- Crawford School of Public Policy
- Australia-Japan Research Centre
- Australia South Asia Research Centre
- Bulletin of Indonesian Economic Studies
- Centre for Applied Macroeconomic Analysis
- China Economy Program
- Development Policy Centre
- East Asian Bureau of Economic Research
- Indonesia Project
- Tax and Transfer Policy Institute
Jeff Bennett is a Fellow of the Academy of Social Sciences in Australia and a Distinguished Fellow of the Australian Agricultural and Resource Economics Society. He is a member of the Academic Advisory Council of the Centre for Independent Studies and an elected member of the Mont Pelerin Society. From 2007 to 2011, Jeff was Director of the Environmental and Economics Research Hub at ANU.
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From policy to politics through to personal decisions, thinking ‘green’ is changing our lives in numerous and profound ways. But are those decisions based on the best evidence? PROFESSOR JEFF BENNETT writes that we need to look out for ‘little green lies’.
Debates with a focus on the environment are often the fiercest. Many people hold strong views that they are willing to put forward with great vigour. Arguments are advanced that there should be ‘no waste by 2020’, that population growth must be controlled, and that trade and economic growth have to be restricted. The justification for these positions is to ‘protect the environment’, frequently with the added rationale, ‘…for our children’.
Politically, these ‘green’ views are holding more and more sway. Policies ranging from national carbon taxes right through to subsidies on local recycling schemes have been fostered by the strength of these arguments. But are these policies in the best interest of the nation as a whole? Or are they based on propositions – a set of ‘little green lies’ – that are at best questionable and, at worst, deceptive?
One reason for questioning them is that they represent the views of a particular group in our society. By implementing policies based on the demands of this special interest group, the rest of society may be made worse off. For instance, subsidising the production of renewable energy means that electricity consumers have to pay more.
Another point of doubt relates to the unintended consequences of green-inspired policies. Such policies are generally focused on achieving a very specific goal and can fail to recognise their impacts in other dimensions. For instance, the installation of rainwater tanks in suburban backyards means that less water is drawn from public reservoirs, but it also means more use of other resources like oil (used in the manufacturing of the plastic tanks and to fuel the pump that delivers the water to the household). Ignoring these other impacts can mean that society as a whole is made worse off. Even the environment can be harmed overall by enacting these blinkered policies.
So what are these ‘little green lies’, and what’s the truth that they’re disguising? Here are 12 of the most worrying, and my response to each of them.
1. ‘Peak oil’:The annual production of oil, while rising over the last century, has levelled off and is about to fall because of growing scarcity. Such is our dependence on oil and the fast rate at which we are using it that we now need to take active policy measures to save what we have left.
No-one knows for sure what petroleum reserves are available. As known reserves are depleted, oil price rises stimulate more exploration and technological advances. These will expand the available supply of petroleum and stimulate the development of substitute energy sources. Oil price rises will also help to restrain oil consumption and re-channel energy demand to substitutes.
2. ‘Renewable energy’: Non-renewable energy supplies are being depleted so quickly that we will soon experience power shortages. Non-renewables are also ‘dirty’ sources of energy. Renewable energy production must be stimulated to ensure the ongoing supply of clean energy.
Renewable energy sources are limited in their short- to medium-term potential to meet demand. They are also more costly. Governments picking renewable energy ‘winners’ to be subsidised are likely to be wrong-footed by rapidly evolving technological change. Renewables have their own environmental downsides.
3. ‘Indices’: People need to be aware of the impacts they have on energy, ecology, water, climate, etc. when they buy goods and services so that they can reduce their impact on those resources. Each resource is scarce and valuable. We need to conserve them, especially for future generations. Indices such as ‘food miles’, ‘ecological footprint’, ‘embodied energy’, ‘virtual water’ and ‘carbon footprint’ should be mandated to help people make the ‘right’ decisions.
By focusing on just one scarce resource – such as water or energy – in their consumption decisions, people can ignore their impacts on other scarce resources. A ‘false economy’ results. When impacts on multiple resources are combined in an index, more distortions arise. Prices do a better job of signalling resource scarcity.
4. ‘Population’: More people means more pressure on the world’s scarce resources, including the environment. The only way to protect the environment, stop starvation and ensure that there are enough resources for future generations is to stop population growth.
People are a resource. They have the capability to develop innovative technologies and institutions to deal with growing scarcity in specific resources. New ways to satisfy people’s wants and new sources of scarce resources can be discovered. If limits are installed, who will they affect?
5. ‘Economic growth and trade’: Economic growth, fuelled by international trade, means more pressure on scarce resources, including the environment. To protect the environment and to save resources for future generations, trade should be restricted to cut growth.
Trade and growth bring wealth to people. Wealth increases people’s demands for environmental protection and the ability of society to provide environmental protection, especially through technological development.
6. ‘Waste’: Waste should not be ‘wasted’. It is a resource that can be re-used and recycled. Sending waste to landfill means that more ‘virgin’ resources must be harvested/mined. Waste in landfill can also be a source of air and water pollution.
Recycling and re-using ‘waste’ is a process that uses scarce resources. Policies that prevent landfill disposal can cause more resources to be used than they save and do not necessarily reduce virgin resource use. Landfills need not be pollution sources.
7. ‘Efficiency’: Resources such as water and energy are scarce. Use of these resources needs to be minimised so that future generations will have enough. Governments should invest in technologies that will ensure the least amount of energy and water is used in producing goods and services.
Investing in ‘efficiency’ measures often means using other scarce resources as substitutes for energy and water. A ‘false economy’ results because the other resources, including labour and capital, may well be scarcer than energy and water.
8. ‘The infinitely valuable environment’: The environment provides us with our ‘life-support system’. Without it we cannot survive and so we should protect it at all costs.
Without the environment we could not exist and so its absolute value is infinite. However, that is not the relevant question for policy. Changes to the state of the environment yield finite benefits and costs that need to be traded off when making policy decisions.
9. ‘Climate change’: Human-induced global climate change is a serious threat to the continued ability of the planet to support humanity and current ecosystems. The damage caused by climate change will be so large that greenhouse gas emissions must be reduced now.
Reducing greenhouse gas emissions is costly. The decision to bear those costs should be made with reference to the expected benefits that reduced greenhouse gas emissions would provide. Reducing greenhouse gas emissions will not eliminate the risk of climate change.
10. ‘Private sector environmentalism’: The environment provides ‘public goods’ that should be available to all free of charge. That means the government has to be responsible for caring for the environment. The private sector will either destroy it or try to profit from it.
The public sector will face problems managing the environment. Gathering information for effective decision-making is costly. Politicians’ and bureaucrats’ incentives can conflict with the public’s best interest. Private solutions can be lower cost and better aligned with what the community wants.
11. ‘Agriculture and mining’: Agriculture and mining are extractive industries which deplete our stock of natural resources, often irreversibly. They also cause environmental degradation including soil erosion, biodiversity loss and contamination of the gene pool, water and air.
While there are some trade-offs between agriculture, mining and the environment, these can be reduced through the use of management techniques and technologies. Offsets and remediation work on farms and mines can maintain and even improve the condition of the environment.
12. ‘Precautionary Principle’: If there is a risk that a proposed action will harm the environment, the Precautionary Principle requires policy makers to regulate against that harm and to place the burden of proof on those proposing an action that it will not cause environmental damage.
There is always some risk of environmental harm resulting from human action. Demonstrating that there is no risk of harm is impossible. There are also uncertainties associated with not taking action which the Precautionary Principle ignores.
All this means that watching out for little green lies is important in formulating environmental management policies. Evaluating proposed policy initiatives with reference to all the costs and benefits they generate to the whole of society and not just to interest groups is advisable.
Jeff Bennett’s book, Little Green Lies: An exposé of twelve environmental myths, is published by Connor Court Publishing.