The Environment and the Poor

A young lady I know was recently quoted in her high school yearbook saying she was concerned about the environment and the poor. This raised some questions for me. What is the impact of attempts to save the environment on the poor?  How do they benefit and what are the costs the poor bear for a cleaner environment?

It is obvious that certain improvements are worth the costs. In other situations the tradeoff is more dubious. The 80-20 rule for engineering says that 80 percent of the improvement can usually be made for 20 percent of the cost. After that, each increment of improvement comes at an ever higher cost.

I remember coming out of river downstream from a steel plant in Baltimore totally covered with red metal fillings from the plant. Photos of Lake Erie “on fire” near Cleveland added to the push to do something to clean the environment. We have made remarkable progress in the last 40-50 years.

But it seems that some people are never satisfied and ever more purity is required. We have to evaluate tradeoffs and give those paying the costs a place at the table. Let me offer a simple rule. The environment is definitely more important than your job. It is not more important than mine.

On a trip to the Alaska’s southeastern “panhandle”, our tour guide spoke of a seafood canning factory that had been either closed or blocked. He commented that the scenery was prettier but, from the tone of his voice, it was obvious he would have preferred a well-paying job to schmoozing tourists for a living.  It seemed cruel to me to lower people’s standard of living so their town would be slightly prettier when I chose to make a once-in-a-lifetime visit.

There was a man who was a very strict vegetarian. He was in Russia at the collapse of the Soviet Union.  When he came home, he was at a party and his friends saw him eating meat. They asked him about it and he said, “Vegetarianism is a luxury for those who have enough to eat.”

Let’s consider the impact of proposed environmental moves on three different people.  The first is a member of a wealthy family. They can send their child to an expensive university without asking for student loans.  This person considers protecting the environment very important but it costs him very little. He may defer a trip or spend more to get a hybrid car, but any impact on his lifestyle is, at least in part, a result of his own choices.

Another person is working a full-time job and trying to go to college at night. Every nickel matters to him. He wants to save money for tuition, books, travel between school and work and even for a light bulb to allow him to study at night. Relatively small cost increases, even if they protect the environment, have a big impact on this person. He may have to eat a cheaper meal or skip a movie to save the money to pay the extra charge. At worst, the charges could mean he would have to drop out of school or skip a semester. For him, the incremental improvement to the environment needs to be fairly important before he has to pay the higher price.

The third person lives in the third world. This person constantly lives on the edge of starvation. Any increase in the cost of food is devastating. I wish this were theoretical, but it is not. There have been food riots recently due to sudden increases in the price of corn.  The price has gone up because, in the name of environmentalism, both major American political parties have been catering to corn producers. The ethanol mandate means that almost a third of America’s corn crop is going into ethanol. This is raising the cost of corn worldwide and people are starving.

The political pandering on ethanol raises a bigger problem. Often, environmentalism is used as a way to control poorer people or as an excuse for political favors. The EU has used environmental concerns for years as a way to block imports, especially from Africa which would compete with EU farmers. Highways and other improvements blocked for environmental reasons increase commute times and raise of the value of housing owned by those in control at the cost of commuters and those who have to travel further from their less expensive housing.

Clearly, there will be winners and losers in any political decision, including environmental decisions. In his book, Cool It!, Bjorn Lomborg discusses the impact of various proposals on the poor. He has worked with other economists to try to evaluate how best to help the poor and the world’s environment. It is the most balanced discussion of the issue I have seen.

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