The False Trade-Off Between Economic Growth and Environmental Protection

The efforts to reinforce the trade-off between environmental protection and economic development are shortsighted and terribly manipulative. For example, union members eager for construction jobs are told that without a gas pipeline or coal-fired power plants there will be no jobs.
05/23/2016 08:55 am ET Updated May 24, 2017
Workers clean solar panels at a solar energy plant in Jinzhou, Liaoning province December 12, 2009. Governments seeking to co
Workers clean solar panels at a solar energy plant in Jinzhou, Liaoning province December 12, 2009. Governments seeking to combat global warming are giving incentives for low-carbon energy production and penalizing industries that emit greenhouse gas emissions from fossil fuels. The global recession has curbed energy usage and reduced emissions but also scaled back investment in alternative energy. REUTERS/Sheng Li (CHINA - Tags: ENERGY ENVIRONMENT)

In an excellent piece in the New York Times, Erica Goode summarized a recent report from the World Health Organization (W.H.O.). According to Goode:

The report, which compiled air quality readings from 3,000 cities in 103 countries, found that more than 80 percent of people in those cities were exposed to pollution exceeding the limits set by W.H.O. guidelines, above which air quality is considered to be unhealthy. And in poorer countries, 98 percent of cities with more than 100,000 inhabitants were out of compliance with the health organization's guidelines.

Her story noted that while most of the disparity was between wealthy nations and poorer ones, Europe's dependence on diesel-fueled autos has resulted in pollution levels that are far higher than those in North America. In Europe, 60% of those living in cities breathed air that did not meet international standards; in North America, that number was 20%. The World Health Organization's report indicates that public policy and economic choices can lead to higher or lower levels of pollution; that there is no trade-off between economic growth and air pollution; and that the wealthiest countries tend to have the cleanest air.

One standard response to the presence of cleaner air in the developed world is to argue that these countries have exported their largest polluters--dirty, heavy industry--into the developing world. While the export of manufacturing is undoubtedly true, most air pollution comes from generating electricity and from vehicles, so the real story is a failure to regulate power plant and auto emissions. Given what we have learned about Volkswagen's attitude toward emissions monitoring, it is easy to understand why Europe's air is not as clean as America's or Canada's.

Government may not always be an efficient mechanism of program delivery, but when it comes to setting rules and enforcing standards, they are really the only game in town. Without the rule of law and rigorously enforced air pollution regulation, there seem to be too many incentives for trading off long-term benefits for short-term gains. Nevertheless, I am sure we could develop a market mechanism to reinforce air pollution standards and that market incentives would drive compliance with clean air rules even higher. Innovative policy designs to reduce pollution should always be explored. But there is no substitute for rules that express a nation's sense of values and for those national values to include preservation of the planet.

I am not arguing that securing clean air does not require sacrifices and trade-offs. There will certainly be old dirty factories that are not cost effective unless they pollute, but those factories should either clean up or close down. The workers who are harmed by these changes should be compensated for their loss and offered alternative means of employment. The efforts to reinforce the trade-off between environmental protection and economic development are shortsighted and terribly manipulative. For example, union members eager for construction jobs are told that without a gas pipeline or coal-fired power plants there will be no jobs. That is only the case if our nation decides not to invest resources and build the high-tech businesses of the 21st century. There will be plenty of jobs if our political leaders exhibit the political courage to invest in our roads, bridges, ports, mass transit, energy efficiency and water supply. Our infrastructure is characterized by a massive amount of deferred maintenance. No one wants to pay the user fees or taxes needed to maintain modern energy, water or transportation infrastructure. But once we decide that we are willing to invest public treasure for public goods, construction jobs will return.

Our transportation infrastructure is falling apart. Last week I went from my office on Broadway and 114th Street to the National Science Foundation offices near the Ballston-MU Metro Station in the suburbs of Washington, D.C. I took the subway to Penn Station, the Amtrak to Washington, D.C., and the D.C. metrorail to Ballston. My hotel was directly connected to the metro station. I didn't travel by train because it used less energy than other means; I did it because it was the easiest way to travel. But I must tell you, the best piece of infrastructure I travelled on was the NYC subway--and that is nothing to brag about. Penn Station in New York is a dump and the Amtrak trains could certainly use modernization. Union Station in D.C. is a wonderful, beautiful and (I hope) thriving commercial hub, but the D.C. metrorail is a depressing disaster. I worked in Washington when the metro was new and I thought it was the subway of the future. Sadly, the cars seem to have the same carpet and seats today that they had back in the 1980s. There is plenty of work to do if someone wants to fix up the metro (I'd suggest putting a few more escalators in the NYC subway and building a bullet train from D.C. to New York).

The trade-off between environmental protection and economic growth has been discussed for half a century. What we have learned is that government regulations requiring pollution control are "technology forcing" and encourage the modernization of industry and infrastructure. A marginal business that can't afford pollution control technology would not last very long anyway. But the investment in environmental clean-up often stimulates other upgrades that enable businesses to more effectively compete in a global economy. Moreover, a clean environment reduces illness and that reduces the need for expensive health care. Clean air also attracts businesses, residents and tourists. Dirty air discourages visitors and investment.

The idea that wealth has nothing to do with ecology is idiotic. Humans are living beings requiring the food, air and water that can only be generated by thriving ecosystems. The wealthy cannot build a walled community to keep the foul air out of their plush estates. Perhaps they can filter their homes and reduce particulates, but some toxics will still get through, and eventually even a wealthy person must leave their cocoon and breathe along with the rest of us.

The rich may know they can't hide from air pollution, but American workers have been convinced that they won't have jobs if they don't help extract fossil fuels. Donald Trump claims he will re-open America's coal mines. People who oppose fracking and pipeline projects are considered anti-growth and anti-labor. We cannot "make America great again" by trying to return to the industrial era of the mid-twentieth century. As Bruce Springsteen wrote in "My Hometown": "They're closing down the textile mill across the railroad tracks. Foreman says these jobs are going boys and they ain't coming back." It is cynical and manipulative to claim that we can return to the mid-twentieth century; we can't. Agriculture and manufacturing are becoming more automated and modular construction is the wave of the future. Employment will need to be based on the economy of the future, not our dreams of the past.

The data demonstrates that a clean environment is an economic asset. The trade-off between jobs and environment is propaganda. I don't know when it will leave our political dialogue, but it's clear it will last through this cycle. Perhaps I should get some hats made--"Make America Smoggy Again." Something in gray with a touch of orange and brown.