Saturday, January 03, 2004

Why environmental regulation is necessary

One of the favourite memes of free-marketeers is that government regulation on pollution and the environment is unnecessary, as companies can and will voluntarily curb their emissions. Bush has bought into this hook, line, and sinker, and promoted a voluntary scheme to reduce carbon emissions. So, in the free market paradise that is America, you'd expect it to be a stunning succes, right? Wrong!

Only a tiny fraction of the thousands of U.S. companies with pollution problems -- 50 in all -- have joined Climate Leaders, and of the companies that have signed up, only 14 have set goals. Many of the companies that are volunteering say they did so either because reducing emissions makes good economic sense or because they were being nudged by state and federal regulators.

Industry groups, meanwhile, have crafted their own programs under a Bush administration initiative called "Climate VISION," but none of the programs requires individual companies to either enlist in the program or set goals for emission reductions.

Many of the companies with the worst pollution records have shunned the voluntary programs because even a voluntary commitment would necessitate costly cleanups or possibly could set the stage for future government regulation, according to industry insiders.


"Some just see it as a slippery slope," said a lobbyist for several major utilities.

Meanwhile, an administration official has the gall to claim "[Companies] are stepping up to the plate in a way they never have -- never did in the 1990s". Yeah, right. Most of the participants "are perennial 'good citizens' who were participating in 'green' programs years before Bush called for volunteers." Everyone else just goes on spewing their crap into the environment like they always did.

The reason voluntary schemes don't work of course is because polluters are not forced to pay the full cost of their activities. Rather than shell out for cleanup, health costs and mitigation of effects, they are able to externalise and dump these costs on other people (meaning, ultimately, us poor dumb schmucks at the bottom). This requires government regulation, either to impose those costs, or to threaten punishment unless polluters clean up their act.