Forging a market-based environmental policy.

"The central fact is that...the Earth's climate seems to be cooling down." --Newsweek, April 28, 1975

"The atmosphere may be reaching the limit of its capacity to absorb emitted carbon dioxide without falling into a disastrous greenhouse effect." --Newsweek, June 1, 1992

Well,

In less than 20 years, the media and scientific communities have traded their theory of an impending Ice Age for a doctrine of global warming. This notorious flip-flop in the Earth's temperature trends underscores the degree of uncertainty and downright quackery involved in understanding what is happening to our environment.

The issue is not whether the U.S. is shelling out enough for environmental protection. Total spending to control pollution now tops $125 billion annually--about $1,200 for every American household. The most recent Clean Air Act, for example, will double the $30 billion spent for clean air in 1990. If this trend continues, spending to combat pollution will rise from 1 percent of America's gross national product in 1972 to more than 2.5 percent by the end of this decade. That's a higher percentage than any industrialized country in the West.

Most of this spending has resulted from mandates and regulations handed down by Congress and the Environmental Protection Agency. Whether it involves water or air quality, or toxic or other solid wastes, the EPA typically imposes national "solutions" even when regional and local circumstances require more flexible approaches.

The EPA, of course, is nursed along in its shortsightedness by Congress, now up to its neck in new regulation legislation. But not even the EPA can stomach Congress' latest effort to update the Resources Conservation and Recovery Act. This "modest" effort could run up an annual tab of $30 billion. And for what? Answer: To reduce the amount of aluminum foil and plastic wrap dumped in U.S. landfills and to solve other problems the EPA admits "rank relatively low" in the grand scheme of things.

The aluminum industry already has proved that market-driven recycling programs are the most effective: It now requires 95 percent less energy to produce recycled aluminum than to make the same product from ore, according to the Washington-based Aluminum Association. That helps explain why the aluminum industry's national program reclaimed nearly 57 billion aluminum beverage can last year.

Having said all of that, let me set the record straight on conservatives and conservation: We conservatives like to breathe clean air and enjoy the Earth's natural resources as much as anyone else. But the best way to protect resources is not to cripple businesses with regulations, but to make it profitable for people to act responsibly. All the talk about "sustainable development" is just alfalfa if it fails to balance environmental concerns with economic growth.

Unfortunately, this truth was ignored by politicians and environmental activists at the Earth Summit in Rio de Janeiro in June. Instead, officials at the United Nations Conference on Environment and Development did their darndest to ignore property rights and impose a new array of global taxes and regulations on business--all in the name of environmental protection.

But protection schemes based on shoddy science and government mandates are unlikely to succeed. The question is: What does science identify as real threats to our environment, and what is the best way to eliminate them?

Take global warming, for instance. Despite all the hot air emanating from the "greens," many scientists question whether the Earth is experiencing any significant warming, and many doubt that carbon gases produced by man are its cause. In February, more than 40 U.S. atmospheric scientists issued a statement declaring that proposed taxes on energy fuels aimed at lowering carbon gases were driven by "highly uncertain scientific theories."

It's one thing to conjure up a scientific theory based on shaky evidence and discuss it within the confines of a sterile research center. It's quite another to base on such theories government policy--with all of its costs to the public and private sectors. Stabilizing carbon dioxide emissions, as many activists are demanding, would require a $200 tax on every ton of carbon in fuel sources such as oil, coal, and natural gas. That would add about $26 to the cost of a barrel of oil, $120 to a ton of coal, and $3.20 to each million cubic feet of gas. Studies show that if these taxes had been imposed in 1991, they would have cost the U.S. about $95 billion in gross national product.

In this wacky election year, with special interest groups playing a highly visible role, pressure for tougher--and excessive--environmental regulations has been mounting. But rather than adopt a "regulate first, ask questions later" approach, Washington must ground U.S. environmental policy in several market-based principles:

* Government-controlled economies are the worst polluters. The pollution still devastating much of Eastern Europe and the former Soviet Union was not caused by the industrialized machines of a capitalist economy, but by state-controlled industries lacking accountability. Some 920,000 barrels of oil are spilled daily in Russia, four times the volume of the Exxon Valdez spill. In parts of Poland, vegetable growing has been banned because of contaminated soil.

* Private property ownership helps preserve the environment. Most environmental problems stem from a single cause--the misuse of resources owned in common. If Spotted Owls die, if rivers are polluted, if resources are misused, faceless bureaucrats do not suffer the economic consequences. Effectively, when property is owned in common, no one owns it--and no one has a long-term incentive to preserve it.

However, when individuals and private entrepreneurs own resources--land, water, forests--they have an economic incentive to conserve. Take a look at overfishing. In Scotland, virtually every inch of every major river (and most minor ones) is privately owned. On various stretches of the rivers, owners can charge for the right to fish. Surprise: The rivers are neither overfished nor polluted, because as the fish go, so, too, do the owners' profits.

* Economic development is the key to environmental protection. It comes as no news to anyone that poverty and underdevelopment are major culprits in the global crimes against the environment. In the poorest countries, people cut down trees for fuel and cooking. This produces large amounts of carbon dioxide while leveling forests.

On the flip side, industrialized, capitalistic economies make the best use of resources. Air pollution, for example, which gets worse as national income rises to about $5,000 per year, actually drops by at least one-third as incomes approach $15,000. Even the most rabid tree-hugger knows why: Only in wealthier countries do people have the luxury of worrying about the environment; only developed countries have the political will and the money to fight pollution. Only recently, under President Carlos Salinas de Gortari, a bold free-market reformer, has Mexico begun to tackle its environmental woes.

Far too many environmental problems are rooted in the misuse of natural resources controlled by governing elites. Political tyranny, heavy-handed government regulations, and self-induced poverty continue to wreak the worst havoc on the environment. Free, vibrant, industrialized economies, far from being Earth's adversaries, are the champions of a clean and safe world.