July 12, 2005

Government environmentalism

John Whitehead writes in Enviromental Economics:
Economists, as a group, prefer market solutions to government solutions. Free market environmental solutions sound wonderful, and I'm tempted to jump in, but I question whether, in practice, a policy of assigning property rights works. It seems that most global (e.g., climate change), national, regional (e.g., acid rain), and even local (e.g., drinking water) environmental problems can not be solved by assigning property rights and allowing private negotiation to work its magic. The biggest problem, it seems, is the enormous costs of getting those who suffer the costs of pollution together for negotiation and creating incentives to avoid free riding.
Yes, that is a big problem, perhaps the biggest one. So big that Whitehead does not "jump in" and instead suggests "some sort of government regulation." Government solutions sound wonderful, and I'm tempted to jump in, but I question whether, in practice, a policy of assigning powers to a few individuals works. It seems that most global (e.g., climate change), national, regional (e.g., acid rain), and even local (e.g., drinking water) environmental problems can not be solved by allowing politicians and their ever-lobbying friends to work their magic. The biggest problem, it seems, is the enormous costs of getting those who suffer the costs of pollution together for lobbying and creating incentives for politicians to work in the public interest.

Now let us look at a practical example, provided by Whitehead himself (from an article in the
New York Times):

The earthen cliffs near this seaside harbor town have been sporting colorful decorations recently: erosion by the gentle waves of the Irish Sea has exposed the scraggly remnants of hundreds of blue, black and yellow trash bags. The shredding plastic flutters in the wind alongside jutting scraps of rusted metal; the twisted wrecks of unidentifiable junked machines already lie on the rocky beach below.

The eroding coast at Bray's municipal dump has revealed blue, black and yellow trash bags, part of the 200,000 tons of debris buried there over the years and now part of Ireland's big waste management problem.

Some 200,000 tons of rubbish was buried over generations at this municipal landfill, half an hour south of Dublin, until it was closed in the early 1980's. Now that the dump is falling into the sea, the mess on the beach has become the symbolic tip of another iceberg: this tiny island nation's historic inability to deal with its garbage.

Bray, some say, is the forefather of a waste-management situation that has spiraled out of control. Ireland's "Celtic Tiger" economy generated a vast increase in garbage over the last decade. This unpleasantly tangible side effect met with Ireland's inadequate capacity, expensive landfill fees and lax oversight to create a roaring black market in garbage collection. Construction companies and even homeowners paid unscrupulous truckers to cart away rubble and trash.

Carting industry executives say as much as one million tons of waste, or 15 percent of the national total, still disappear illegally each year, and the money changing hands over it may reach up to $120 million.

Whitehead comments:

Is a "roaring black market" the same thing as the free market outcome without some sort of government regulation?

Yukky, if so.

Isn't a "municipal landfill" sitting close to public goods (the beach and the sea) the same thing as the government outcome?

Yukky.

And finally, I would like to know where that black market garbage goes. I bet much, if not all, ends on public lands.

1 comment:

  1. Thanks for the comment.

    Actually, the NYT was using the legal dump symbolically due to the residence of a government official in a town. Much of the discussion is about illegal dumps -- that arise due to strict zoning laws and high tipping fees, I think.

    - John Whitehead

    ReplyDelete