The false tradeoff between economy and environment
Climate progress today once again summarizes the reasons why the alleged tradeoff between economic growth and environmental protection is really a false choice. This is a story that cannot be told enough times, given how plausible and pervasive people mistakenly think this tradeoff is.
Here’s the beginning few paragraphs of the Climate Progress story:
“A top GE executive is calling the political battle between economy and environment “nonsense.”
In a video interview (featured below) at an international clean energy investment conference last week, Mark Vachon, vice president of GE’s successful Ecomagination program, hailed “environmental performance” as a key driver for business.
“There’s this theory that you have to pick one: economics or environmental performance. That’s nonsense. Innovation is the way you can have both,” said Vachon.”
I like to talk about it this way: We’re going to get our energy services one way or another. Either we’ll get them from conventional fossil fuels (like oil, gas, or coal) or we’ll deliver them with some combination of energy efficiency and non-fossil alternative sources. There will be jobs and economic growth generated either way, so the real question is, do we want jobs and economic activity that threaten our climate and cost us dearly in other kinds of pollution, or jobs and economic activity that don’t? I choose the latter!
Of course, the question of cost comes up when framing the issue this way, but this concern is easily treated by focusing on total societal cost, including externalities. For climate it’s impossible to precisely assess those risks (even though we know the risks are real and substantial), but the external costs for other pollutants are well established (and large) for fossil fuels, large enough to make many renewables already economic from society’s perspective even without including climate risks. Check out Epstein, Paul R., Jonathan J. Buonocore, Kevin Eckerle, Michael Hendryx, Benjamin M. Stout Iii, Richard Heinberg, Richard W. Clapp, Beverly May, Nancy L. Reinhart, Melissa M. Ahern, Samir K. Doshi, and Leslie Glustrom. 2011. “Full cost accounting for the life cycle of coal." Annals of the New York Academy of Sciences. vol. 1219, no. 1. February 17. pp. 73-98. [http://dx.doi.org/10.1111/j.1749-6632.2010.05890.x] and Muller, Nicholas Z., Robert Mendelsohn, and William Nordhaus. 2011. "Environmental Accounting for Pollution in the United States Economy." American Economic Review vol. 101, no. 5. August. pp. 1649–1675 for recent peer reviewed treatment of externalities.
I wrote more about the issue of externalities in my post about the EPA’s recently announced rules on mercury and other pollutants from power plants.
For those interested in a more detailed treatment of the issue of tradeoffs, see Goodstein, Eban. 1999. The Trade-Off Myth: Fact and Fiction About Jobs and the Environment. Washington, DC: Island Press.
