The Accomplishments and Limits of Environmental Policy
My professional career began in the mid-1970s, working on a survey of public and elite perceptions of water quality in Western New York as part of their regional water planning process under the Federal Water Pollution Control Act. I then helped staff an EPA working group on public participation in America’s water pollution control program. Later, I worked in EPA’s Superfund policy office and consulted for the Leaking Underground Storage Tank program. Nearly half a century later, these programs did a great deal to reduce but certainly not eliminate environmental damage. Public policy never solves problems but makes them less bad, and in that sense, all of these programs must be seen as successful. Back then, I was convinced that government held the key to a cleaner environment. Today, I believe that government plays an important role but that the key to a cleaner environment is a renewable resource-based circular economy. That circular economy will require a public-private partnership, but most of the action will be in the private sector.
Environmental policy mechanisms include a variety of “tools” to influence the behavior of private parties and government entities that pollute: Tax incentives, government grants, regulations setting pollution limits, enforcement actions when rules are violated, public disclosure, analyses of environmental impacts that must be disclosed, publicity when a company pollutes, public education, and exhortation. Historically, the counterforce to environmental protection has been the sense by businesses that environmental protection was an add-on that increased costs with no corresponding increase in revenues. That mindset developed at the start of environmental regulation when we retrofitted existing but polluting technologies to reduce their environmental impact. We put catalytic converters on cars and stack scrubbers on power plants to reduce their emissions. All those add-ons added cost.
There is another approach to environmental protection that can actually make money rather than cost money. This approach involves the total redesign of the technology to improve a good while reducing its environmental impact. The electric car doesn’t need a catalytic converter. The electric vehicle is a major redesign of the motor vehicle. A solar array doesn’t require a stack scrubber. Solar energy completely redesigns the generation of electricity. A landfill doesn’t get to leach toxics into nearby groundwater or methane into the atmosphere if the waste stream has been mined, treated, and reused, and the garbage never gets dumped in a landfill. We will have reconceptualized garbage and transformed it into a source of natural resources. This is not to say these new technologies do not pollute, but once they are in use, we can put human ingenuity to use reducing these new forms of pollution.
The technological and economic transition I am describing takes time, but it is underway right now. Government is encouraging and accelerating these changes, but the main engine of change is in the private sector, spearheaded by young and mission-driven managers and staff who are committed to making money while minimizing damage to the planet. These cultural changes in modern organizations are quite real and are having an impact. There remains plenty of greenwashing and sustainability failures, and the media is always going to highlight them. In the past few weeks, we’ve learned that although electric vehicle sales are increasing, the growth is not as fast as projected. Off-shore windmill projects are being abandoned because their cost projections were wrong. All true, but so what? Lots of businesses and projects fail. But in the case of environmental sustainability, the broad trends are positive, and the driver of that change is the widespread awareness of the environmental and climate crisis that we are in the midst of.
Cultural change is not rapid and never total. We still see gender and racial inequality in the workplace, but it is far less pronounced than it was fifty years ago. Many fossil fuel companies and petrochemical companies continue to operate as if the planet’s natural systems do not matter. But most of the GDP is in the service sector. These are businesses that create, design, and sell ideas, software, entertainment, knowledge, and services. The extractive and polluting industries are outnumbered by the service sector and nonservice businesses that would prefer that their supply chains not poison the planet. With the coming rules on environmental disclosure being finalized, these mild preferences will be reinforced and help build the market for less polluting resources and products. Moreover, if political clout follows economic power, which companies are more important: ExxonMobil and Saudi Aramco or Google and Microsoft? The companies that consume power are much bigger than those that generate it, and as energy users find lower-cost renewable sources of energy, fossil fuel companies will find that their main market will be in petrochemicals, and their size and wealth will diminish.
Government policies like carbon disclosure rules have a significant impact on corporations because they influence their ability to raise capital from public markets. This is a subtle but quite meaningful form of public policy. Some environmental activists, especially climate activists, believe that the existential threat of climate change should lead to dramatic government rules that reduce greenhouse gas pollution immediately. In their view, fossil fuels should just be banned. All we need are principled and committed leaders, and the climate crisis could end. However, dramatic and massive policy shifts are rare and, in the case of greenhouse gasses, are politically infeasible because of their massive negative economic impact. While I get some emotional satisfaction out of these demands, I sometimes wonder why anyone bothers to try to place demands on the political agenda that would result in more costs than benefits. And I find it ironic that the very protests being organized would not have happened without the use of fossil fuels. Protestors rely on social media (powered by fossil fuels) to call for people to assemble, who then arrive in vehicles powered by fossil fuels.
Which brings me to the Climate trade show called COP28 that starts in Dubai on November 30th. The influence of federal, state, and local environmental policy is profound but has its limits here in the United States. The influence of global environmental policy, such as the pronouncements issued by the United Nations Climate Change Conference or Conference of the Parties (COP), is far less than those policies promulgated within sovereign nations. These meetings generate media and raise consciousness but have no significant policy impact. They raise expectations among environmentalists and particularly scientists who do not know much about political science or practical politics, but inevitably are sources of disappointment. Either the pronouncements are too weak or vague, or if they are specific, they tend to be ignored by sovereign nations who have little motivation to adhere to them. If 27 of these meetings haven’t stopped global warming, why does anyone think the 28th will finally do it?
I am arguing for a realpolitik of the environment where we focus on what is practical and can be achieved rather than on what ideology or dreaming drives us toward. There are some practical, empirical factors that lead us to need to move off the current linear economy to a circular one. We now have more than eight billion people on the planet. The political pressure for economic development—fueled by images of wealth on social media—is growing. Consumption levels are growing worldwide. Finite resources are being depleted. Climate change has arrived. Forests are burning, and warming oceans are fueling extreme weather events. Water and food supplies are threatened. An economy based on recycling, mining waste, photosynthesis, renewable energy, and resource efficiency can generate the wealth we need while preserving the planet. The current linear economy will result in scarcity, higher prices, and more pollution. It cannot bring the economic growth needed to maintain wealth in the developed world or ensure growth in the developing world.
Public policy must be focused on accelerating the transition to a renewable resource-based circular economy with rules, incentives, and construction of infrastructure. The real work of building this new economy will take place in the private sector, managed by young people who correctly believe that we do not need to choose between the planet and profit. For environmental policy to be effective, it must focus on encouraging the transition already underway in many private businesses. It needs to focus on continuous improvement rather than the achievement of symbolic goals. And its focus must be broader than climate change alone.