Wednesday, August 18, 2004

Distend, Discard, Disintegrate

We’ve all heard mainstream environmentalists tell us to engage in the three R’s: reduce, reuse and recycle. We’re told that these things need to be done to save the planet. There are only so many resources and natural habitat and as the world population swells, these things will obviously become rarer and rarer. The ecological stress is too great and every environmentalist who hasn’t doomed humanity yet warns that the apocalypse is rising.

Resource economics is one of the most interesting branches of the study of choice because its proper application is usually counterintuitive. But understanding it is not that different from understanding most economics. A change in the state of the world changes prices. A change in prices changes incentives. A change of incentives changes behavior. Because of these constantly demonstrated rules, conventional environmental wisdom does more harm than good. If you really want to save the environment, even at high costs (a sacrifice many environmentalists say they are willing to take), then you should do the opposite of the typical policy.

Distending is the process of expanding capacity from an internal source. As classic mantra demands people use fewer resources, I say people should start using more. This change in behavior raises prices and creates incentives for people to find substitutes. Iron is substituted for steel, steel for aluminum and aluminum for oil-based plastics. Dupont is currently developing organic polymers.

Discarding is simply throwing things away instead of using them again. For example, avoid using both sides of paper when writing. Using more paper means corporations like the International Paper Company will have to cut down more of its privately held trees (the company owns more than a million acres for this expressed purpose; that’s about as large as Delaware). It will then grow trees to replace the ones it cut down plus grow more in anticipation of higher demand. If the price of paper rises high enough as the consumption of it increases, the company will add thousands of more acres where the trees grow peacefully for decades.

Disintegration is when an object is de-atomized, preventing anyone from recycling it. Using gasoline is an easy way to disintegrate resources. As more and more oil is used, the price increases and people start turning to renewable (and cheaper) sources. When California had an energy shortage a few years ago sales of clean energy sources skyrocketed, especially solar panels.

An effective environmental policy would be to drive your SUV to the local office supply store, buy all their paper and then throw it away along with the soda cans you quickly went through. Obviously this process is rather expensive—that’s the point. But any environmental policy (effective or not) will incur costs. I personally think those costs are too high (Office Max has a lot of paper) but considering the Sierra Club receives millions in donations every year, there are clearly some that are willing to shoulder the burden.

Skeptics of DDD might say that human society has reached the “limit” to technological progress—we can’t rely on it. How could technology possibly provide alternative for conduction or energy? To demand to know how the future will answer our questions is to insist the impossible. It’s literally asking to predict the future. We can’t imagine how the world will change no more than IBM and the Wright Brothers could imagine our world of computers and airplanes. When people use our ignorance of the future to justify environmental laws, they insult all of humanity and ignore the breadth of history. The doomsayer’s predictions always depend on everything staying the same. That’s the one thing we know won’t happen.


-Ron said...

For Whom the Counterintuitive Bell Tolls

Environmental policy has long been one of those libertarian sticking points. This, because we allowed the other side to set the terms of the debate, and we now find ourselves trying to re-educate a public who is already religiously indoctrinated. This is not entirely unlike what it would be like trying to tell a Christian who has already bought into the idea of the Trinity that Jesus was actually not God. You just don’t get many buyers. David is absolutely correct: enviro-econ is often counterintuitive, which means that our position usually looks to the world as being bass-ackward. Do what is an Austrian to do?

We have to teach by example. We need a libertarian groups with the visibility of the Sierra Club, where free-market environmental policy is put into action and seen to work. Some think tanks like The Thoreau Institute do seem to at least be wrestling with the academic aspects of this debate, even if they themselves are not an activist organization. For a whole page of free-market environmental issues visit this website. Here are some others. Finally, this is my favorite. This is a listing of Anti-Environmental Organizations from a “green” website. Therefore, this is probably a good list of people we should generally support.

The really big problem, it seems to me, is the fundamentally different appreciation about environmentalism. Free-market types believe in sustainable development. The “green” wing seems to endorse “no” development. Free-market types believe that change is facilitated through incentives. The “green” believes in government regulation. These are fundamentally different ways of coming to the table. The good news is that most of the members of the harder-line organizations often believe more like us – they feel some responsibility for the environment, and often want to do “their part.” Well, that’s admirable – as long as we can get on the same page as to just exactly what that is. But in the public relations game for the environmental soul of America, ask not for whom the counterintuitive bell tolls, it tolls for us.

Anonymous said...

While I see in principle the logic of what you're saying, I think you're ignoring a large part of the environmental argument.

For most environmentalist, the point of not using gasoline is not to conserve resources, but to reduce emissions. The point of recycling aluminum is not to save aluminum from being mined, but to reduce the damage associated with mining.

Your plan (while economically sound, I'm sure), neglects to take into account one of the the main ideas behind reducing, reusing, and recycling. Do not only slow the use of resources, slow the flow of waste that the production of these resources use.

Also, many of these resources are the very same ones needed to produce alternative energy. Aluminum prices skyrocketing? So will the price of wind power, which relies on aluminum parts to construct the turbines. Gasoline prices skyrocketing? Then so will the price of wind power, using oil-based components. The same with second-generation solar cells made with oil-based polymers. You could use the old-fashioned ones, but those are backed with aluminum. And aluminum is now rahter expensive (remember?).

I hear you on the paper thing, though. That's a plan that is counterintuitive, but it does make a lot of sense once you think about it. Plus, it'd be funny to go into Office Max and ask for a few thousand reams of paper, only to dump them in the trash behind the store.

Chris said...

Sheeesh. Well, with the two of you being at least two hours ahead of me you both write a post and reply to it before I even have the chance to read it and then there really is nothing more to say. Thus, I resort to the lowest common denominator, comedy. I get a kick out of David's suggestion to go to the Office Depot and buy all the paper you can and just dump it out the window. Weee, that sounds like fun to me! Perhaps it would be best to do this while revving up a Hummer down a highway doing 90 and also chucking out aluminum cans and other "precious commodities." Oh boy, sounds like my idea of a good time (which usually involves pissing other people off, especially lefty enviromentalist types.)

Chris said...

Anonymous just asked whether or not these libertarian enviromentalist plans ignore the negative externalities that are produced by using the resources that we are trying to preserve (in partiuclar, gasoline.) Well, I believe that part of the fact is that using more gasoline now will drive up the price and mean that alternative energies are developed sooner and if they are developed sooner then actually there would have been less gasoline consumed than there would have been if we were trying to get by on less consumption but over a longer period of time. So, actually, Anonymous, there would be less negative effects under David's plan than there would be under the status quo.

-Ron said...

To Anonymous:

1. Wind mill blades are made of titanium, though that’s a small point.

2. As for the effects of mining, this again is a problem with the state. The government shields mining (and other industrial) companies from most of the kinds of civil action that would deter these companies from engaging in environmentally destructive practices in the first place. The EPA, fir example, gives pollution credits for cooperating with the government. And in many cases, it is cheaper for a mill to just pay the fine that it is to implement the technology to clean up in the first place. This is due to a complex web of federal regulations, mostly EPA, which make it legally and financially safer for everything from power plants to steel mills to stay with sometimes decades-old technology than to upgrade and risk coming under the jurisdiction of new regulations. In other words, it’s safer to remain grandfathered in without the regulatory headache. It’s not that libertarians disagree with the things that propel you to recycle, reuse, and so forth. But we see these as treating only the symptoms, not the disease.

3. As for recycling, another often overlooked aspect of these principles are their money-saving nature. For many things, it makes sense to recycle and reuse. The average family, for example, can save a great deal of money over the long term by using energy-efficient appliances, fuel efficient automobiles, fewer paper towels and plates, and other disposable items generally. This basic market response if often overlooked by environmentalists when making their arguments (or, at least, do not provide concrete examples and “how to” info).

4. Mountain-top removal. Living in West Virginia, this is one of the headaches that I have to deal with. Talk about complete environmental degradation! There are huge externality costs associated with this process, but as mentioned in #2, companies are often shielded from liability through government shenanigans. But as I mentioned in my previous comment in this thread, this is an area where preservation organizations are missing the boat. If you don’t want a mountain mined, then buy it (or at least the mineral rights to it). By doing so, you have a great deal of leverage to prevent extractive industry from doing its thing on that land. The bonus here is that where these companies operate is usually rural, often mountainous land. It’s cheap. The taxes on it are cheap. So an organization that can put its back into national-level fundraising could afford to buy up huge tracks of land (or rights thereto) and administrate them as that organization saw fit. Perhaps putting the land into a private trust with multiple owners, so that an added legal barrier is created that prevents possible trouble down the road. The coal companies (or whatever industry) says, “we own the mountain, we’ll do as we please.” The only way you can fight that, quite simply, is to play on the same field – and that field is called property rights and ownership.