Tuesday, December 08, 2009

Questions that Should be Addressed by Environmentalists

The world is about to meet in Copenhagen about the future of Global Warming. In spite of chilling news of the revelation of thousands of emails that indicate that the alarmists have distorted information about climate change, world leaders seem to be on pace to move on with an aggressive agenda designed to massively expand government control in virtually every industry. The environmental agenda includes heavily taxation and increased regulation of many industries.

With this agenda, it is time to ask some serious questions.

What kind of impact have these policies had on other countries?

Although most European countries have been passionate in its environmental activism, one of the most aggressive has been the country of Spain and the results have been disturbing for any country considering a similar approach.

A study (by Gabriel Calzada Álvarez PhD) about Spain's efforts provides an insightful view of the negative impact the pursuit of green jobs have had on the economies of Europe. The chasing of "green jobs" is nothing new, according to Calzada. He points out that European countries have lived under regulations and subsides for the development of such industries since 1997, and the economic impact has been both impressive and very negative.

According to Calzada, Obama's "model country" of Spain has lost 2.2 jobs for every job created. That translates to 9 jobs lost for every four new jobs provided. Calzada goes on to extrapolate the numbers and points out that, if the US was "fortunate" enough to create 3 to 5 million green jobs, it would do so at the lost of at least 6.6 to 11 million jobs that already existed. For most Americans, this is simply too big of a price to pay.

What is also disturbing is how much these green jobs cost. According to the study, each job cost an incredible $800,000 each. This for jobs that often only pay approximately $15 an hour. In a situation where the US unemployment rate is growing at a rapid pace, this type of cost for employment and the trade off of pre-existing jobs is a difficult sale.

The technology/prosperity question.

The countries with the worse environments, generally speaking are poor and have primitive technology. The countries who have made the biggest strides in the environment are economically rich. When countries are poor they simply have fewer resources to improve the environment or to make better technology.

I remember an encounter I had while conducting seminars on Free Market economics. When I traveled to Eastern Europe and the former Soviet Union, I was in shock at the pollution levels. Poland was particularly bad. I remember escaping to a local park because of the trees there made it easier to breathe. Much of the time my eyes simply watered and I coughed. It was miserable. I had a meeting with an economist in the Polish government and he noticed my distress and he quickly concluded it was due to pollution levels. He said that Poland did not lack regulations and in fact "we have the toughest environmental laws of any country in the world." Sure enough, I did my homework, and that was true at the time. This gentleman became quite philosophical about the problem, stating "the problem was recognized long ago by Aristotle who said 'What is common to the greatest number gets the least amount of care. Men pay most attention to what is their own; they care less for what is common; or at any rate they care for it only to the extent to which each is individually concerned. Even when there is no other cause for inattention, men are more prone to neglect their duty when they think that another is attending to it.'" The economist went on to say that he hoped that the efforts the country was taking towards free markets would lead to more ownership and better care of the environment.

Later, in another meeting he said, "the answer to these environmental problems are found in technology, not regulation." I liked the sound of that, so I asked him to go on, he said"as we recover economically and have more ownership, we will enjoy greater capital formation, which will lead to better and more efficient technology. That, more than anything else will reduce pollution." I casually responded, "I have never seen a poor country that was not polluted" he shrugged his shoulders, lifted his hands in the air and said "neither have I."

The rhetoric coming from Copenhagen seems to be ignoring the scandalous emails that have rocked the environmental movement, the negative impact this agenda has had on jobs, and the linage between prosperity and technology. Watch carefully what comes out of this event.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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