Legislating Value: Opportunities and Pitfalls in the Bid for a Sustainable Future

 Despite the recent economic downturn, more goods and services were produced in 2008 than any other year in human history. Individuals in the developed world have access to a vast array of goods and services that in previous centuries only the wealthiest could have hoped to enjoy. Much of this economic activity affects not only the buyers and sellers, but also third parties, including other people and the environment. These externalities were for a long time ignored, as both the land and its ability to absorb human impacts seemed boundless. However, the growth of our technological prowess and material wealth has been accompanied by consistent increases in the human population. Due to the strain put on natural systems by human production, there has been a growing concern that our practices are not environmentally sustainable. How are we to live more sustainable lives, and what are some of the political difficulties we will encounter? 

The issue first demands a definition of ‘sustainability.’ It is simple to say that a practice is sustainable or unsustain- able, but this obfuscates the moral framework on which this assertion is grounded. Instead, one should be asking, what are we sustaining, and who or what are we sustaining it for? To address these questions we rely on a judgment of what we believe to be intrinsically valuable. For example, if you believe that only humans have intrinsic worth, then your prescription for sustainable action will not involve the preservation of natural systems that do not directly benefit humans. There are always tradeoffs to be made, and differ- ent people would wish to make these in different ways. The first problem in becoming more sustainable, then, is finding agreement on what practices are and are not sustainable. 

 The important corollary to this question asks how we are to transition away from being unsustainable. There are two distinct methods: through new ethical attitudes towards the environment, or by enforcing environmental values through economic legislation. Most environmentalists prefer the first option: the problem, they say, is that nature has an economic use, “entailing privileges but not obligations” [1]. By des- ignating nature as something that has intrinsic value, they are rendering it morally equivalent to other entities that cultures generally give intrinsic value to, such as humans. If we had the same moral respect for nature as we did for other human beings, so the argument goes, then we would conserve more and pollute less. This method relies on the spread of an environmental ethic to be successful, and defines sustainability through popular consensus. 

 It would seem as though the push for an environmen- tal ethic is working. Exhortations to be “green” abound in advertisements and though popular culture, and there is a wide selection of products aimed at the environmentally conscious. All of this, however, has been ineffective at slow- ing down the growth of carbon dioxide emissions [2], forest clearings [3], and watershed depletion [4], to name but a few of the issues environmentalists are concerned with. What is it then that is going wrong? 

 It could be that spreading an environmental ethic sim- ply is not enough. Not everyone will be convinced, and sustainability requires large changes in economic activity very quickly. One problem is single-action bias. Psychologi- cally, we are hardwired to be satisfied after taking a single action to combat even complex problems. This means that we might make one small change, such as using energy-efficient light bulbs, without comprehensively reevaluating how we interact with the environment. Using energy-efficient light bulbs is great, but how can we force large corporations to pollute less and conserve more? Public opinion is beneficial in giving businesses an incentive to at least try to appear ‘green’, but it may be even more useful in providing the political support for laws that regulate how businesses in- teract with the environment. Instead of through popular consensus, sustainability would be defined by laws. In the form of taxes, subsidies, cap-and-trade markets, or outright prohibitions, legal regulation has the advantage of being comprehensive in scope and immediate in effect. Anything less would not be sufficient for environmental problems that are structurally pervasive. 

 There are, however, many difficulties in both writing and enacting the laws. As noted earlier, the authors of such laws must first decide what it is that we are to sustain, and then determine the exact level to tax, the number of permits to auction, or prohibitions to set. This relies on scientific knowledge that is still highly uncertain in both the particulars and general outcomes. Then, a system of enforcement must be devised, which can be costly and potentially circumvented by the less scrupulous. This arrangement would promote a more efficient allocation of resources by inducing shifts away from ‘brown’ (high-emission) economic sectors, but this is not necessarily equitable. Some sort of compensatory mechanism would need to be enacted so that these laws are fair to those who lose their jobs and need to be retrained, and for the poor who are disproportionately affected by the resultant price increases in basic necessities such as food and energy. 

 Beyond writing good laws, a significant challenge is likely be the political incentives that individual countries and politicians face. Pollution and climate change are problems of global significance, and in order to deal with them, large and expensive economic retoolings will need to be made by the global community. An individual country, however, could easily free ride on the rest of world if it chooses not to reduce emissions. It would then receive the benefits of reduced pollution and climate change, without having to pay the cost of reducing emissions. This is the classic “tragedy of the commons” scenario originally proposed by Garrett Hardin [5]. Similarly, “upstream” nations or communities will experience political pressure to continue practices that are economically advantageous for them, but which may cause adverse consequences for “downstream” nations. 

 Possibly the biggest hurdle is that global warming and pollution will hurt developing countries more, as their economies are generally agriculturally-based and they do not possess the requisite technology or resources to mitigate the effects of climate change. Developing countries also have comparatively lower per capita emissions and are already in parts of the world with above-average temperatures. The developed nations have the ability to dampen the effects of pollution and climate change, coupled with weaker in- centives to do so as their economies are not as reliant on favorable climate conditions. It is also incredibly difficult to believe that nations that are otherwise hostile towards each other will be able to agree to environmental standards. Without this happening, however, production of pollution- intensive goods will begin to relocate to countries with lax environmental standards, undermining the effectiveness of other environmental laws and boosting the economies of free rider countries. 

 Is there any possibility of a global consensus on envi- ronmental standards being reached? One way this could happen is if a major economic power legislated new trade laws that mandated certain environmental standards to be met in the production of imports. Other countries would then have to change their environmental standards if they thought that the trade with the first country was too important to lose. Of course, this is a big gamble for the first country if other countries decide to sever trade ties. For this to work in practice, both the United States and the European Union would need to aggressively push through trade laws. Other countries may follow suit, at least for their exports, although this would not affect world trade between other countries. 

 Even with this politically unlikely scenario, there are a lot ofunsolved problems. Choosing what we want to sustain,mustering the political effort to pass laws, and enforcing these laws still pose significant problems. Ethical changes, legal regulation and technological improvements cannot by themselves change our economy into a more sustainable one without significant costs. Add to this the scientific uncertainty in even the best models, and it becomes even more difficult to determine the optimal amount of pollution reduction. I do not believe that our political and economic systems of- fer much hope for resolving the global issue that is climate change. The prospects for curtailing localized pollution are greater, as there are fewer affected parties and more immediate costs and benefits. This will likely exacerbate problems for the developing world in the next century, while imposing significant costs on the developed world as well. Legislating value may be the only way to avoid these environmental costs, but passing comprehensive legislation may prove to be impossible in the current global political environment.   mustering the political effort to pass laws, and enforcing these laws still pose significant problems. Ethical changes, legal regulation and technological improvements cannot by themselves change our economy into a more sustainable one without significant costs. Add to this the scientific uncertainty in even the best models, and it becomes even more difficult to determine the optimal amount of pollution reduction. I do not believe that our political and economic systems of- fer much hope for resolving the global issue that is climate change. The prospects for curtailing localized pollution are greater, as there are fewer affected parties and more immediate costs and benefits. This will likely exacerbate problems for the developing world in the next century, while imposing significant costs on the developed world as well. Legislating value may be the only way to avoid these environmental costs, but passing comprehensive legislation may prove to be impossible in the current global political environment.

 Dan Plechaty is an undergraduate at the University of Chicago