Leaving Green to the Free Market - Barron's

by: Rachael Granby

Barron's Thomas G. Donlan makes the case that the best way to a greener planet is to leave the job to free markets.

In the 1970's, Congress created the Environmental Protection Agency, the Clean Water Act, the Clean Air Act, the Endangered Species Act and the National Environmental Policy Act. Since then, environmental laws have proliferated on the national, state and local levels. But some of these laws may be useless and, worse, some may hurt more than they help.

For example, some Western donors's restrictions on aid to poor tropical countries require the use of environmentally sensitive insecticide strategies. However, DDT, which was banned by the EPA in 1972, can be used to fight malaria epidemics and these countries see 2.7M people die annually from malaria.

Another example is the real but hidden cost of the removal of lead from the atmosphere by banning it from gasoline. The program was successful but new-car buyers carried the cost of the technology to make car emissions lead-free.

More recently, a New York City green bill touted by Mayor Michael Bloomberg for its job creation and energy advantages in fact requires landlords to spend $3B on building improvements, will drive up the cost of labor in the city and bulks up the public payroll.

"Energy efficiency is such a good thing that it would be better if governments did not make it mandatory," writes Donlan, "but instead let free markets seek out the efficiencies - a task for which they're ideally, and provably, suited."