The sustainability movement isn’t interested in the kind of analysis that scholars bring to controversies. It wants zealots, such as the “eco-reps” now employed on many campuses to push the agenda. Recycling, for instance, is always advanced as an imperative for saving the planet. There are trade-off questions about recycling that have caused many people to conclude that its costs often exceed its benefits, but students are not encouraged to think about them.
It strikes me that introductory economics teachers need to include some thoughts on sustainability. Here are mine:
1. The most reliable indication of sustainability is the ability to make a profit at unsubsidized market prices.
2. When people disagree with the market’s judgment, there is a good chance that they are focusing on a cost they can see and ignoring a cost that they cannot see. For example, someone who argues that “eating local” is sustainable probably sees the cost of transporting food but does not see the cost of allocating land and water to inferior uses. Before modern transportation, refrigeration, and food preservatives, more of us “ate local.” Consequently, we wasted land near cities on farms, and that land now is used to house people or has been returned to wilderness.
3. If in order to get people to recycle you need to use subsidies or regulations, then that is a sign that recycling does not save resources and instead wastes them.
4. Remember that one of the laws of science is that in chemical reactions matter is neither created nor destroyed. There is a sense in which production of goods and services does not “use up” physical resources. Instead, it changes the form of matter from something that is relatively useless to something that is relatively useful.
5. The great industries of the world came about because entrepreneurs were able to take abundant, seemingly useless resources and make them valuable. Before internal combustion engines, oil was just annoying gunk. Before computers, silicon was just the main constituent in sand.
6. In a free-market economy, price signals tell consumers and entrepreneurs what can be wasted and what must be conserved. If property rights are clear and market prices are free to move, then there is no need to fear running out of any valuable resource.
7. Public policy is subject to public choice problems, including the bootleggers and baptists problem. I believe that the consensus now is that using corn to fuel cars is not sustainable. If a free market had experimented with using corn to fuel cars, the experiment would have failed and that would be the end of it. However, because there is now a substantial lobby for the ethanol mandate, government policy to enforce the use of corn to fuel cars remains in place indefinitely.
Properly taught, freshman economics has a lot of useful things to say about sustainability.
Portland, Maine just instituted a non-reusable bag fee on food retailers (and a ban on styrofoam). I got into a mini-tiff with a local science-beat reporter who swooned over this on his blog (http://www.nashuatelegraph.com/granitegeek/1061392-468/portland-starts-charging-5-cents-for-non-reusable.html); he led off by claiming the action exemplified “what economists call market signals”.
Wish I had read this first, I would have been able to rebut better.
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That’s priceless!
Even on its own term the sustainability movement seems absurd. It would imply that because we might one day (let’s be generous and say within 100 years) run out of something (say petroleum), we should never use it at all. That seems absurd to me. Let’s use it up and then use something else.
BTW it seems to me that landfills are not bad places to store stuff that we might one day want to recover and use.
Another brilliant piece of Klingism for the ages. Every point, every line, heck every word, perfect – like a classic Bobby Fischer chess game.
“It’s very hard to be against sustainability. In fact, the less you know about it, the better it sounds.” ~ Robert Solow
http://www.owlnet.rice.edu/~ec
Oooops
http://www.owlnet.rice.edu/~econ480/notes/sustainability.pdf
Nice post, but you left out a discussion of externalities.
More economically-minded sustainability advocates will talk about externalities, as in CO2 having (unpriced) externalities. There are some externalities associated with garbage (i.e. that at high-disposal prices we will see dumping). Personally, I think this is largely a fig-leaf covering a quasi-religious belief (and the seen vs. unseen cost). To be charitable towards those who disagree with us this probably needs to be mentioned though.
I don’t hear a lot about getting the CO2 tax price right. I hear a lot of “science denier” strawmanning, which I assume is prep to make sure we get the CO2 tax price very wrong.
To me, the real crux is risk. Us prepper types see value in distributed production and knowledge. Not many would legislate it though.
As Josh Sacks commented, externalities are very real but, unlike the sustainability movement, it should be emphasized that forcing appropriate parties to internalize those costs is the best economic policy.
Also, there are very real problems due to the tragedy of the commons and, more generally, lack of strong property rights – titles to dwellings and other buildings in developing countries, fisheries, public land, etc.
1. If there were only something such as an unsubsidized market.
2. When people disagree with the market’s judgment, they are sometimes considering these other neglected costs.
3. If you use regulations and subsidies, it may be because you want to extract resources from others cost or see these as more efficient than a myriad of taxes on everything to accomplish the same.
4. Remember also there is entropy, and small distributed efforts can accomplish great things.
5. Recycling is making available these resources to future entrepreneurs in a cost effective manner.
6. Nor is there any reason to pay more to waste something because those costs were not taken into account.
7. Everything is public policy.
I agree with all of these, but especially with #3, which should (as Tyler Cowen says) be shouted from the rooftops.
The sustainability concept is a religious, superstitious, irrational mental condition. The economic inefficiency it implies is a price we pay for feeling righteous. Your reasoning strikes me as true and beautiful, but it is beside the point. Yet I hope that your pointing out the absurdity of the whole recycling, dont waste, eating local, etc. thing will be picked up and promote change. Although there is a chance that an even worse idea will take its place.