Category: Innovation

Today’s Earth Day Campaigns Suck, We Need New Ones

Another Earth Day is upon us, with its moralizing and calls to superficial acts that signal collective concern for the natural environment. I’d like to examine how this sort of activism falls short, and see if libertarian philosophy has anything to add to deepening the conversation about living sustainably.

Looking at the official Earth Day Canada website, we are entreated to “consume less” and “play more”. The “play more” side of the campaign encourages kids to play outside, and they have a fundraising drive to raise money for enriched play playgrounds for kids. While this is certainly a worthy goal in terms of promoting the health and psychological development of children, I fail to see any direct connection with environmental sustainability.

The “consume less” side of the campaign tells us “reducing consumption is a moral imperative and will make you happy! Buying things and acquiring wealth does not make us happy.” Blanket statements like this fly in the face of psychological research and our own first-hand experience. Consuming less has been a focus of the environment movement for over two decades. If we look just at plastics, which this campaign targets, we see that global production was 335 billion tonnes, and it is increasing by 3.8% per year. With global population growth, and more of the poor moving into the middle class and into cities, consumption of plastics will continue to grow, as will consumption of meat, oil, gas, timber, concrete, and pretty much anything else people find useful. If consuming less is a moral imperative, it probably rests at lower priority than other imperatives, such as providing goods for one’s family at a reasonable cost. It also plays second fiddle to other psychological imperatives, such as seeking esteem from one’s society through displays of consumption.

As far as it goes, it’s fine for a non-profit organization to advocate for a reducing-personal- consumption mentality. Some people, those who are more altruistic to begin with, will certainly respond to such calls, and forgo some consumption. Heck, they may even be happier for it, assuming they made the choice voluntarily. But if an organization really wants to reduce harm to the planet’s ecosystems, surely there must be more effective ways to do so.

Libertarians tend to recognize the acquisitive nature of human beings. We see in it a psychological driver for capitalism, which we see as the best system humans have found to date for generating wealth. Without the desire to acquire things for personal consumption, the profit motive wouldn’t exist, and capitalism would never have got off the ground. And if acquisitiveness topped out at a certain point (say, after a person’s need for food, clothing and shelter were met), capitalism would stall out once people started earning more than a few dollars a day. What we see of course is that regular people are now consuming more than their ancestors would have dreamed possible even for royalty, and doing it for a fraction of what it cost in real terms in previous generations. The fact that the human population has bloomed to billions and is able to consume at such a level without triggering a Malthusian crash is a miracle to be celebrated.

But it presents us with important questions: is all this prosperity coming at the cost of the other creatures we share the earth with, or even the earth’s living systems themselves? If so, could this ultimately lead to the demise (or at least impoverishment) of humans, if and when these natural systems can no longer support us? What moral responsibility then do we have to ensure that the earth’s systems stay intact for future generations of humans and other creatures?

I realize that not everyone is ready to wrestle with philosophical questions like this, and so environmentalist campaigns need to simplify them. However, I think that focusing on reducing consumption misses the mark entirely–it will never really resonate with most people because of our acquisitive nature, something passed down to modern humans via natural selection through millennia of scarcity.

So how do we allow for increasing levels of consumption while reducing harm to the environment? To answer that we need to remind ourselves how the earth is harmed by consumption, lest we conclude that all consumption is inherently harmful. Firstly, the earth (and the potential prosperity of future generations) is harmed if we deplete non-renewable resources, like coal or titanium. Secondly, the earth is harmed if pollution is created or habitat destroyed/degraded in the extraction, transportation, and processing of these raw materials. Lastly, there’s the harm that come from the disposal of these resources after use, whether by taking up space in a landfill, leaching toxins during decomposition, or requiring additional resources to recycle. The second and third issues exist to a lesser degree with renewable resources, like corn and wood, but renewable resources are certainly more sustainable than non-renewables.

It’s not surprising then that the environmental movement has focused on renewable resources for some time, and has achieved a good deal of success. The cost of solar panels for example, has come down tremendously in recent years, as growing demand has spurred competition and technological innovation. In this way, the desire to consume isn’t the enemy of sustainability; rather under a free market system, it is a force for positive change.

Why then, does the pace of innovation seem slow in comparison to the pressing need to shift to environmentally sustainable modes of production? The typical examples one hears from today’s environmental movement are: “corporations don’t want to change, they just want to protect their profits” or “industry is resistant to change, so we need more government in green technology”. Often such criticisms are leveled against capitalism in general, because it is always pushing towards greater consumption. By way of rebuttal, I will only say that I do not believe that ending capitalism will rid humans of their acquisitive impulses, and the alternatives to capitalism that have been tried in the past were not any more ecologically sustainable, given the technology humanity had at the time.

One thing libertarianism has to offer in response to the problem of slow development of renewable alternatives is its understanding of the influence of government regulation on an economy. Regulation, when enforced by law, can be see as a joint effort by politicians and the dominant businesses in an industry to stop time. The large businesses that have the resources to lobby government seek to prevent market change by setting up rules that favour the current methods of production over any that may be invented in the future by upstart competitors. Though regulation is often touted as being forward looking, in reality it is backward looking, and normally hostile to innovation.

Building codes and municipal permitting processes are a good example of this. Built into them are assumptions that buildings should be constructed according to familiar designs using familiar materials like wood, concrete and glass. Perhaps a house built of mud and straw would have better thermal properties (and hence use less energy) than one made of wood, but good luck getting your local council to approve the design!

Another example is automobile safety standards, which prescribe in detail how a vehicle must but designed and manufactured to be allowed on US roads. While safety is certainly a worthy goal, and for many buyers will trump other concerns, it limits the flexibility automakers have in developing more sustainable vehicles. For example, the heavy steel frame which is now required in most vehicles (to save occupants in the very unlikely event the car flips upside down) adds significantly to the vehicle’s weight, reducing its fuel efficiency.

In addition to limiting design flexibility, regulation also adds additional costs, not just by mandating more costly designs, but also through permit costs, reporting costs, and lost time in approval processes. Regulation can also bar private enterprise from competing in certain sectors, particularly in Canada where a crown corporations or public bureaucracies often monopolize or control these sectors. Power generation and distribution, sanitation and water, public transportation, medical care and insurance, lotteries and gaming, alcohol sales and distribution, and so on.

To take power generation as an example, most provinces allow homeowners to install solar panels on their roofs, and that may be of interest to those who have the financial means to make the upfront investment and recoup the savings slowly over the years through reduced electricity bills. What would accelerate adoption of solar and other small-scale renewable energy production technologies would be to allow small producers to sell excess electricity to their neighbours. Currently the monopolization of the electricity grid by provincial hydro authorities effectively prevents this. Such public monopolies, while they may have the honourable goal of providing necessities at reasonable prices, inevitably result in wasteful misallocation of resources. Take water utilities for example: typically, users pay a flat fee no matter how much water they use, providing no economic incentive for conservation. This results in strange workarounds during times of scarcity, such as by-laws that ban lawn watering on certain days.

As a rough test on whether it’s true that government regulation deters innovation, we can compare the fruits of two industries. Perhaps the comparison is not completely fair, one being a young industry, the other quite a bit older, but it illustrates the general point. The information technology industry is by and large unregulated beyond the basic regulations that all businesses face. It has produced a great variety of products and services in the few decades it has been around, and continues to do so at an accelerating pace. While there are a few giants dominating much of the market, there are also plenty of new entrepreneurs, the barriers to entry being very low.

Let’s compare IT to what is arguably the most regulated sector of the economy: banking. Central banks control the most basic feature of this industry, the price of money (better known as the interest rates), and regulate in detail how banks are to serve their customers. Banks are protected from competition by rules that make starting a new bank very difficult, and regulatory compliance measures that make running one difficult and expensive. They’re also protected from failure by the government with depositor’s insurance, and in extreme cases (like in 2008/2009), bailouts. While Wall Street banks may have invented some new financial instruments in recent decades, and most banks now offer many of their services online, for most small depositors and borrowers, the services have not changed much, and the experience of dealing with a bank often feels overly bureaucratic when compared with customer service we get in other industries.

There are other ways that governments prop up incumbent businesses and deter new entrepreneurs, such as subsidies and taxes, but I hope the examples above illustrate how government regulation limits innovation. If we can’t get everyone to voluntarily reduce their consumption (we can’t), and forcing them to reduce it is unethical (it probably is), then we desperately need innovation in renewable energy and resources if we are to move towards a sustainable future. Removing or reducing regulations on industry is one way to do that. What about environmental regulations, do they have to go to? It depends on the type.

Fines that punish those that pollute the commons are legitimate, and provide economic incentives for industry to come up with cleaner technologies. However regulations that specify specific technologies that industry must use are not helpful in the long run because they attempt to freeze industries at current (or past) levels of technological development.

Another form of environmental regulation is quotas, such as the allowable catch of a particular marine species that fishermen are granted by the government. This seems to be a very crude way of forestalling a tragedy of the commons, due to the impossibility of determining what the optimal size of the species’ population is (fishermen, conservationists and tax/license fee collectors are not likely to agree on the number). In the case of fishing, quotas only incentivize how to catch the most fish in the shortest period of time–not really the type of innovation that would make the industry more sustainable.

So, if we agree hectoring people to consume less is not very effective, and greater innovation in renewables is needed to conserve resources, what could be a better focus of an Earth Day campaign? One could be an informational campaign to let people know about green technologies that are in development or exist already on a small scale. Because the current environmental movement is so focused on blaming business for environmental problems and looking to government for solutions, news about sustainable innovation in the private sector tends to get drowned out.

One very exciting innovation that I’ve heard about recently is the production of biodiesel from algae. Algae produces a much higher oil content than the terrestrial crops currently used for biodiesel, and requires no fertilizer or pesticides to grow. Also, as it isn’t grown in the soil, it doesn’t deplete it, and instead pulls large amounts of carbon dioxide out of the air. Algae farms on the ocean would not displace food crops for humans (like growing corn for biodiesel can), and would also provide useful habitat for other marine species.

A second innovation I’ll mention is the use of insects to turn food waste into animal food. The black soldier fly is able to quite efficiently convert compost in high protein larva, which could be used as a substitute for animal and fish protein in food for pets or livestock.

For these kinds of innovations to have a significant environmental impact, they would require existing industries to be disrupted and restructured. They require us to think differently about the products we use, and will likely meet with resistance from vested interests, so an educational campaign to get over the initial hump of resistance would be necessary, but pay off in the long term.

Another way to help such innovation would be to channel investment capital to environmental entrepreneurs. The number of crowdfunding platforms continues to grow, and many of them are moving towards being able to provide contributors tangible benefits, whether it’s tradeable crypto-currency tokens, shares of company, or rewards such as free or discounted products and services. Why not make such an investment drive the centerpiece of an Earth Day campaign?

The desire for profit and to consume are not the enemies of sustainability, they are the engines of innovation, if they are allowed to operate in a relatively free market. Though misanthropic notions that compare human beings to a cancer on the earth have infected the environmental movement, and many environmental non-profits have come to see coercive power of government as the primary savior of the earth, these views are short-sighted, and will not get us out of our current environmental/humanitarian predicament. Because of this, the cause of environmental sustainability needs libertarians and others who believe in the transformative power of free markets now more than ever. If we aren’t able to innovate our way towards a greener future, eco-warriors and their political allies will continue to heap regulations on society until innovation can barely move at a snail’s pace. For this Earth Day and future ones, let’s seek out and promote campaigns that eschew moralizing in favour of encouraging innovation. And if we can’t find any, let’s start our own.