature becomes land...

...In agriculture most governments maintain some kind of subsidies for several reasons: to support the rural social structure, assure national food security, stabilize prices, and protect the environment...

...Also, other energy alternatives would become more competitive...

...If only one respondent said it was of infinite value, that would throw off the survey...

...Giving them powers to protect themselves, with mandated worker health and safety committees in every workplace, protects everyone else...

...It would be better for everyone if they devoted their resources to promoting energy efficiency, but they will only do so, in most cases, if they are compensated for part of sales forgone through efficiency-reduced demand...

...But what's remarkable is how limited the response was, considering the potential...

...Even now the grass-roots protesters among environmentalists exert pressure on the bigger, established environmental groups that are entrapped in the rulemaking squabbles of federal legislation and tempted to form alliances with big corporations (at times having an influence, yet also subtly losing their independence...

...By one estimate, corporations from rich countries dumped twenty-four million tons of hazardous wastes in West Africa alone in 1988...

...What Forces Will Work Best...

...Critics have charged, with compelling evidence, that the shortterm preoccupations of American business have weakened the American economy...

...It gives the wrong price signals, the wrong information...

...No model of society is natural...

...Nor can anyone survey future generations on their valuations of nature...

...Now that the air in Mexico City is nearly suffocating its residents, private entrepreneurs are peddling breaths of oxygen (this will register in the Mexican economy, although breathing did not count as a growth industry when the air was clean...

...So what do we do with markets...

...A factory owner doesn't pay to flush waste down the river or into the air...

...Increasingly some environmentalists argue for "green taxes" that would adjust prices upward to include uncounted environmental costs...

...Japanese industries have become leaders in efficiency because "the government spurred their enthusiasm through a carefully coordinated, longrange program that continues even today," the Wall Street Journal recently reported...

...Yet many businesses have chosen the path followed by a large segment of southern California's furniture industry: faced with tougher emissions standards, they fled to Mexico, where pollution laws are not enforced...

...You can't have a market in pollutant rights until you have pollutants...

...Laissez-faire religion rests on the blind faith that maximizing profits will over time yield the most rational results...

...For example, many farmers would like to shift from a less chemically intensive regime, especially as they become aware that it is not only economically viable but much healthier...

...Green consumerism and protest already have had some impact...

...First, there is nothing intrinsically good—and a lot bad— about high energy prices...

...There are similar problems if more direct environmental regulations are subjected to cost-benefit analysis: how much is a human life worth...

...Why should society wait until after the dirty deed is done to try to clean up the mess...

...Besides guaranteeing a free and full role for citizen protest, which big corporations especially want to eliminate, it is important that workers have broad powers to influence the safety and health of their work environment...

...How does the market allocate the right of a few generations in the twentieth and twenty-first centuries to use up most of the world's nonrenewable hydrocarbon resources...

...A full-scale industrial extension service to promote energy efficiency and nonpolluting tech518 • DISSENT Environment and Markets nologies could speed industrial transitions with less disruption...

...But making the transition can be too costly —for example, suffering severe losses for several years until alternative controls of pests and weeds begin to work well...

...Time is not concrete history, incorporating natural biological processes, but rather an infinite series of equivalent seconds...

...There is increased interest in energy or carbon taxes to discourage fossil-fuel use and give better signals on the true costs of burning hydrocarbons, especially nonrenewable sources...

...Often dismissed as NIMBYism—not-in-my-backyard— these movements are often concerned about other backyards as well...

...Much of the efficiency gain was driven by government regulation as well as by market factors...

...Certainly there is no way that the earth can support the spread of wealthy, industrialized nations' current extravagant consumption to the world's poor...

...Because the economy was ill-prepared to absorb the shocks, much of the stagflation of the decade can be attributed to everybody's efforts to pass on the costs to someone else...

...Then there would be attempts to cope, by cutting back some use (much use is not very discretionary), and then, more important, by increasing efficiency...

...The market also fails to value adequately the depletion of nonrenewable resources...

...Wall Street Journal editorialists growl that "sustainable" economic growth is synonymous with no growth (which, if true, would be a profound indictment of capitalism...

...Surveying people about how much the animals are worth to them or measuring lost income if sea otters disappeared may keep a few economists employed, but it does not answer the question...

...So, the market doesn't adequately account for either negative or positive externalities...

...Or take another example, representing a more familiar route in the eighties...

...prohibitions against asbestos, a major Canadian resource, as trade-distorting, and the United States has protested British Columbian reforestation programs as tradedistorting subsidies of the Canadian timber industry...

...A mixture of direct government actions (purchases, subsidies, prohibitions, research, and technical assistance) can be combined with changed market incentives (for example, taxes and markets in efficiency) in ways that complement each other...

...Both Germany and Japan have tougher standards than the United States and are growing faster...

...For the same reasons that bedevil other efforts to price nature, such discounting fails to assess the future value of the environment...

...It's true that businesses respond as market conditions change—but not always for the general good...

...If we change our calculation of national income to eliminate both eating society's seed corn and dealing with its noxious by-products, our real gains look much more modest...

...It is possible, of course, for governments to use trade rules to raise standards of countries with lax rules, but the drift will almost certainly be toward restraint of regulation, since the forums of international decision making on trade are relatively insulated from popular pressures and dominated by multinational businesses and banks...

...But thereby, Daly and Cobb argue, "society has lost a perpetual stream of golden eggs...

...McDonald's, responding to a campaign against its styrofoam clamshell, has switched packaging and is considering composting of its food wastes...

...A new model of society can aspire to respect nature and to make culture and nature as compatible as possible...

...How these distinct strategies emerge varies, but the general point is that when free marketeers talk about giving businesses flexibility and allowing the market to stimulate innovation, part of the flexibility and innovation will be socially good and part terrible...

...Instead of quibbling over how much toxic substance can be released, regulation should increasingly establish a standard of zero discharge...

...Degradability is just a marketing tool...

...Some economists argue that it's the person's likely future lifetime earnings...

...Like the proverbial canaries in coal mines of the past, they are the first victims of pollution and toxicity...

...Likewise, nobody pays for the Amazon forest serving as "the lungs of the world" or preserving its diverse life forms for the future...

...Second, taking the capitalist world as a whole, and if we include its less-developed portions, market economies do not have such a clear superiority over the dismal record of the communist bloc...

...But its resources of flora and fauna are lost, its land rendered useless...

...The specter of global warming or holes in the ozone layer suggests that we could reach the limit of our use of nonrenewable fuels faster than we actually exhaust the earth's resources...

...Ecological principles have become the basis for alternative models to capitalist markets, conflicting with or complementing the longstanding social class critiques...

...The tax [on pollutants] can't work until you've done the wrong thing," Commoner says...

...Even though deep-pockets energy corporations bought up solar cell firms in the seventies, U.S...

...Considering the environment narrowly, free trade is likely to encourage the further depletion of the soil in major exporting countries like the United States while further impoverishing the peasantry in many lessdeveloped countries...

...The market, for example, does not take into account the externalities of human poverty and inequality, economic dislocation, stunted work lives, and destruction of community...

...In little more than a decade after the first OPEC price increase, the energy intensity of the U.S...

...Ecology, they contend, is ultimately sound, profitable business and environmental regulation must employ market forces if it is to succeed...

...Other businesses sense a good market, although many are as duplicitous as Mobil Chemical, whose representative said its "biodegradable" plastic trash bags "are not an answer to landfill crowding or littering...

...Life becomes labor, or abstract labor-power, and patrimony becomes capital...

...Why hasn't the price of energy—even taking into account the decline in real oil prices in the mid-eighties—spurred more response...

...Litigation over Exxon's Alaska oil spill or over compensation to the victims of Union Carbide's Bhopal disaster suggests the ethically and economically knotty problems...

...Workers and the poor have long been disproportionately exposed to hazardous substances and pollution...

...But the presumption that humankind's use of the world is the sole measure of its value is arrogant...

...If the United States succeeds, the setting of environmental and food safety standards will be further removed from popular influence and subordinated to dictates of international trade...

...For a Brazilian gold miner or peasant, suffering in an economy burdened by huge external debts, short-term market rationality may dictate destroying the forest (just as the short-term rationality of the banks collecting their debts indirectly destroys the forest...

...But ironically it also requires granting nations and communities power to enforce stronger standards to respond to their own local needs without having those undermined in the name of free trade...

...Much of the progress toward environmental sanity in the United States has come as a result of grass-roots protest, environmental impact fights, and legal action over local issues...

...In the long run, altering the "economic man" outlook of market society will make environmental goals easier to attain...

...The answers that economists derive may depend as much on social values as they do on analytical solutions to well-defined problems...

...Nigeria exported tropical hardwoods far faster than the trees' rate of renewal...

...And trying to measure the environment in terms of clean-up costs makes the neat presumption, easy in economics but questionable in nature, that all processes are reversible...

...companies have been abandoning the field, in some cases selling off to European firms...

...When we consider how long certain toxic substances and especially radioactive wastes are likely to remain threats, the problem is compounded: we rob the inheritance of future generations and leave them with a poisonous debt...

...It's obvious that energy is mispriced and consequently misused, but relying on taxes to bring about a change through the market is likely to create great hardship for low- to middle-income people and increase inequality...

...Free Trade" Hurts the Environment International trade raises particularly thorny issues about the environment...

...All human societies have been shaped by interaction with nature, from the nomadism of hunters to the settled cultures of rich ecological niches, such as our own Northwest Coast or the slash-and-burn agriculture of tropical forests...

...Just as the middle class woke up to the need for public health when urban epidemics began to spread to its neighborhoods, so environmental 516 • DISSENT Environment and Markets assaults have now become everyone's concern...

...Other environmentalists, however, continue to share a skepticism, with roots in both conservative and leftist traditions, about the compatibility of the market and the environment...

...Regulation Can Help Competition Free-market enthusiasts insist that private businesses be allowed to innovate in response to market signals...

...FALL • 1991 • 517 Environment and Markets How Do We Deal With Markets...

...When we run out of oil or some other resource, free marketeers argue, then the price will go up and ingenious capitalists will respond with appropriate solutions...

...The soot-darkened skies and fouled waters of Eastern Europe have given apologists for laissez-faire capitalism a new rallying cry: the "free market," far from being nature's enemy, is the environment's savior...

...FALL • 1991 • 513 Environment and Markets But Hubbard acknowledges that "calculating the actual cost of energy is not a simple matter...

...This is already happening to a small extent with bans on whaling and the ivory trade and international agreements on reducing chlorofluorocarbons...

...After all, even before the OPEC price hikes, Germany and Japan used roughly half as much energy per unit of GNP as the United States and afterward still made efficiency gains nearly as great or greater than the United States did...

...Obviously, the private market damages the natural environment because pollution is external to the balance sheets of private business...

...From a free-market perspective, it may be rational for the private owner to kill the goose that lays the golden egg—if it can be sold now for more than its discounted future value and the proceeds invested...

...Public investment would be needed to develop mass transit and railroads...

...The real environmental successes have only come with outright bans of certain substances, such as lead in gasoline or paint...

...auto industry, forced by federal standards as much as by prices, made dramatic efficiency gains, the auto industry is still far from realizing the potential of diesel or gasoline engines, not to mention more advanced power sources...

...Environmentalists have contended that we must recognize limits to growth, a most unpopular prospect for both liberals and conservatives...

...Places with distinctive features disappear into an interchangeable abstract space...

...But prevention can't always be outright banning: for the foreseeable future, at least some hydrocarbons will be burned...

...Ecologists have also opened another front in criticizing not just the adequacy of market mechanisms but also market society in general and its exaltation of individual acquisitiveness and unbridled growth of commodity production...

...But this would also minimize any national democratic voice in environmental issues...

...The solution is prevention...

...For example, the United States loudly protested European bans on hormone-fed beef as a trade barrier (although some American beef exporters could have easily met the standard...

...It ignores negative and positive externalities, ill accounts for depletion of natural resources, inappropriately measures income and welfare, and fails to take responsibility for future generations' welfare...

...Then land itself is left out of the calculation, with the assumption that it is interchangeable with humanly created capital...

...Ultimately, despite imported trappings of economic analysis, the decision is social: what does society value...

...Technically, the limit to a sustainable economy is the amount of solar energy falling on the earth that can reasonably be captured, even though there are much stricter limits on supplies of nonrenewable resources...

...Nightmare of Consumption Despite our own problems of inequality of consumption, which tear at the social fabric of the United States, an overemphasis on commodity consumption is the industrialized world's environmental nightmare...

...Example: as European forests were depleted for charcoal, industry turned to coal...

...By contrast, ecology reminds us that we live in a concrete world, and that we often end up committing real, not just intellectual, violence upon nature, humanity, and history...

...This highlights another limit to the market model of efficiency: there are significant cultural differences, especially regarding long-term investment, and differences in levels of government support for alternative energy policies...

...As economist Herman E. Daly and philosopher John B. Cobb, Jr...

...Increasingly, public utility commissions are enforcing such policies, and municipally owned utilities have aggressively pursued this service-oriented alternative because they are not profit oriented...

...Although earlier cultures undermined themselves by radically altering environments, stripping forests from the hills of Greece or raising the salinity of irrigated Mesopotamian soil, the worst depredation of the environment has come since the rise of capitalism...

...The alternative does not have to be for the richer nations to take vows of poverty...

...All values are reduced to prices...

...But electric utilities want to sell electricity...

...industries, such as chemical, synthetics, and fabrics, have gained international competitiveness...

...In massconsumption societies self-fulfillment is defined in terms of buying more things, which leads to a disproportionate use of the world's resources and contributes to waste crises, from localized conflicts over municipal dumps to global destruction of the ozone layer...

...And nature itself has forever been altered by human culture...

...If we used our nonrenewable resources not simply to live but also to invest in renewable productive capacity for future generations, they argue, then our use of those resources could be justified...

...What society needs is an inexpensive way to get necessary work done without the externalized costs...

...Nobody asks the sea otter how much otters are worth...

...Of course, if raw materials were more accurately priced and if corporations were responsible for what happened to the waste they produced, there could be more reusable or at least recyclable packaging and less waste, all without a loss of meaningful consumption...

...The disastrous effects of centralized government control in the communist countries should remain a reminder that government is no guarantee of virtue...

...Although the U.S...

...Other industrialized countries are more energy efficient than the United States because of public investment in their public mass transit systems or because of explicit government strategies, such as Danish support of wind power...

...The nature of society, not just its size or technology, is largely responsible for the crisis in nature...

...For many years, West Germany annually shipped millions of tons of toxic wastes to the corrupt East German regime, a not-so-expedient solution now that West Germany must take responsibility for those dumps...

...By the 512 • DISSENT Environment and Markets early 1960s, Daley and Cobb's Index of Sustainable Economic Welfare for the United States diverged from the GNP, no longer growing as fast...

...Especially in making a major transition, the market is sticky, chaotic, and inefficient...

...Automobile manufacturers are to some extent captives of tastes they have created, but like the rest of the autooilhighway complex, they have a huge stake in keeping changes incremental—only anticipation of direct governmental edicts on alternatives to gasoline engines is leading manufacturers to gear up for electric vehicles...

...Some environmentalists have argued that there is no fundamental conflict between environmental responsibility and "free market" economics...

...Under the GATT rules that the United States is pushing, it might be illegal for individual states to set higher environmental standards, as California voters considered with the "Big Green" initiative...

...Even more important, a focus on finding these market solutions diverts us from the main point...

...There is a fundamental conflict, Daly and Cobb argue, between short-term profit maximization and the real needs and concrete resources of the whole community far into the future...

...Still, raising the price to some estimated real price would be a clumsy, slow, inequitable way of bringing about needed changes...

...We're talking out of both sides of our mouths because we want to sell bags...

...Some of our problems come from relying on the dynamics of commodity production rather than considering what needs we have and how those can be best served...

...With regard to nature, myopic economic calculation is even more devastating...

...U.S...

...But it is socially undesirable to treat the corporation as a black box, ignoring what goes on inside it and tinkering only with the price signals going in and then coping with what comes out...

...Some environmentalists (including the Environmental Defense Fund and a group convened under senators Tim Wirth and the late John Heinz called Project 88) have argued that market-oriented regulations, such as tradable permits for discharges, will achieve environmental goals efficiently...

...Yet even within a capitalist framework, farsighted investment at the expense of current profits often makes sense...

...Again, future generations are largely ignored...

...Public policy, however, should determine the direction...

...But income, properly speaking, must be sustainable...

...Both affect market responses...

...Eliminating subsidies to dangerous or polluting sources, such as nuclear power, would also give more appropriate prices...

...In many cases, transitions to zero discharge may take time...

...Or take the case of photovoltaic cells, clearly a much-needed technology of the near future...

...In the name of free trade and eliminating market distortions, the United States has tried to impose new trade rules through the GATT—General Agreement on Tariffs and Trade—as well as through free-trade agreements with Canada and, now under discussion, Mexico...

...More recently, the industrialized countries have attempted to export their wastes, especially toxic wastes, to desperate or corruptible Third World countries...

...Many less-developed countries have for decades mined their natural resources to supply the industrial world without generating sustainable development for themselves...

...Such cost-benefit analyses illegitimately import values of the marketplace to answer questions that arise because of fundamental flaws in that same market system...

...This is especially true in an era when large, multinational corporations dominate the global economy: their power, size, and internal governance distort idealized market responses to price signals...

...q FALL • 1991 • 519...

...By other calculations, we should now be paying more than $100 a barrel for oil if all costs were included...

...Ideally, a transition would not greatly increase energy bills but would increase energy prices steadily in tandem with changes to alternative, renewable energy sources, a different mix of technologies, and greater energy efficiency...

...First, there would be economic shock and an increase in inequality...

...Its advocates want a more aggressive democratic voice in what are usually private decisions...

...Economists often discount a future sum of money, figuring its present value as the amount that, if put in the bank at current interest rates, would yield the future sum...

...Even many industries simply don't understand how energy efficiency can benefit them...

...energy users don't pay directly for as much as $300 billion a year in subsidies and tax credits (at least $50 billion a year, mainly to fossil fuels and nuclear power), environmental degradation, damage to health, military expenditures (the Gulf War alone would have added approximately $25 a barrel to imported oil), or employment effects of energy policies, according to Harold M. Hubbard, a scientist at Resources for the Future...

...Depending on the prices of permits or the level of taxes imposed, polluters could decide it was still cheaper to pollute...

...Many businesses around the world have become more innovative and competitive as a result of strict environmental regulations...

...There must first be clear public policy...

...But has capitalism itself been the cause of environmental damage or is the root problem industrial technologies or a growing population that consumes more and more goods...

...argue in their book For the Common Good, we should count as income only our sustainable production, not our consumption of natural capital (depleted fuels, minerals, or soil, for example) nor our expenditures coping with the negative environmental effects of production...

...During that period, using tradable permits or other market-oriented methods should be considered along with flexible regulation...

...experience after the OPEC price increases of the 1970s illustrates the mixed record on market response to higher energy prices...

...The marketplace not only poorly accounts for what we dump into the environment but also what we take out...

...There are countless other ways in which businesses and consumers would not respond rationally or quickly even to prices that fully reflect environmental costs...

...What makes one company prevent pollution while improving its ability to compete and another company endanger its employees and the surrounding community or flee abroad...

...Free trade in agriculture is likely to undermine these aims...

...Already a lively international commerce has developed in environmental destruction...

...Why does one business seize opportunities to become energy efficient and another respond to competitive pressures by shortchanging workers...

...If consumers had to pay directly for the full price of energy, several things would happen...

...Since the defense of the market usually rests in large part on its ability to allocate resources efficiently and provide accurate information through prices, this failure to incorporate the environment is not a trifling flaw...

...Corporate policies vary significantly...

...economy—energy per unit of GNP—dropped by about one-fourth...

...But rather than a panacea, such devices represent an interesting gimmick of unproven value...

...Can it be corrected...

...Will Government Regulation Work...

...And there would obviously be public clamor to do something—from unleashing nuclear power to promoting solar energy...

...In general, the proportion of income spent on energy declines as income increases, although the use of energy increases (at the lowest income levels a decline in car ownership modifies this trend...

...In taming the market to protect nature, we should not forget the well-being of those most curious natural creatures— ourselves...

...The United States also wants to prevent any food safety standards that aren't "scientific," a proposal that in practice means setting a lowest common denominator...

...The highly individualistic, cost-minimizing, profit-seeking mentality of market society is not a result of "human nature" but a cultural construction that denies a place for many values and feelings that have appeared in most human societies...

...They insist that they recover the entire cost of efficiency investments in a year or two, although they might plan on recovering other investments in five years...

...the costs are borne by nature as well as other people who share the environment...

...At 3M Company, executives wisely instituted its "Pollution Prevention Pays" program and have saved $482 million since 1975, eliminated five hundred thousand tons of waste, and saved another $650 million through energy conservation...

...So, correctly pricing the environmental effects of human activities is at best rough guesswork, an attempt to squeeze profound issues of value into a Procrustean bed of price...

...Green consumerism is an important phenomenon but is likely to remain marginal without other reinforcing measures...

...Two observations: First, the dumping of wastes in poor countries is but an extension of domestic policies: hazardous-waste sites and dumps of all sorts in the United States are concentrated in poor areas, especially near minority communities in the South and Southwest...

...Given the scale and toxicity of human activity today, waiting for the market to signal a need for change may result in catastrophic, even irreversible damage, such as global warming or extinction of valuable species...

...The logic of free-market economics creates untenable abstractions, as Daly and Cobb, following economic historian Karl Polanyi, emphasize...

...If you limit the response to how much a person would be willing to spend, the result would obviously be affected by how much money people have, a standard flaw of market preference analysis...

...On the other hand, if a farmer preserves a marsh that cleans the stream's water, nourishes fish and wildlife, and prevents floods, he is paid nothing for those services...

...That requires greater international cooperation...

...If future people could be consulted, they would never sign the one-sided contract now being written...

...Deferring Gratification Again, the calculations of the market are inadequate...

...The implications of the environmental critique go beyond traditional ecological issues...

...Environmental concerns should be added to many other motivations—political, philosophical, religious—to challenge the model of "economic man" that market society helps to create...

...But what happens when a company compares polluting and nonpolluting alternatives and calculates that pollution does pay...

...The worst environmental insults are a result of modern industry, but not all industries degrade the environment equally...

...Sometimes consumers don't directly make decisions: developers or 514 • DISSENT Environment and Markets landlords may make choices based on their costs, leaving tenants with higher bills...

...Now it is possible to level the playing field with taxes, fees, or penalties for the polluter, but it is difficult to assess the price of damage to the environment, especially if it is not a localized toxic spill but a global problem, like the greenhouse effect...

...As a result, it is now a net importer of wood products...

...But if he sells it to be filled in for a shopping center, he will make money, and our accounting system evaluates this as economic growth, with FALL • 1991 • 511 Environment and Markets no deductions for the loss of the wetland's natural functions...

...And private companies are largely incapable of making the kinds of massive investments needed for expanded rail or mass transit...

...The fundamental flaws in the market, from the environmental perspective alone, are enough to undo economists' claims for marketplace superiority...

...all are historical, cultural creations...

...Consumers often are ill-informed about alternatives and find it difficult to make lifetime energy cost assessments (cheap initial cost of a regular incandescent bulb is more persuasive than the argument that lifetime costs of an expensive compact fluorescent are lower, for example...

...Further, using technologies that are commercially available now, the United States could reduce its electric energy consumption by 70 percent at less than the present cost of generating electricity, according to analyses by efficiency guru Amory Lovins's Rocky Mountain Institute...

...The result was a major explosion in Pasadena, Texas, that killed twenty-six people and spread toxic materials throughout the environment...

...Clearly government in the United States and elsewhere has often been the captive of corporate interests...

...Some of the most strictly regulated U.S...

...The only evidence for efficiency so far comes from econometric studies already biased towards market solutions...

...Already with the United StatesCanada free-trade agreement, Canadians are protesting U.S...

...Many similar critiques of the market can be made on behalf of other cultural values...

...FALL • 1991 • 515 Environment and Markets Why let private business make that momentous decision...

...There are large-scale institutional obstacles to change as well...

...First, we must put them in their place, and that place is secondary to considerations of social values...

...One clear lesson to learn from Japan is that forcing core industries to become more energy-efficient is one thing that government can do well...

...If an ingenious entrepreneur devises a pollution-free production process that costs more than her competitor's, she will probably lose the market race: in most cases, nobody— except for a few generous souls—will pay the tab for her contribution to the common welfare...

...Energy production, including new sources of oil, increased in response to higher prices—but far less than mainstream economists predicted...

...That makes an Indian peasant pretty expendable compared to a Connecticut executive...

...The question is: how do we get there in the most socially desirable way...

...Environmental values, like other values, must be cultivated among the electorate if public policy is going to change...

...True, there are flaky manifestations of new-age spiritualism associated with the environmental movement, but the desire for a sense of human community and harmony with the world is widespread and authentic...

...But the U.S...

...economy, with some governmental encouragement, also became more energy efficient...

...Now there is the prospect that human society has such an unsustainable relation with nature that both the future of humanity and the fate of thousands of other creatures is at stake...

...The general aim is to reduce most subsidies and many regulations that are portrayed as barriers to trade...

...Although the rapid growth of both population and global consumption magnifies every environmental impact, there are huge differences in environmental effects among nations, even the industrialized ones...

...Who Determines the Losses...

...Nearly all these regulatory regimes represent attempts to control emissions, but as ecologist Barry Commoner argues in his book Making Peace with the Planet, regulatory efforts have at best slowed only slightly the rate of environmental deterioration...

...We want homes and offices that are comfortable and well-lighted...

...The market needs to be subordinated not only to nature but also to broader human values that form a limiting framework...

...In different ways, then, the extreme inequities of income generated in the global market exhaust the planet—from the pressure of impoverished Third World masses on the land to the disproportionate consumption of nonrenewable resources and generation of waste in the richest countries...

...By the 1980s, sustainable economic welfare actually declined slightly despite growth in the GNP...

...They advocate giving businesses more flexibility and incentives, such as the right to buy and sell pollution rights, to increase efficiency and innovation so as to meet environmental goals...

...If the government developed a strategy for transition to an essentially solar economy, then regular increases in energy taxes could be used for a variety of projects, including research...

...Free trade militates against democratic national control and undermines the role of government...

...There are numerous objections: such trade legitimates pollution, it is likely to disadvantage the poor and powerless (especially if conducted on an international scale), regulatory regimes are already fairly flexible, and markets in such permits may be hard to establish and inefficient...

...How much is a sea otter worth?, Business Week asked...

...But these ecological inequities are part of a more general pattern of inequity in income and political power that market economies generate...

...Direct government intervention is, despite market mania, often the best route...

...But if energy taxes are going to work most effectively, it should not be simply through the indirect effect of higher prices but also through the investment of the new revenue in efficiency and alternatives...

...Environmental danger has long been an unequal opportunity employer...

...Federal, state, and local governments can have a tremendous impact: government purchases of solar cells or hydrogen- or electric-powered cars could speed the learning curve and cut prices quickly...

...Phillips Petroleum, under pressure of debt incurred in fighting off a hostile takeover, laid off experienced union workers and replaced them with ill-trained contract workers, took shortcuts on safety, and pushed production to the limit...

...The 1990 Clean Air Act revisions introduce such tradable permits, and the Chicago Board of Trade now plans a futures market in pollution permits...

...This camp is also dissatisfied with the results of the first two decades of environmental regulation...

...We can conclude that for several different reasons the market doesn't accurately price goods so as to take account of their environmental consequences...

...Environmentalists are divided over what are the limits to the earth's capacity, but markets have no way of even considering the question: unending growth is both their assumption and goal...

...Environmental values lead to a model of society that subordinates the market to nature, but environmentalists cannot claim nature as their model any more than the free marketeers can call their model "natural...