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We are all environmentalists now. The growing threat posed by global warming makes it impossible to ignore the environmental impacts of our actions. No presidential candidate in 2008 will be able to act as if climate change is a loony leftist cause best fought with aggressive development of the Arctic.
But environmentalists should celebrate their much-deserved success with an increasing commitment to responsible policies that target climate change and weigh costs against benefits. In the early days of environmentalism, almost any action could be justified as a means of increasing environmental awareness. Now we are all aware and committed to the environment, and it is time to turn to policies that are both green and smart.
Smart environmentalism has three key elements. First, policies should be targeted toward the biggest environmental threat: global warming. Second, our resources and political capital are limited. This means we must weigh the benefits of each intervention against its costs. Third, we must anticipate unintended consequences, where being green in one place leads to decidedly non green outcomes someplace else.
These simple rules provide a policy road map for environmentalism. The fight against climate change requires us to reduce greenhouse gas emissions. The most effective way to reduce emissions is to charge people for the social costs of their actions with a carbon tax. A significant carbon tax would be painful -- gas will cost more at the pump -- but it is never easy to change behavior, and change behavior we must.
The big challenge in reducing greenhouse gases is to reduce the growth of emissions in rapidly developing economies like China and India. I suspect this will require Europe and the United States to create incentives for these places to reduce emissions. One possible course of action is for American and European carbon taxes to provide funding that could be used to reward poorer countries for cutting emissions.
New technologies are likely to be our best weapons against climate change and we should try to encourage more energy-efficient innovation. Our patent system is poorly suited to encourage these innovations, since successful innovations will create environmental social benefits that far exceed the private revenues earned by the innovator. Patents also make it less likely that technology will be transferred to the developing world. A better system might be to offer large public prizes that reward innovations, which are then made freely available throughout the globe.
But smart environmentalism doesn't just mean more government programs, it also means rethinking current policies. Our emissions policy, which requires regular emissions tests for newer vehicles, is expensive to operate and poorly designed to fight climate change. After all, it does nothing to induce less driving. Even more problematically, by letting owners of older cars off the hook, the current system imposes costs on the Prius driver but exempts the drivers of the vintage gas guzzlers that create the most emissions. We should require different emissions tests and even higher emission taxes for older cars that generate higher environmental costs.
Our paper recycling programs cost time and money and do little to protect first-growth woodlands and rain forests. The trees used by paper mills are a renewable resource. When people use more paper, suppliers plant more trees. If we want bigger commercial forests, then we should use more paper not less. Our policies should directly protect important wildlife habitats, not try to reduce our demand for paper.
Perhaps the most environmentally problematic local policies are land-use controls. The foes of development correctly point out that new development will use energy and land, but the right calculation also considers the costs created by stopping development and pushing it elsewhere. When we stop development in Boston's inner-ring suburbs, we shift development to areas with fewer people that might oppose new development. The move from higher- to lower-density development ensures more driving and energy use. Protecting green space in the inner suburbs is a form of environmentalism, but it is an environmentalism that creates local benefits by imposing costs on the rest of the world, since it pushes development into the highway-crazy exurbs.
The state should take the lead by requiring environmental impact reviews to compare the environmental costs of allowing a project with the expected environmental consequences if a rejected project is built elsewhere.
Climate change is too important for us not to consider all of the consequences of our policies. We should rethink policies that appear environmental but that actually ensure more driving and greenhouse gases.