Once again, be careful what you wish for

by Sandy Ikeda

I’d wager that many of us who’ve lectured to our classes on environmental economics have at some point suggested that one way to eliminate pollution is to stop all forms of energy-consuming and pollution-generating production.  That would kill most of the human (and a lot of the non-human) inhabitants on earth, but it would probably preserve the natural environment (in the long-run, that is, after all those nasty carcasses get washed away).  The point being, of course, that there’s such a thing as having too little pollution, and that there are better and worse ways to lower pollution.

Next time, you might want to use this article from the latest (November 22, 2008) The Economist.  Thanks to skyrocketing gas prices (at least until lately), the housing collapse, and the impending recession, Californians may actually come close to hitting the ambitious targets for renewable energy and greenhouse-gas emissions mandated by Governor Arnold Schwartzenegger for 2020.

It also mentions the greening effects of redirecting home construction from the hot interior of the state to the coasts, where cooling costs – and thus energy consumption – is significantly lower.

The drift to energy-intensive regions now seems to have abruptly slowed. Inland housing markets that were booming a few years ago are now so awash with foreclosed homes that building has become futile. Housing starts in the Inland Empire have fallen by 82% in the past three years, compared with 47% in Los Angeles. Builders in foggy San Francisco are actually busier than they were.

There may, of course, be a conflict between conservationists, who yearn to preserve undeveloped coastline, and environmentalists who want to reduce the use of fossil fuels.  An article that appeared in the May 29, 2008 The Economist pointed out that “there is plenty of room for more concrete on the coast. Between Orange county and the city of San Diego, for example, lies little besides tomato farms and a military base. To save the planet, fire up the bulldozers.”

Anyway, Governor Schwartzenegger, aggressive environmental hero, wanted to reduce California’s pollution in the worst way.  He seems to have gotten his wish.

4 thoughts on “Once again, be careful what you wish for

  1. On a related note, I wonder if Californians infatuation with environmentalism at any cost is contributing to their high unemployment rates. I’m out on long island, but it seems that Californians are suffering worse than we are, even being close to Wall Street.

  2. There was a good article on the City Journal website
    titled “California’s Potemkin Environmentalism”. I think the author of that article does a great job of laying out all the ramifications of misguided environmental policies. Can’t recommend it enough.

  3. The ‘textbook’ economists’ solution to pollution and greenhouse (not exactly the same thing), at least from members of the ‘Pigou Club’, is revenue neutral carbon taxes, or at least, revenue neutral pollution charges.

    The logic is excellent but the pragmatics is poor. Governments never seem to do anything revenue neutral and the solution seems to sweep the detection and enforcement difficulties under the carpet.

    It reminds me of a discussion of municpal garbage collection. It was proposed by one participant that ‘user pays’ charges on garbage was the way to go. That would give people an incentive to reduce and recycle their waste and would reward the less wasteful. But another participant jumped in, ‘if that system was applied, people would just throw their garbage over their neighbour’s fence when he wasn’t home.’ So a ‘free service’ is probably better when the goal is a neat neighbourhood.

    I suppose the ‘lesson’ here is that the task of designing solutions to pollution and carbon output is actually a lot tougher than it first appears and the real ‘solution’ is perhaps more likely to emerge by real world trial and error than deep thought.

  4. NEW YORK (Associated Press) – A government report on new-home construction and building permit applications for October is forecast to show declines for the fourth straight month as the housing sector is pulled down by falling prices,

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