Happy Planet...Unhappy People

July 9, 2009 in Blog

This week the New Economics Foundation published its Happy Planet Index of countries worldwide. They note that "the index combines environmental impact with human well-being to measure the environmental efficiency with which, country by country, people live long and happy lives." Like many such analyses from the environmental left, it glorifies poverty and repression.

The Index combines "Life Satisfaction," life expectancy and "Ecological Footprint."

The Index rates Costa Rica as the #1 country in its list. The US comes in at 114. Additionally, the following countries rank ahead of the US (I've also added the country's political rights as rated by Freedom House - 1 - full rights, 7 - no rights)

  • Vietnam, 5th - 7
  • Cuba, 7th - 7
  • Bhutan, 17th - 6 (32 percent below poverty line)
  • Laos, 19th - 7
  • Mexico, 23rd - 2
  • Pakistan, 24th - 6
  • Bangladesh, 31st - 5 (42 percent below poverty line)
  • Tajikistan, 34th - 6
  • Venezuela, 36th - 4
  • Syria, 38th - 7
  • Burma, 39th - 7
  • Haiti, 42nd - 4 (Poorest country in the Western Hemisphere, 80 percent below poverty line)
  • Uzbekistan, 45th - 7
  • Yemen, 50th - 5
  • Palestine, 56th - 5
  • Iran, 90th - 6 (The 2009 ranking is due out soon, and we can reasonably expect a 7)
  • Belarus, 104th - 7
  • Malawi, 107th - 4 ($800 annual average income, 53 percent below poverty line)
  • Chad, 109th - 7 ($1,600 annual average income, 80 percent below poverty line)
  • Lebanon, 110th - 5
  • Congo, 112th - 6
  • United States, 114th - 1

The results mirror other studies showing that some believe that greenness requires poverty. Sadly, such poverty is seen too often as "quaint" by wealthy Western environmentalists. As filmmaker Phelim McAleer says "quaint may be the most evil word in the English language."

These results are not surprising since they are based on the work of Herman Daly of the University of Maryland. In his 1996 book Beyond Growth he outlines his approach to the problems of growth and development, which he describes in one chapter as "Marxian-Malthusian." In describing the economic and environmental challenges in Northeast Brazil, he writes:

A Marxian-Malthusian definition of social class, in terms of control versus non-control of both production and reproduction, fits the Northeast, and offers a possibility for integrating the valid insights of both traditions. This is important because with the current rebirth of Marxist economics in Brazilian universities, Malthusian insights are in danger of being lost or discarded... The democratization of control over reproduction is no less (and no more) important than the democratization of land ownership in the Northeast.

The "New" Economics Foundation sounds like some very old economics that led not only to vast human misery but unfathomable environmental destruction.

BC's Inefficient Car Trade-In Program

July 9, 2009 in Blog

Two weeks ago we looked at the Cash for Clunkers program and the high price it paid to reduce a small amount of CO2 emissions. British Columbia has a different version that is praised by the Sightline Institute in Seattle.

They praise the program because it not only applies to cars but to bikes and buses:

The Scrap It program is focused on energy efficiency and reducing CO2. The best way to do that is to incentivize better miles per gallon along with alternatives. Most people won’t trade a clunker that is the sole mode of transit for a bike, but many people would get rid of a second car in the driveway for a bike.

The question is, does it make sense as a way to reduce CO2? The answer is that it is better than the Cash for Clunkers program, but is still a poor way to reduce CO2.

The program has a calculator that measures the reduction in CO2 and then determines if you qualify to receive an incentive payment of $1,250 or $2,250. For example, I found that had I traded in the car I bought when I graduated from college, a 1993 Saturn SC, for a Prius today, I would qualify for the $2,250 and reduce CO2 emissions by 2.25 metric tons (tonnes) a year. Assuming I would have kept my Saturn for another ten years, I would reduce my total emissions by 22.5 tonnes. Under those (extremely favorable) circumstances, the program pays $99.56 per tonne of CO2, more than five times the going rate for CO2 on the European market. If the car lasts only five years, the calculation gets much worse, costing nearly 11 times the going rate for CO2 emissions reductions.

Just to test the limits of this idea, let's say I traded in my Saturn for a bike and didn't drive a car for the next 10 years. The BC government will give me $1,200 to trade a car for a bike. Even in those wholly unrealistic circumstances, the program spends $31.58 per ton of CO2, or about 66 percent more than the going rate for CO2 on the European market.

Those who truly care about the environment need to remember that waste of money is waste of resources. By ignoring the cost of projects, we spend money poorly that could be used to promote other environmental projects.

This is a problem with so many politically-picked solutions. The judgment about whether the program is worth supporting is not based on effectiveness or bang-for-the-buck but on a political calculus about whether it sounds good and rewards constituents with taxpayer money.

Congress Follows in Jefferson's Footsteps

June 27, 2009 in Blog

There has been much made of the fact that Congress voted yesterday on a bill of greater than 1,000 pages without reading it. One historian, however, notes that the same was true of the Declaration of Independence.

Author and "historian" Dave Barry notes in Dave Barry Slept Here, which may one day become a history textbook, that Thomas Jefferson didn't expect people to actually read all that he wrote. To prove his point, Barry cites the text of the Declaration:

When in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth the separate and equal station to which the laws of nature and nature's God entitle them, a decent respect to the opinions of mankind require that they should get some sleep. Because I have been up for two nights now, declaring independence, and I may be a lanky Virginian but I am not a machine, for heaven's sake, and it just doesn't make sense to sit here scrawling away these compound-complex sentences when I just know nobody's going to read them, because nobody ever does read all the way through these legal documents. Take leases. You take the average tenants, and you could put a lease in front of them with a clause about halfway t!
hrough stating that they have to eat toasted moose doots for breakfast, and I guarantee you they'll never read it. Not that it would make any difference if they did, because tenants ignore most of the rules anyway, such as the rules about not flushing inappropriate objects down the toilet. Ask any landlord what he spends most of his time doing, and the odds are he'll answer "Pulling inappropriate objects out of tenant's toilets." I know one landlord who found a gerbil in there. Who the hell would do a thing like that? A cat, yes. I could see that. I could see giving a modest rebate for that. But not a gerbil. I gotta lie down.

As Congress heads into its 4th of July recess, we would do well to remember these words.

Weird but Green

June 26, 2009 in Blog

A recent report from a Spanish economist noting that their effort to create green jobs has backfired, killing 2.2 jobs for every one created, elicited an interesting response from Presidential Spokesman Robert Gibbs. He called the analysis into question, telling the White House press corps:

It seems weird that we're importing wind turbine parts from Spain in order to build -- to meet renewable energy demand here if that were even remotely the case.

It may be weird, but Washington State has another name for it: "green." The 2008 Washington State Green Energy Jobs report counts "Tank Car, Truck, and Ship Loaders" as green jobs, saying that we have 30 people working in that category doing "green" work. In Washington some of these ship loading jobs are related to unloading wind turbines from overseas.

One person's weird job is another's "green" job.

Cash for Clunkers the Model of Inefficiency

June 26, 2009 in Blog

Recently, Congress passed legislation, called "Cash for Clunkers," that offers funding to those with old cars so they can upgrade to new cars with better fuel efficiency. The Seattle Times editorialized against the legislation citing a number of problems with the bill.

We hadn't previously examined the legislation, but a reporter asked today what we thought about it, so we took at look.

One of the questions we typically ask (but policymakers too seldom do) is how much a particular climate policy spends to reduce one metric ton of CO2. This is the standard unit of carbon as a commodity. Currently, a tonne (metric ton) of CO2 costs €13.40 (about $19) on the European Climate Exchange. If a policy spends more than that to reduce a tonne of CO2, then they could do more for the environment by putting the funding elsewhere.

How does "Cash for Clunkers" do using this approach? Put simply, very badly.

The typical car travels 15,000 miles per year. If that car averages 18 MPG, it will use 833 gallons in a year. If someone trades that car in for a new car that averages 22 MPG, they receive $3,500 from the government and will use 682 gallons. So, the government spends $3,500 to save the emissions from 151 gallons, about 2,939 lbs of CO2, per year. That is 1.34 tonnes of CO2.

Even if that car lasts 10 years, the government is spending $261.96 per tonne, or 13.8 times the price available on the European Climate Exchange.

The numbers are slightly better if you buy a car that gets 10 MPG better than your old car. The government provides $4,500 to you in that circumstance. But they are still spending $204.12 per tonne, or 10.75 times more.

Some environmental activists may respond that the cost doesn't matter because the issue is so important that it is worth the cost. Wasting money, however, is wasting resources. By wasting money we are losing the opportunity to do much more for the environment and are wasting 90 percent of the funding. Imagine what we could do with that money.

It is ironic, to say the least, that legislation seeking to improve efficiency is extremely inefficient.

The Solution to Unemployment: Stop Creating Green Jobs!

June 23, 2009 in Blog

In a letter to Washington's congressional delegation regarding the federal cap-and-trade legislation, the Governor says this:

On the jobs side, by way of example, in our state, we naively set a goal in 2007 of 25,000 green collar jobs by 2020. Today, with our robust community and technical college system with programs specifically designed to support more green jobs, we already have more than 47,000...

Yes, it was naive.

After the Governor issued Executive Order 07-02, calling for 25,000 “green” jobs, we wrote this in August of 2007:

It could be that the total target of 25,000 clean energy jobs by 2020 is extremely low and will be met with ease as utilities diversify their portfolios. If that is the case, then the target itself is relatively meaningless because meeting the target didn’t require government intervention. As such, the only value of such a target is political.

The target was, and is, political, not real. If, however, the Governor actually believes that these "green" jobs are real or positive, the naivete continues.

As we noted last week, according to the Pew Center, the top state in the country for "green" jobs is Oregon which also has the second highest unemployment rate. Not the most attractive poster child for "green" jobs.

During the time Washington met and surpassed that "naive" target, our unemployment rate has nearly doubled. When the Governor signed the Executive Order in February of 2007, the unemployment rate was 4.8 percent, identical to the US rate. After the creation of 39,000 "green" jobs (there were 8,000 in 2007), the unemployment rate has reached 9.2 percent, 0.1 percent higher than the national average.

Imagine where we'll be if we create too many more "green" jobs. At the very least, claiming that the creation of "green" jobs will help Washington "grow a clean energy economy," has not stood the test of actual experience.

Hyperbolic Environmental Claim of the Day: Ban PVCs to Fight Terrorism

June 17, 2009 in Blog

The Healthy Building Network makes this claim today:

It Bears Repeating: PVC Elimination May Be the Most Significant Contribution You Can Make to Homeland Security

What is the link? PVC manufacturers use about 40 percent of the chlorine in the US and terrorists could, so the claim goes, get that chlorine and launch an attack. They cite a GAO study for this claim. The GAO says that replacing chlorine with other compounds "potentially could lessen the consequences" of a terrorist attack. Nothing like three caveats ("potentially could lessen") to really take the steam out of a claim.

It is also worth pointing out the total number of terrorist attacks worldwide using chlorine is almost zero. One counter terrorism blog notes:

The use of chlorine in terrorist attacks, however, is relatively rare. In 1997, a serial bomber detonated several chemical bombs containing chlorine across Sidney’s eastern suburbs that injured some three dozen people. In Japan, on the third anniversary of the Sarin gas attacks on the Tokyo subway system, a chlorine-like gas was found in three beer cans in the Kasumigaseki subway stations. Other than that, reports of the use of chlorine in terrorist attack are sparse.

So, the "most significant contribution" to homeland security is to ban a chemical whose use is "sparse" and follow a policy that "potentially could lessen" the impact of an attack. If this is the best argument they've got, they need to go back to the drawing board.

Green Building: Now With 50% More Global Warming!

June 12, 2009 in Blog

The essence of an eco-fad is something that sounds good, makes people feel like they are making a difference or provides political benefit for politicians, but either does little to help the environment or actually damages it.

Here's another perfect example.

Some new Seattle condominiums are selling their "greenness" by emphasizing the number of trees they save. One web site notes:

  • By using steel and concrete construction, [we] saved approx. 1,609 trees.
  • Cork remains the only tree whose bark can regenerate itself after harvest, leaving the tree unharmed.

This is one of the more humorous claims I've ever seen. Study after study demonstrates that using timber is far more environmentally sustainable than using energy-intensive resources like steel or concrete. A study from the Consortium for Research in Renewable Industrial Materials shows just how much more environmentally friendly timber is.

In their study of the Life Cycle Environmental Performance of Renewable Building Materials in the Context of Residential Construction, they note that a typical house using wood emits about two-thirds the CO2 during its lifecycle when compared to steel. When compared to wood, concrete emits 35 percent more CO2. Similar margins exist in air emissions and water emissions. Steel has five times the water emissions as wood.

What's more, wood is renewable. Concrete and steel don't re-grow. Trees do. While cork trees can continue to live after their bark is stripped (I'd be interested to see a building constructed with cork bark), trees are re-grown. Washington's forest ecosystems actually rely on a certain percentage of clearings and a number of animals, like deer or snowshoe hare, rely on young forests for forage.

It might be understandable that condominium marketing finds ways to spin environmental benefit, even if they end up highlighting "benefits" that are actually detrimental. Environmental activists, however, fall into the same trap.

Two years back I noted that environmental groups should support local timber harvests if they were serious about their commitment to the local timber that is emphasized by "green" building codes. A member of Green Everett responded that he would continue opposing timber harvests because  "Replanted young trees will take centuries to soak up the amount of carbon from the atmosphere that was stored in the original forest." Wrong. As scientists in British Columbia have shown, it takes about 10-15 years for a forest to re-absorb the amount of carbon lost in a harvest, not centuries. Harvesting trees at 45 years or older means that these forests absorb more carbon over their life, especially when compared to steel or concrete. Rather than looking at the science, he invented a statistic to support his reflexively anti-forestry position.

Forests have been at the center of environmental conflicts for so long in Washington that many are drawn into eco-fads that claim to protect trees. Unless we follow the science, however, eco-fads can often end up costing consumers more and harming the environment.

Rarely Heard Phrases: "Let's Follow Oregon's Jobs Policy"

June 12, 2009 in Blog

One of the most common themes from the environmental left these days is that "green" investments will lead us out of the current recession. Already, however, we are seeing that there is no relationship between these jobs and prosperity.

For instance, in January, the Governor claimed that Washington had created 47,000 "green" jobs, far surpassing the goal of 25,000 by 2020. Additionally, she claimed, the state would promote efforts to create another 2,900 such jobs during the next two years.

Have all of these jobs helped Washington's employment? Through April, Washington's unemployment rate of 9 percent was higher than the national average.

Perhaps, however, Washington hasn't done enough to create "green" jobs. What states are doing more?

Well, a recent study points to Oregon. Seattle environmental group Sightline notes on its blog that:

"Folks in Oregon have been trumpeting the good news all day today -- and rightly so; according to the Pew Charitable Trusts Oregon has the largest percentage of its jobs involved in the clean energy economy."

So, what does all of this "good news" mean for Oregon? They have the second highest unemployment rate in the nation at 12 percent. Only Michigan, which has unique problems, is worse. California, whose unemployment rate is 10.9 percent, is also among the green jobs leaders.

Frankly, there is a certain bit of silliness in this study. Idaho is also among the leaders. I don't remember environmental groups pointing to Idaho's policies as exemplary. What the study most likely means is that the definition of "green" jobs is amorphous and meaningless leading to statistics which are unenlightening.

All of this points out that creating "green" jobs doesn't guarantee anything. Indeed, labor leaders from Washington and Oregon comment today in the Seattle Times that there is more to a good job than being "green."

Green jobs are another eco-fad that politicians have latched onto in order to claim political credit even when the impact of the policy is nonexistent or even negative.

First, Kill All the Humans...

May 26, 2009 in Blog

That's David Horsey's prescription for environmental policy. It is a policy that UK Prime Minister Gordon Brown's environmental minister has already endorsed in part. It is a policy the Flight of the Conchords have outlined.


Green Jobs: More Work, Less Pay

May 26, 2009 in Blog

As part of the effort to enact a range of new restrictions on carbon emissions, many point to the creation of "green jobs," arguing that new government spending and regulation can bring us out of the current recession. The latest version of this is highlighted in the Seattle Times which cites a study saying they can be part of a "green recovery." The study, however, uses a statistical trick to make bad jobs sound good.

The study argues that "government investment produced more 'job hours' than tax cuts or traditional infrastructure spending." There is a reason that the study focuses on "job hours" rather than growth or productivity: green jobs require more labor to do less.

For example, it is sometimes argued that renewable energy is better because it creates more jobs than other energy sources. For instance, a California campaign to promote solar notes "Solar Photovoltaics create more jobs per Megawatt of capacity than any other energy technology."

This is a foolish argument. We could create more jobs in agriculture by banning tractors and requiring human labor to plant and harvest. This would create more "job hours" in agriculture. Would anyone support this? Of course not. It would make us all poorer. The jobs would be horrible and pay poorly and it would certainly raise the cost of food. Promoting a particular policy because it is more labor intensive is a sure path to economic ruin.

The Times article also questions "stimulus" spending on highways, saying "as if peak oil and global warming don't matter." The peak oil theories, which argue that oil is beginning to run out leading to severe economic impacts, have been around for some time and traditionally heat up when oil prices rise, as they did last summer. Freakonomics co-author Stephen Dubner addressed peak oil hysteria recently on his blog, noting "It is always interesting to watch what happens when the media latches onto a given issue and then, as the reality on the ground evolves — sometimes radically — the media fails to catch up to, or even monitor, the changes. This means the public is stuck with an outdated version of conventional wisdom which, even if it were true in the first place, is no longer so."

The politics of climate change are going the route of many other such issues, with proponents of the policy making dramatic, but inaccurate, claims. When the facts catch up, proponents simply move on to the next outrageous claim, always trying to stay one step ahead of the facts. Claims of green jobs and a green recovery are the latest iteration of that process.

In Case Democracy Doesn't Work

May 21, 2009 in Blog

The Environmental Protection Agency is in Seattle today to hear testimony on their effort to regulate carbon emissions to mitigate the impact of climate change. One theme is emerging in government efforts on this issue -- don't leave legislation to legislators.

This was put bluntly by a professor from Yale in today's Seattle Times.

"In effect, the prospect of EPA regulation is a bulwark against Congress falling down on the job," said Dan Esty, a Yale University environmental professor.

The philosophy expressed here is that constitutional checks and balances from elected representatives are useful only to the extent Congress does what is "right." Otherwise, the executive needs to step in and do whatever is necessary, other branches of government, and public opinion, notwithstanding.

That general philosophy was put into action today in Washington when the Governor, who previously argued that the legislature must endorse her climate change legislation, suddenly realized that legislative approval was not needed. The Democratic majority in the legislature rejected the Governor's bill. As a result, she today announced an executive order that mirrored many of the elements of the bill lawmakers turned down.

Here is the intent language of HB 1819, which failed to clear the House.

NEW SECTION. Sec. 1. The legislature finds that Washington should maintain its leadership on climate change policy by implementing a cap on carbon emissions and developing strategies to achieve those reductions, including continuing Washington's participation in the design of a regional cap-and-trade program with the western climate initiative.

Here is the language included in the Governor's executive order today. The Governor ordered:

The Director of the Department of Ecology to:  (a) Continue to participate in the Western Climate Initiative to develop a regional greenhouse gas emission reduction program and to work with the federal Administration, Washington’s congressional delegation and appropriate committees to help design a national greenhouse gas emission reduction program that reflects Washington State priorities.

The Governor herself testified before the legislature in an effort to get support for the above language. The bill, despite that effort, died. In an opinion piece in April, the Governor wrote "Now we need a strong climate action bill from this year's Legislature to grasp the opportunities that await us." The question is, what made the Governor suddenly realize that that legislative support she had sought for a strong climate action bill was no longer necessary?

What It Means to be Green?

May 15, 2009 in Blog

A number of stories and comments crossed my screen yesterday addressing what it means to be "green," and it is unclear to me why anyone would see these as positive.

First, a local environmental group posted this quote on Twitter from environmental activist Stephen Viederman:

"Climate change isn't an environmental issue. It's an issue of equity and justice."

I thought this was a strange quotation to highlight. It indicates that environmental issues are only useful as tools to achieve other leftist goals, like government intervention to impose a particular view of "equity and justice." It also demonstrates a point we made yesterday that leftists, like the NDP in British Columbia, will toss environmental concerns overboard to achieve other goals. Why else would they make protecting the environment contingent on supporting other leftist values?

Second, the people of India can celebrate their position as "greenest" citizens. What got them there also says a lot about what environmental activists, in this case the National Geographic Society, think "greenness" is.

The news story highlighting their achievement begins this way:

That cold water bath many Indians have because there's no electricity...that 'matka' they use because they can't afford a fridge...and the long walk they take to work and back because private transport is expensive and public transport shoddy. There's an upside to the hard life. Indians may be green with envy at the consumption-driven lifestyle in the West, but their own frugal ways and modest means have catapulted them to the top spot in the world's Green index, making them the most environmental-friendly denizens of Planet Earth.

Environmentalists too frequently glorify poverty as a "green" way of life and this is just the latest, and most honest, evidence of that. Many greens, however, still choose to live here rather than such a "green" paradise. Remember this link between poverty and "greenness" the next time you hear promises of "green" jobs.

We've noted many times before that rich countries have better environmental records than poor ones. I'd be willing to bet that Seattle's air quality (or New York's) is better than Delhi's. Poverty means suffering and environmental degradation.

At an environmental breakfast yesterday morning, one of the more extreme local environmentalists told the audience that "Environmentalists can be difficult but they make great ancestors." The comment, from an activist who inherited her wealth, made me laugh. The reality is that environmentalists like her exist because their ancestors were successful entrepreneurs. Across the world, wealth creates the ability to become an environmentalist.

Finally, someone pointed me to this article in Psychology Today. It addresses how our minds misapprehend risks from a variety of sources. One of the ways we get it wrong is when comparing risks of "natural" products to man-made products. The article notes:

The word radiation stirs thoughts of nuclear power, X-rays, and danger, so we shudder at the thought of erecting nuclear power plants in our neighborhoods. But every day we're bathed in radiation that has killed many more people than nuclear reactors: sunlight. It's hard for us to grasp the danger because sunlight feels so familiar and natural.  Our built-in bias for the natural led a California town to choose a toxic poison made from chrysanthemums over a milder artificial chemical to fight mosquitoes: People felt more comfortable with a plant-based product. We see what's "natural" as safe—and regard the new and "unnatural" as frightening.

This is why groups like the Washington Toxics Coalition and others stir up fear of the latest "toxic" threat no matter how small. Natural is good. If people made it, it is bad. They prefer their faulty seat-of-the-pants assessment to actual scientific assessment.

Is this what it means to be green? Does promoting the environment mean promoting poverty? Are environmental issues simply tools to justify government expansion? Does being green mean ignoring science and an honest assessment of costs and benefits in favor of an unsophisticated commitment to an idealized version of the "natural."

If so, it is not surprising that support for their views is in decline.

BC Vote Shows Opportunity for Conservatives on Environment

May 13, 2009 in Blog

Last night BC Premier Gordon Campbell won a rare third term in power, campaigning on his leadership on the economy. But he also benefited by taking action on climate change in a smart way, taking the issue away from the leftist New Democratic Party (NDP).

As Premier, Campbell implemented a carbon tax, with rebates to taxpayers, as the best method to address CO2 emissions. It was an alternative to the bureaucratic cap-and-trade and the myriad of regulations being offered elsewhere, like Washington State. The NDP, seeing a political opportunity, attacked the tax, hoping to raise populist ire. That strategy, however, backfired.

In a preview of the race yesterday, the Toronto Globe and Mail noted:

The first week of the election campaign was a complete disaster for the NDP, dominated by news stories about environmental heavyweights like David Suzuki denouncing the NDP for selling its soul in a populist bid to exploit some short-term voter anger. The message from many of the province's most influential environmental groups couldn't have been clearer: If you care about the earth, vote Liberal.

Last night's election losses are the culmination of the NDP's game-playing on the environment.

We have advocated a stable carbon price with offsetting cuts in property, investment and other taxes, as the best way to address carbon emissions. The package must not raise overall taxes and our preference would be a tax cut. The individual decisions of businesses and families will more effectively reduce carbon emissions, and do it in a way that preserves freedom and promotes prosperity.

Even though the BC model is slightly different than our approach, there are two key takeaway lessons.

First, too often the left treats environmental policies simply as tools to win election. The environmental community jumps on eco-fads with an eye first to political gain and second to environmental benefit. This is why greens continue to support failed environmental policies like the Kyoto Protocol and "green" building mandates in Washington. When the NDP saw what they thought was a more politically expedient route, they threw environmental policy overboard.

Second, the election shows that when conservatives take a serious and responsible approach to the environment, they can take the issue away from the left and win. We shouldn't enact a carbon price just for the politics, but it is another example that good policy is also good politics.

Allowing the left to dominate these issues leaves the debate as a choice between supporting or ignoring the environment. Engaging gives voters a choice between responsible environmental policies that promote prosperity, or the ineffective environmental policies of the past that rely on government forcing lifestyle changes and hurting prosperity.

BC voters made that choice last night and the conservatives are enjoying a third term.

How Can a Drum Circle Be Wrong?

May 11, 2009 in Blog

For those on Twitter, you can follow the Environmental Center @WAPolicyGreen.

We missed the "Fair Trade" drum circle on Saturday, but that wasn't the silliest thing regarding "Fair Trade" last weekend.

The EcoConsumer column in the Seattle Times advocating fair trade, and attacking free trade, was more silly than usual...which is saying something.

The author Tom Watson, whose paycheck comes courtesy of King County taxpayers, attempts to justify "fair" trade over free trade with the following logic:

Free trade usually means reducing trade restrictions among nations. This can result in companies continually moving production to countries with cheap labor and lax environmental regulations. It may also hurt workers in developing nations when products from other countries flood the marketplace.

This paragraph shows how incoherent his view of trade is. In just two back-to-back sentences he argues that free trade is:

  • Bad because companies move to developing countries giving them an advantage so they can ship products to developed countries at the expense of jobs there.
  • Bad because free trade opens developing countries, giving developed countries an advantage so they can ship products to those developing countries at the expense of jobs there.

Ironically, he doesn't see the contradiction from one sentence to the next!

Such incoherent arguments are rebutted by economists as diverse as Paul Krugman, whose Nobel Prize honors his work in trade economics (I recommend his book Pop Internationalism), and Milton Friedman. They recognized that free trade makes both trading partners better off.

"Fair" trade, on the other hand, works (to the extent that it does) only because it is so little used and because only those with available, discretionary income are participating. TransFair USA, the primary organization certifying "fair" trade practices, indicates that there were 87.7 million pounds of fair trade coffee imported by the US in 2008. This is less than 3 percent of the total coffee imported each year. If such trade rules were imposed for everyone, however, it would raise the cost of all coffee, reducing the amount enjoyed by Americans and putting growers in developing countries out of business. Fewer jobs, less prosperity.

There is another reason that advocates for the poor support free trade. Muhammad Yunus, who won the 2007 Nobel Peace Prize for his work in micro-lending, writes in his excellent book Banker to the Poor:

I would like to see all barriers and protections around the world markets disappear. Protectionism is built up in each nation in the name of the poor, but its real beneficiaries are the rich and clever people who know how to manipulate the system. By contrast the poor have a better chance in a bigger open market than in a smaller protected market. Everyone would benefit from the free flow of commodities, finances and people.

Free trade, not protectionism in the false guise of "fair" trade, is the way out of poverty. It is also the way toward a cleaner environment since wealthy countries consistently have cleaner air and water than poor countries.

Finally, if Mr. Watson's view of trade is correct, what must he think of the free trade that goes on between Washington and Idaho where labor costs and environmental regulations are different? Soon, all jobs will be moving to Idaho. But that's OK, because then Washington goods will flood Idaho, making them more poor. Right?