To Save the Earth, Encourage Economic Freedom

The best way to create sustainable environmental policies around the world is to increase economic growth and the standard of living.

by Terry Miller and Anthony Kim
Opinions at
December 29, 2009

A shadow hung over the Copenhagen conference. The credibility of sophisticated climate science has been tainted by allegations that key scientists and institutions manipulated data and access to publications to support the case for global warming. Still, many around the world would support sensible, cost-effective strategies to minimize the risk of man-made global climate change.

The inconvenient truth, however, is that the mammoth government regulatory schemes discussed at Copenhagen are both prohibitively expensive and unlikely to work — the worst possible combination in any cost/benefit analysis.

There is a better way.

For 15 years, The Heritage Foundation and The Wall Street Journal have been measuring economic freedom in countries worldwide. Our historical evidence and volumes of supportive social science research demonstrate that economic freedom is good not only for individual economic advancement, but for the progressive values and public goods that people seek for society as a whole.

It’s simply better to live in a free society. Higher levels of economic freedom lead to higher living standards and healthier human development. Greater economic freedom provides more choices and improves the quality of life by opening opportunities and promoting innovation.

The benefits of economic freedom also extend to environmental protection. Proponents of cap-and-trade schemes or other massive government regulatory interventions assert that only a strong government can protect the environment. In fact, the market forces unleashed in an economically free society are far more likely to drive economic results in the positive directions demanded by those concerned about the environment.

The most remarkable improvements in clean energy use and energy efficiency over the past decades haven’t been as a result of government regulation. The most progress was driven by advances in economic freedom and freer trade. These unleash greater economic opportunity and increase prosperity, generating a virtuous cycle of investment, innovation, and dynamic economic growth.

The fundamental flaw of those who favor new government regulations is their belief that there is a trade-off between economic growth and environmental protection. They seem to think that to get more of one, you have to have less of the other. The truth is just the opposite: to get more environmental protection you need more growth, not less. And the surest path to economic growth is through greater economic freedom.

A recent study from the World Bank reports that freer trade is “a key factor in helping developing countries reduce their greenhouse gas emissions and adapt to climate change.”

Other evidence abounds…

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Terry Miller is the Director of the Center for International Trade and Economics (CITE) at The Heritage Foundation. Anthony Kim is a Policy Analyst in CITE.

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