Free Markets Make Every Day Earth Day

Each year, Earth Day offers an opportunity for politicians and others to highlight their support for environmental policies. Most of the work of environmental sustainability, however, occurs quietly every day as the free market encourages individuals to conserve energy and resources while planning for future prosperity.

Today, we celebrate the days which are not Earth Day, rejecting public acts of environmental symbolism, to celebrate the quiet, everyday acts that have made the real difference in environmental sustainability. Here are five of countless examples that come to mind.

1. Hybrid cars. While government subsidies and regulations, especially in California, were promoting all-electric and hydrogen cars, hybrid cars became the environmental benchmark. The Honda Insight and Toyota Prius didn’t benefit from government subsidies. They were not fully included in California’s green car law until 2007, nearly two decades after the initial green car regulations were passed. Toyota and Honda saw an opportunity to build a market niche, and their vehicles are now the most common public symbol of environmentalism.

2. Energy efficiency. The most potent force for reducing energy use is the incremental push to use less energy and keep costs down — a drive that is central to the free market. This force has been extremely powerful. Since 1950, the energy intensity of the US economy has been cut by two-thirds. We are doing more with less — the very definition of sustainability. It is worth pointing out that the only time energy intensity got worse was during the early 70s when President Richard M. Nixon put price caps on energy.

3. Expanding forests. While the state’s Department of Ecology spent yesterday warning 5-year olds about deforestation by reading “The Lorax,” the free market has been expanding forests. The United Nations reported earlier this year that “Forested areas in Europe, North America, the Caucasus and Central Asia have been increasing steadily, growing by 25 million hectares over the past two decades.” The report does not address deforestation concerns in poorer countries, which makes the point that the prosperity that comes from free markets is also good for expanding forests.

4. Reducing waste. As with energy, the free market also pushes to reduce waste, using resources more efficiently. For instance, the weight of all goods produced in 2006 was only slightly higher than in 1946 despite the fact the economy was seven times larger. Plastic bottles are a good example. Arrowhead’s Eco-Shape bottle uses 30 percent less plastic than previous versions. The individuals at Arrowhead pursued this technology because it reduces the amount they spend on plastic and reduces the weight they need to ship, saving energy. The same thing is true for the entire economy.

5. Air quality. It is no accident that air quality in wealthy countries is better than poorer countries. Technology and innovation have worked to improve air quality even before the U.S. passed the Clean Air Act in 1970. For example, sulfur dioxide emissions began falling before 1970 and before the cap-and-trade system to reduce acid rain was implemented in the 1980s. Innovation and a drive for more efficiency also meant improved air quality. Politicians are quick to claim credit for this trend, but they ignore data before 1970 and they downplay the role that innovation played in making their policies possible. The free market empowered politicians and environmental improvement, not the other way around.

Thanks to free markets, the environmental health of the planet is improving better every day. The Pacific Research Institute has released an excellent assessment of the environmental state of the planet in its annual “Almanac of Environmental Trends.” This doesn’t mean there are no environmental challenges, but it does mean that those challenges can be best addressed by the technology and incentives that come from the free market.

Comments (1)

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  1. H. Sterling Burnett says:

    Todd makes a great point, I wrote a number of years ago examining the countries facing the worst environmental crises, they were all either Eastern bloc, former communist countries or countries with no strong property rights and corrupt or failing government institutions need to defend people and property. Time and again, market economy’s have been shown not just compatible with environmental quality but rather leading to environmental improvement — at least when strong property rights are upheld.

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