The President is right – prosperity boosts environmental quality –
It is a commonly held belief that advances in an industrial society lead to impairment of the environment. It is also a common mistake. While poor communities are usually willing to make sacrifices for some very basic components of environmental improvement such as safe drinking water and waste disposal, greater protections are not often instituted. However, as income rises, citizens raise their environmental goals and willingness to pay for a cleaner environment.
As early as 1943, prominent American psychologist Abraham Maslow showed that, once the basic needs of food, clothing and shelter are met in a society, people may demand less critical options such as greater environmental protection. These might deal with such things as cleaner air and rivers, recreation and the setting aside of protected wildlife areas. These less personal demands are usually more community-focused. Clearly, with higher incomes, citizens place a greater priority on their environment. This most definitely occurred in America following the post–World War II economic expansion, which is sometimes referred to as the golden age of capitalism.
This powerful correlation between increasing affluence and the emergence of quality of life issues was first documented in the 1950s by American economist and statistician, Simon Kuznets, the winner of the 1971 Nobel Memorial Prize in Economic Sciences. It led to the development of the Environmental Kuznets Curve (EKC), shown below as extracted from Climate Change Reconsidered II: Fossil Fuels (CCRII: Fossil Fuels), a 780-page report issued last year by the Nongovernmental International Panel on Climate Change (NIPCC). It has been demonstrated to be applicable in both the developed and developing world.
Strident environmentalists have long ignored, misunderstood or downplayed these issues in order to support their own goals. They instead have viewed all economic growth as the cause rather than the solution to environmental problems.
A study by D. Coursey in 1992, found that the willingness of citizens to spend and sacrifice for a better environment rose twice as fast as per-capita income. CCR-II: Fossil Fuels explains, “Conversely, willingness and ability to pay for a better environment falls with falling income.”
The EKC diagram shows that, as development begins, environmental degradation increases until a per-capita income tipping point is reached, after which the environment begins to improve. CCR-II: Fossil Fuels cites a study by Grossman and Krueger (1995) on air quality that has shown that it tends to deteriorate until per-capita income reaches between $6,000 and $8,000 per year (in 1985 dollars), after which it begins to improve sharply. CCR-II: Fossil Fuels concludes: “Later research confirmed similar relationships for a wide range of countries and air quality, water quality, and other measures of environmental protection.”
Prior to the recognition of the Environmental Kuznets Curves (EKCs), many well-informed people also believed that richer economies damaged and even destroyed their natural resource endowments at a faster pace than poorer ones. They believed that a quality environment could only be achieved by avoiding industrialization and the drive to increase personal income.
At first, the EKC appeared to be a contradiction of such beliefs but it is now widely accepted by economists and environmentalists who are able to free themselves from partisan politics long enough to rationally examine how the real world works.
There is not a single EKC relationship between wealth and environmental improvement for all pollutants, places and times, but the relationship in the diagram above is always closely adhered to.
Factors such as strength of democratic institutions, levels of educational achievement, and income equality also play important roles in environmental protection. However, prosperity obviously has a beneficial effect on these variables. It is essentially a positive feedback mechanism.
In the final analysis, the productivity and wealth of nations depends more on their institutions, laws, incentives and regulations than on their natural resources. Countries where private property rights are defined, protected and tradable have significantly greater per capital wealth, economic growth rates and rising standards of public health along with environmental quality.
Throughout the last century of socialist governments in countries such as Cuba, Russia, China and Venezuela, all of the above-mentioned values have suffered and the impact on environmental protection has been devastating. Yet, ironically, some of those currently seeking the US presidency maintain that they are strong environmentalists while, at the same time, preaching a form of government that has never achieved environmental quality.
In contrast, President Donald Trump is well aware that, without prosperity, we cannot afford to protect the environment. Trump’s Earth Day Statement last year summed up the situation perfectly:
“Environmental protection and economic prosperity go hand in hand. A strong market economy is essential to protecting our critical natural resources and fostering a legacy of conservation.”
Environmentalists who care more for protecting nature than aligning with their traditional allies should be supporting the President, not opposing him.
Note: Portions of this article were excerpted from Climate Change Reconsidered II: Fossil Fuels (CCRII: Fossil Fuels), produced by the Nongovernmental International Panel on Climate Change (NIPCC) published by The Heartland Institute, with permission of the editors Joseph Bast and Diane Bast. The authors strongly recommend the book for a complete exposé of the fallacies behind the climate delusion.