Save the Economy, Save the Environment

Whole Foods profit has fallen 32 percent, reflecting changes in consumer demand during economic hard times. It appears that organic food becomes a luxury item that must be dispensed with when times get hard. Despite the fact that organic food isn’t necessarily any healthier or better for the environment than conventional food, many people view it as environmentally superior and are willing to pay more for it—but only up to a point. There is a lesson for environmentalists to learn here. Wealth creates the will and the ability to pay for environmental amenities.

For example, when people have more spare change, they donate more to conservation groups that can privately manage lands to help save species. Wealth creation also means demand for better, cleaner energy sources. Despite what many greens seem to think, modern fossil fuels used in wealthy nations represent an environmental improvement over burning wood or things like animal dung as is done in developing nations.  In fact, rudimentary fuel sources create serious air pollution problems that have made respiratory illnesses a major cause of death in poor countries. Wealth also means the development of technologies that enhance our ability and will to control emissions, provide proper disposal of wastes, and purify drinking water. (For more on how poverty is bad for health and the environment  see here)

Ironically, most environmental activist groups seem to think that wealth creation—and profits—are the cause of environmental decline. Hence they fight these forces, opposing things like privatization of water because someone might make a profit. But their policies leave the world poor and lacking in things like clean water. And they also fight a main engine of growth: free trade. The failure of genuine environmentalists to understand this fundamental reality about wealth undermines their own cause because wealth depleting policies harm the environment.

Unfortunately, environmentalists not only misguided ones. Environmentalists fight wealth in the name of the environment, and lawmakers fight wealth in the name of the economy, as our stimulus policies reveal.

See CEI’s Environmental Source for more information on environmental quality issues.