The hidden cost of environmental scares

February 17, 2013

Environmental scares have a long history. At the end of the 18th century, Thomas Malthus predicted that rapid population growth would lead to war, pestilence and famine. Almost 200 years later, the 1972 Club of Rome report, The Limits to Growth, pointed to similar consequences due to rising populations, pollution and the exploitation of finite natural resources.

But the disasters failed to materialise. In flexible market economies the price mechanism incentivised consumers to use scarce resources more efficiently. Entrepreneurs found lower-cost substitutes and developed new technologies to improve productivity, for example through the new crop varieties that facilitated the green revolution. Nevertheless, the ideological climate created by The Limits to Growth contributed to the implementation of some unpleasant sterilisation programmes in developing countries in an attempt to reduce birth rates.

These consequences were relatively minor compared with the effects of Rachel Carson’s 1962 book Silent Spring. The resulting assault on pesticides lead to the banning of DDT in the USA and the steering of foreign aid to prevent its use in tropical countries. As revealed in Malaria and the DDT Story, this green crusade contributed to the death of up to 100 million people, as efforts to eradicate the disease were hampered by controls on spraying.

The world is now gripped by another environmental issue: climate change. The latest IEA monograph, Climate Change Policy: Challenging the Activists, describes how the policy agenda has been captured by quasi-religious ‘global salvationists’. Even more than in previous green campaigns, dissent has been ruthlessly suppressed. Organisations like the Intergovernmental Panel on Climate Change (IPCC) are dominated by ‘true believers’ and the political process is noticeably biased towards socialist-style initiatives based around central planning and detailed regulation.

In the worst case scenario, global warming will provide a rationale for state officials to increase dramatically their control over households and businesses, in terms of their freedom of movement, housing choices and energy consumption. Entrepreneurship and innovation will suffer and economic growth rates will fall. Intrusive bureaucracy will thrive. This will cause discomfort in the West, but it will be disastrous for developing countries. Even a small cut in their growth rates will condemn millions more to poverty and disease.

As the authors of the book explain, climate change can be addressed by relatively low cost policies that reduce emissions without significantly reducing the dynamism and flexibility of market economies. The ability of individuals, businesses, communities to innovate and adapt can be retained. Accordingly, calls for central planning and heavy regulation should be strongly resisted.

30 September 2008, IEA Blog

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Planning policies that brought flood misery

February 17, 2013

Tighter planning and building regulations are at the forefront of the Government’s efforts to tackle global warming.
New homes must adhere to strict insulation standards and they must be packed closely together, both to economise on land and to encourage public transport use.

On some schemes, councils restrict the number of parking spaces to discourage car ownership. Moreover, a high proportion of new houses are built on brownfield sites, often reclaimed from industrial uses.
Such measures enjoy widespread support across the major political parties. Yet the negative environmental effects of these policies are substantial, and there are far more efficient ways of limiting carbon emissions. As the Government proposes to build three million homes by 2020, it is critical it looks again at its policies on how and where new houses are built.

Severe problems are caused by the locations that developers are being forced to build on. Many brownfield sites are particularly vulnerable to flooding – as disastrously demonstrated in recent weeks.

Traditional industries clustered in flood plains to take advantage of flat land and easy access to canals and railways. Given the high costs, it seems unlikely that such locations would have been redeveloped without generous government grants and restrictions on building on more suitable greenfield sites.

Planning policies must therefore take part of the blame for the scale of the flood damage.

And there are other risks facing property owners. One new development near Leeds is squeezed in between a busy dual-carriageway and a railway line. It also sits underneath a run of electricity pylons. Unfortunately, such substandard sites are all too common thanks to current planning policies.

High density housing also has negative consequences. Small gaps between homes mean that nuisance from neighbours is more likely. Everyday annoyances such as screaming children, loud music and unpleasant cooking smells are far more intense when households live cheek by jowl.

While housing in other developed countries has been gradually improving over the last few decades, this has hardly been the case in the UK. Regulations mean that Britain’s new homes are now the smallest in Western Europe. They are probably smaller now than they were in the 1930s when the country was only a quarter as rich.

It is also notable that the planners have severely limited the size of gardens in new developments. This doesn’t seem sensible in the light of government exhortations that children should play more sport. In many new developments there simply isn’t room for the games of football and cricket that helped ensure physical fitness in previous generations.

In locations where new private developments border older council estates, such as Sunnyside in Rotherham, the contrast is particularly marked. The council houses, many of them occupied free of charge through the housing benefit system, often have larger gardens than the new private homes.

Many council tenants are also benefiting from the Government’s lavish Decent Homes initiative. They are getting brand new kitchens, bathrooms, central heating systems and double glazing.

Meanwhile, their owner-occupier neighbours are working hard to pay expensive mortgages to obtain the same facilities, as well as subsidising the council tenants through their taxes.

This policy undermines the Government’s stated aim of providing incentives for people to move away from welfare dependency and into work.

There is therefore a strong economic and environmental case for liberalising planning and building regulations. Allowing developers to build larger new houses on more spacious plots would help ensure that today’s younger generation can enjoy the same standard of housing as their parents.

While liberalisation would involve using more greenfield sites, this is preferable to cramming more houses into urban areas and making our cities more congested, with less and less open space.

The environment of homeowners would also be dramatically improved. Lower densities would reduce the impact of neighbourhood nuisances and facilitate the large gardens that are ideal for family life.

The development of poor quality brownfield sites next to rivers at risk of flooding as well as roads, railways or crime-ridden social housing estates would no longer be necessary. Britons could enjoy the high quality of housing that is taken for granted in other industrialised nations.

If the Government wants to reduce carbon emissions, it should tackle them directly rather than imposing complex and expensive regulations on housing and other sectors.

There are effective ways to reduce carbon emissions while actually benefiting the economy. These include reducing power consumption within the public sector, raising VAT on domestic fuel to the standard rate (with compensatory tax cuts elsewhere) and reducing foreign aid when it causes deforestation. Such measures would be far more effective than cramming homeowners into small houses on tiny plots.

Economists have known for years that regulation is an inefficient and often counterproductive way of achieving a given objective. Unfortunately, the bureaucrats, planners and politicians make their living from regulation – at the expense of the rest of us.

16 July 2007, Yorkshire Post

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Should firms that create rubbish pay?

February 17, 2013

SIR – Zac Goldsmith (Mail on Sunday, September 9) is deeply misguided in his advocacy of draconian controls to force businesses to recycle. Landfill is often the most cost-effective method of waste disposal. Both the amount of land required and the environmental impact are negligible. In contrast, recycling generally uses more economic resources than it saves. It therefore must be artificially supported by subsidies and regulations, which now cost the British economy at least £2 billion every year. Before the Conservative Party adopts green policies it should carefully consider whether the environmental benefits are really worth the economic cost.

16 December 2007, Mail on Sunday

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Recycling is the real waste

February 17, 2013

The government constantly tells us that recycling is a wonderful idea. TV advertisements bombard us with this message. Children are taught to recycle at school. But are the environmental benefits of recycling really worth the economic cost?

That cost is growing rapidly. The landfill tax, introduced to encourage recycling, will increase by an inflation-busting 14 per cent in April. This levy will cost UK businesses and householders £900m in 2007.

Then there are the costs of collecting and reprocessing the recyclable materials – an estimated £400m per year, paid for by council tax payers.

Numerous EU waste directives are also being forced on different industries. The Waste Electronic and Electrical Equipment Directive alone cost British business £200m in 2006.

Despite all this expenditure, running into billions, it is difficult to identify any significant benefits from recycling – except where it occurs commercially without government intervention, as in the traditional scrap metal business.

The amount of municipal waste being sent to landfill has declined, but then again modern landfill sites have few negative environmental impacts. They are lined so that pollution cannot seep into water courses. Unpleasant odours and dust are carefully controlled.

Often landfill has a positive role in rehabilitating landscapes scarred by quarrying, such as the Yorkshire Wolds.
It is a myth that there is no more room for landfill. Currently, landfill sites take up a little over one tenth of one per cent of the UK. Since rubbish rots and can be piled up, there is no practical limit on the amount of waste that can be stored. Any shortage of landfill capacity has been artificially created by the planning system and a government desperate to provide a rationale for costly recycling policies.

Another argument is that recycling saves energy and therefore reduces carbon emissions. Yet the amount saved is trivial, and there are far more efficient ways of reducing consumption – for example, by ending subsidies to almost empty trains and buses.

Even if every steel can in the UK was recycled the amount saved would amount to less than one-thousandth of the country’s annual energy usage.

Many people also believe that recycling paper saves trees. In fact, the opposite is true. Recycling reduces the demand for wood pulp and reduces the value of trees. Fewer are therefore planted. This is a shame because young forests are particularly good at absorbing greenhouse gases.

Recycling may also be having a damaging effect on many Third World countries. Some, such as Jamaica, are heavily reliant on exports of raw materials such as bauxite (to make aluminium) and iron ore (to make steel). By subsidising recycling, the Government is indulging in a form of protectionism, effectively reducing the demand for imported raw materials while artificially supporting the domestic waste-processing industry.

Poverty is the real enemy of a clean environment. In Africa, tens of thousands die every year from respiratory diseases caused by burning wood and dung in open fires for cooking.

Recycling both reduces the income of poor countries that rely on raw material exports and reduces economic growth in industrialised countries burdened with additional taxation and red tape.

Given that the environmental case is weak and that the economic case is non-existent, why does the Government continue to promote recycling?

One answer is that it doesn’t have much choice. EU legislation means that unless the proportion of household waste recycled is increased dramatically, local councils will face huge fines of up to £150 per tonne. This is particularly worrying for boroughs such as Bradford and Scarborough, where recycling rates are well below the national average.

Within local authorities there are also those with much to gain from the growth in recycling. A growing army of bureaucrats has been employed to supervise the implementation of EU targets by microchipping wheelie bins and rummaging through other people’s rubbish – a Soviet-style nightmare that few could have envisaged even five years ago.
Many waste-processing companies have also gained from recent legislation, and these comprise an influential lobby in favour of further protection and subsidy for their industry.

The main losers are ordinary householders facing increases in council tax, higher prices in the shops and being forced to perform the pointless chore of separating out their tin cans and newspapers. With the introduction of hefty fines for those who refuse to recycle, it remains to be seen how much state control will be necessary to enforce these costly and misguided policies.

4 April 2007, Yorkshire Post

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