Thursday, June 25, 2009

Environmentalism is a Luxury

In a time when global warming ceaselessly graces the front pages of the few remaining newspapers and is continuously hawked by the talking heads on twenty-four hour news networks, we are experiencing one of the coldest summers to date. (See Bloomberg News While the debate over the existence of global warming is largely and correctly closed, there are still many areas of debate that are still open and undecided. For instance, the extent of man's role in causing global warming, and hence his ability to mitigate it, is still open to discussion.

While such issues are being discussed at the margin, there is at least one issue that has been all together ignored. Most Americans, particularly the limousine-left of Hollywood, fail to see that environmentalism is a luxury. This missing concept is the source of much of the misunderstandings and failures to communicate with Third World countries. It also lies at the crux of disagreement between business and environmentalists.

Many environmentalists would dismiss such an argument on its face. The radical environmentalists argue that curbing global warming is a need. If we fail, the argument goes, so will our planet. Whether this is true or not and whether or not man actually has the capacity to make change is irrelevant and misses the key point. First of all, even by the most radical environmentalist standards there is little chance that those who are alive now will experience any catastrophic effects from global warming. Even in worst case scenario, it is our children or grandchildren that will be directly affected by our actions. While most people care about providing for our children, it is difficult if not impossible to claim that such forward planning is a need.

Secondly, most environmentally friendly actions cost money. Only recently have a significant number of such behaviors (such as purchasing CFLs) been proven to be the more cost effective option. This can, in part, explain the recent take-off of the pro-environment movement. Unless a behavior is the more cost effective option, individuals will need some ulterior incentive to spend their money.

This is often the case in modern America. Even when environmentally friendly actions are less cost effective, many Americans are willing to pay a premium for the products. A few extra cents for organic food or organic dry cleaning is worth it to those who can afford it. In other words, environmental consumers are gaining an indirect value from the organic or environmentally friendly product. At a minimum this value is simply ‘a good feeling’. If these products do not actually help the environment, the only value obtained is the cognitive notion that one is ‘helping the environment’. Alternatively, if these products do help the environment, then the extra money spent buys that same good feeling and helps avoid some environmental damage.

However, most people in the world cannot afford this extra premium. For them, the value of that good feeling or even the value of saving the environment is much lower than the extra cost. A rich New Yorker may be willing to pay double for his eggs if they are organic. The poor subsistence farmer who can barely scrape together a solid meal has no interest in ‘organic’ eggs. This is precisely why environmentalism is a luxury. More well-off individuals, and countries, can afford to pay more. They are able to pay for the benefits that they reap from being environmentalists. Whether these benefits are real or simply cognitive is irrelevant.

The failure to understand environmentalism through this lens drastically hampers political understanding. It explains why industrializing countries, such as China, are unwilling to change emissions standard; and subsequently why many Americans do not want to become uncompetitive by leading the way. It also explains why the Hollywood elite can justify buying hybrid Hummers and private jets (or explains Al Gore’s copious consumption of electricity in Tennessee). In order to accurately develop environmental policy, our leaders need to incorporate this understanding into their decision making process.


  1. I disagree on "environmentalism as a luxury". I certainly believe that it CAN be a luxury -- for instance, a couple weeks ago I paid an extra $15 for an eco-friendly can of paint. This decision probably didn't do much good for the environment, and was not a great use of my $$, but it made me feel good.

    But, that's not the big picture. It's not even what environmentalism is about. On a global level, the lifestyles of the poor aren't damaging the environment. It's the rich that need to change.

    Average ecological footprint in US: 12.22
    Average ecological footprint in Bangladesh: 0.6

    Little meat, no diapers, no large houses to cool/heat, no cars... It's the rich that need to lessen their impact, by slowing their consumption cycles and reducing their over-sized footprints. We cause environmental damage by producing, consuming, discarding and repeating. We made all of this cheaper, and did it on an ever-larger scale, until it became a key part of US culture -- for example, cars became a necessity because of the ways cities were designed around their ready availability. But the way we're doing things now is not the only way, and if it's causing such drastic environmental change, it's certainly not the best way. Upper-income people in the US can call for things to change by paying a premium for an alternative.

    Perhaps the best single thing that anyone can do for the environment, is also a great way to save tons of money -- stop eating meat.

  2. Pricing the negative externalities associated with carbon emissions isn't a luxury, its sound Pareto-efficient economics.

  3. I think both comments touch on some important points. In many ways the negative externalities and luxury aspects of pollution are complimentary. By pricing the negative externalities we would most certainly (assuming correct pricing and ignoring deadweight costs) achieve an optimal level of pollution. However, the ACT of deciding as a nation to bear those costs is a luxury. If we fail to to address these externalities the costs are born by the entire planet rather than the few Americans. Even if economically (and/or morally) speaking Americans are responsible for the costs of the degraded environment, unless we choose to bear the burden of the costs we won't have to deal with the externalities.
    This why I make the claim that it is a luxury. Any cost one takes on above and beyond what they need to - such as charity - can be viewed as a luxury. After all, it is our ability to pay extra and the derived benefits (whether cognitive or real) that give incentives for individuals to pay extra for environmentalism.
    The general point is not that pollution is luxury- it is most certainly a negative externality - but that caring about cleaning up pollution, and in specific paying for environmentalism is a luxury. I think this helps to explain the behaviors and difference of opinion (and the relative willingness to pay) between different parties within and without America. Understanding this aspect of the situation isn't meant to diminish environmentalism or minmize the importance of pollution reduction, but to offer a new lens in which to view the situation and through which to find new amenable solutions.


"Reading makes a full man, meditation a profound man, discourse a clear man." - Benjamin Franklin

Please leave comments!