Moving Beyond the Tired 'Economy vs. Environment' Debate

The "economy vs. the environment" debate is as old as the environmental movement. Despite holding little explanatory power, the debate survives because the leaders in certain highly-polluting industries do not want to see their profits diminished by stricter regulation. They lack the creativity to think beyond 20th century technologies, and oppose environmental regulation with every means at their disposal.

The anti-regulatory forces pour millions of dollars into misinformation and propaganda campaigns, and finance politicians and political groups that fan the flames of fear and paranoia to defeat common-sense environmental goals. These groups find their fullest expression in the modern Republican Party, which has taken a radical anti-environmental and anti-science bent, but they also target key Democrats in fossil-fuel dependent regions.

Industries that pollute have the right to oppose regulations they deem antithetical to their economic interests (though not to lie about them). Unfortunately, their anti-regulatory fervor has crowded out reasonable debate about the proper role of government in environmental protection.

The bottom line is that government has a strong role to play in regulating pollution, the worst forms of which occur because of persistent market failures. There are legitimate arguments for severely restricting the government's role in given markets (e.g., housing). At the same time, top economists the world over have come to recognize that most markets cannot provide adequate environmental protection. Markets can do some things extremely well, but optimizing pollution levels is not one of them.

At this time of great environmental challenges, it is imperative that responsible business leaders play a more constructive role in the discussions over environmental policy. They can begin by acknowledging that government has an active role to play, and help steer government policy in the most efficient, transparent, and equitable directions.

We hear a lot these days about how uncertainty is bad for business. This is true, but it's no reason for business leaders to allow the anti-regulatory forces to dominate the debate. When this happens, everyone loses: society gets higher levels of pollution and environmental degradation, and businesses remain unclear about the regulatory future. And without fail, in the absence of Congressional action on large issues such as climate change, more command and control style regulations (which are often less efficient because they do not allow for maximum flexibility) become the default position as regulations are left to the EPA.