Stroup: Environmental Regulations Always Have a Cost

by David Bier on January 19, 2012

in Blog

In this excerpt from Eco-nomics: What everyone should know about the environment, economist Richard Stroup explains why there’s always a cost to environmental regulations. This is because when people are faced with choices, they must always give up something to get something. Many environmentalists ignore this cost as Stroup explains.

Eco-nomics was published in 2003

The Forest Guardians, an advocacy group based in Santa Fe, New Mexico, sued the federal government to stop logging on the national forest in New Mexico. The group thought that the forests should be preserved rather than cut down, and it pushed for such policies during the 1990s.┬áIn 2000, a fire began around Los Alamos, New Mexico, that eventually wiped out many of the forests that the Guardian wanted to preserve. When the fire was over, Rex Wahl, executive director of the Forest Guardians, reconsidered his position. “Judicious cutting of small trees is what’s needed,” he said.

This example illustrates one of the problems with environmental issues. Things are not always what they seem. The Forest Guardians thought that its goal should be to preserve trees. Yet by ignoring the need to thin the forest and remove dead and dying trees, they allowed the forest to become vulnerable to wildfire, and the ultimate destruction of the forests was much greater.

It’s one thing to be passionate about protecting the environment. It’s another thing to be successful at it. Many laws have been enacted in the United States to clean up pollution or preserve natural beauty, but many of them have unintended consequences. They don’t save the species they were supposed to. Or they don’t clean up the rivers as Congress intended. They end up costing a lot of money, often creating large government bureaucracies that can’t seem to achieve the goals that seemed within reach when the agency was formed or the law was passed.

On the positive side, the air and the water in North America are getting cleaner, and a lot of land retains its natural qualities. Indeed, lakes and rivers that were dirty have been cleaned, and more and more Americans are able to live in surroundings that they find pleasant.

In a land as rich as the United States, why do we face so many difficult choices about the environment? Scarcity, even in a nation as wealthy as the U.S., is always with us, so choices must be made.

We have vast forests in this country but not enough to provide all of the wood, all of the wilderness, and all of the accessible recreation that we want. As soon as we log trees, build roads, or improve trails and campsites, we lose some wilderness. Similarly, we have large amounts of fresh water, but if we use water to grow rice in California, the water consumed cannot be used for drinking water in California cities. If we use fire to help a forest renew itself, we will have air pollution downwind while the fire burns. We have many goals, so we have to make choices about how to allocate our limited resources. The cost of those choices is what we give up–the cost of opportunities lost.

Trouble is, people have differing goals and disagree about which choice is the best one. Pursuit of differing goals may lead to conflict. Nowhere is this clearer than in environmental matters. California’s San Bernardino County was about to build a new hospital. Less than 24 hours before groundbreaking, the U.S. Fish and Wildlife Service announced that the flower-loving Delhi Sands fly, which had been found on the site, was an endangered species. So the county had to spend $4.5 million to move the hospital 250 feet to give the flies a few acres to live on and a corridor to the nearby sand dunes. It also had to divert funds from its medical mission to pay for biological studies of the fly.

Environmentalists who want biological diversity were relieved that the hospital would move, but county officials were upset at the delay and the high cost that its hospital budget and the taxpayers would have to bear. To use resources one way sacrifices the use of those resources for other things. There is no escaping the cost.

San Bernardino County faced a choice between timely provision of a health care facility and protection of a unique species. Often the choices, however, are between environmental goals. Our old-growth forests can be preserved, but that means giving up the enhanced recreation and wildlife appreciation that trails and campsites bring for many people. Strict preservation (which is what a wilderness designation means) also means that trees can’t be thinned to minimize insect infestation and potentially catastrophic fires. In that case, the choice could be between keeping old-growth trees standing–until the next fire–or cutting some of them down so that more of them will be saved in the long run.

Scarcity is a fundamental fact of life, not just of economics. It is always present in nature, even when human beings are not…. In other words, scarcity and competition are not ideas that are limited to selfish human beings.

P.Selvaraj January 20, 2012 at 1:41 am

excellent treatment of scarcity vis-a-vis competition!

Comments on this entry are closed.

Previous post:

Next post: