Re-entering the Fray / Free Market Enviromentalism

Before I go into my post, I’d like to say a few things. First, let me convey my apologies for being lax about my participation here at LL&L this semester. As some of you may know, I am graduating from Bethany College next week, so this has been my final semester. Congrats to me – I finished my comps this week and have been notified that I am graduating from Bethany with Distinction. Yay!!!

Also, I’ve just been notified by IHS that I’ve been accepted to the Liberty & Current Issues Summer Seminar at Catholic University in D.C. this July. I am quite excited about that, and I hope that maybe I’ll see some of you there.

Now to the post…

Interesting set of articles in The Economist magazine this past week about environmental issues. Among them a discussion about how our ability to assign price to environmental factors is increasing the markets ability to account for those factors efficiently. For example, it has been found that coffee fields planted within one kilometer of a forest are 20-plus percent more productive than fields further away, and that the key difference between them is the increased natural pollination that occurs as a result of forest-dwelling insects. In this way, the presence of that forest is worth, to the farmer at least, the margin of increase in productivity.

Another example is some of the forested area on Panama’s Pacific coast. Medicinal scientists have been documenting for some years now numerous cures (or likely cures) that exist in the swampy muck and moldy undergrowth of that region. Large pharmaceutical companies are already clamoring to gain rights to those areas in order to leave them undeveloped, because in this case, the trees and swamps have enormously more value than condos and golf-courses, that is, if one is operating on a longer time horizon.

Granted, these are not a perfect demonstration of the free market at work, and getting market systems to take hold with regards to environmental stuff has much further to go in terms of sophistication. Most significantly, there are still many perverse incentives written into national laws throughout this country and Latin America. But it does signal a move in a generally good direction. The more that the market can demonstrate itself capable and competent in assigning accurate value/price to environmental concerns, the more likely governments are to abandon the command-and-control regulatory/prohibition model that so dominated green-policy over the last three decades in favor of a market-oriented approach. I’d strongly encourage those of you who are interested in the intersection of the free market and the environment to pick up a copy of The Economist for April 23-29, 2005 – it’s worth a look.

See also: abetterearth.org the IHS site dedicated to applying the free market to the environment.