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 A Losing Bet

David Lapp

Rick Hind, a highly vocal critic of pollution trading allowances, is the director of Greenpeace's Toxics Campaign. Hind is a long-time environmental and social activist. Before working at Greenpeace he was the environmental program director for the U.S. Public Interest Research Group. Prior to that he was a regional canvass supervisor for Clean Water Action.

EA: Proponents say you get more bang for the buck--more reduction per dollar invested--with emissions trading.

Hind: It's premature to say it works at all. And since pollution trading doesn't apply to all the pollutants, it sets a false measure of success. We're measuring success as if we were grading a slow class of pupils. Ethically, it's as if there were credits for drunk driving and someone could buy a non-drinkers' credits so he could get out of the situation where a kid is run over. Credits for drunk driving are obviously immoral. But in the case of pollution the moral issue hasn't entered the debate.

EA: In the case of the acid-rain trading program, proponents say that giving industry the flexibility of trading allowed a reduction goal of 50 percent that would have otherwise been unachievable.

Hind: You can dearly see that the position is not derived out of what is right or wrong--or what's environmentally correct or not. The policy itself was derived out of what was politically achievable under the Bush administration, and for that reason it's also outdated. This policy was invented as a political jujitsu through market forces to embrace a philosophy the administration would accept in an effort to get an environmental bill in name only. The very nature of the credits institutionalizes the laggard at the low end who simply pays to pollute through buying the credits, and it lowers the standard at the top end by legalizing the pollution level that is emitted.

EA: Would you support a trading scheme if the cap on emissions were extremely low for a given pollutant?

Hind: To answer that you have go back to the morality question and ask the community that is not going to get the reduction. I think most communities would say no, that ifs undemocratic. It passes on the decisionmaking to a bunch of Wall Street or Chicago market sales people instead of the people in the communities who say "we don't want this plant polluting our air anymore." Ethically, what you're doing is allowing these companies to dump pollutants in communities that are somewhat powerless to defend themselves.

Communities or other groups and constituencies may have an issue with a particular plant or industry, but pollution trading gives away the store on all those issues before an effective demand for pollution control is made and maximized.

We shouldn't be looking for ways to allow people to continue to pollute. If industry is willing to make those. reductions, then that reduction should be happening anyway, and we should be focusing enforcement on those who won't reduce--without paying them off. It sets a very bad precedent to pay people to pollute less; ifs like paying a drug dealer to sell fewer drugs.

It's also unscientific to say that we know that a certain level of pollution is allowable, or we know that this additional toxic water or air pollution is safe. We don't know because we've only done testing on 10 percent of the toxics in commerce.

EA: Do you think proponents of trading hold the philosophy that the end justifies the means?

Hind: Industry will go and do their market credits, but it's not the place of the environmental movement to engage in that internal logic of compromise. Where environmentalists have succeeded historically is where they have set high standards and have been persistent and not given up. Whenever environmentalists allow industry to determine what's achievable politically or scientifically, then industry is lobbying us--making us change--and we are not changing industry or the world.

As the old adage goes, necessity is the mother of invention. We have to create the necessity and the demand for industry to innovate, and I'm confident that it will. In the past few years, we've seen innovation in developing alternative refrigerants for refrigerators, totally chlorine-free paper, and dry-cleaning without perchloroethylene.

EA: Doesn't pollution trading, with sufficiently tough caps, help industry internalize the costs of pollution and provide a financial incentive for some companies to reduce pollution all the way to zero?

Hind: These are just artificial, tip-of-the-iceberg costs. Industry escapes scot-free from the real costs of pollution--like illness and environmental destruction. If they were really required to internalize the real costs of pollution, you would see pollution eliminated faster than credit markets can be set up.

I'm confident that we can never put all of those costs on an accountant's balance sheet. How do you put a price on the loss of the bald eagle or the ozone layer? I'm also confident that we may revamp the way production is done in the world through prohibitions on pollution.

EA: Many environmentalists cite the example of banning lead in gasoline through a market-trading mechanism as a major environmental success story.

Hind: Everyone is happy to get lead out of gasoline. However, some companies had been selling lead-free gasoline for many years before the ban, in the early seventies and late sixties. It therefore would have been possible to see lead banned sooner.

On the other hand, gasoline is not exactly an environmental product without lead. It's got toluene, xylene and benzene. We wage wars and destroy the environment for it, and the greenhouse effect is exacerbated by it.

The market isn't necessarily logical. Sometimes the stock market goes up when unemployment figures go down, and sometimes it goes down. The stock market is extremely emotional and irrational. When Abbey Hoffman threw dollars bills onto the trading floor in the 1960s, the market was paralyzed as traders stopped to pick up dollar bills, while they were trading billions. The market is chaotic, so I wouldn't want to bet the future of the planet on trading credits.


Source: Environmental Action Magazine, Wntr 1994 v25 n4 p19-20.

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