The Riley Institute, Furman University
September 27, 2006
The National Conference on Environmental Policy
“The Environment: Critical Issues of the 21st Century”
The Riley Institute
Greenville, South Carolina
September 25-27, 2006
Thank you for this opportunity and this challenge to identify the world’s most pressing environmental problems and to lay out my solutions, in 5 minutes.
The major environmental problems facing the world today are not pollution, desertification, rainforest destruction, resource depletion, or species extinction. Our major environmental problem lies not in the natural world, but in the realm of man-made institutions that ensure the environment’s continued demise. Our problem is that we humans have constructed a world in which some have an incentive and the power to destroy the environment, with impunity.
We don’t lack the technology or the science to live sustainably on the earth, only the human incentive and accountability structures to ensure that we do so.
Here’s how I would correct the situation and save the planet.
First, I would shut down the World Bank.
As the world’s preeminent architect and financier of Third World development, the Bank has financed dams that have flooded precious farmland, opened up rainforests for settlement, built factories that pollute, pulp mills that raze primary rainforests, irrigation schemes that salinate the land, and on and on. To carry out these projects, the Bank had to create the laws, regulations and institutions with the power to decide how to use a nation’s resources, undercutting the myriad traditional legal and political systems that have evolved over centuries to govern resource use accountably and sustainably. Then the Bank followed up by lending hundreds of billions of public dollars to carry out the projects. Moral hazard was rife and these investments undermined the Third World’s economies and environments. Without market discipline and public oversight, World Bank projects also became important vehicles for corruption. Environmental assessments and feasibility studies were never serious attempts to evaluate projects, but mere steps to justify them.
Now I shouldn’t single out the World Bank. Virtually all of the international aid and export credit agencies that have been in the business of transferring billions of dollars, state to state, for resource development have similarly financed governments against their people. I would shut them down too.
And I don’t want to single out international finance as the sole cause of the world’s environmental problems. Rather, I want to highlight the conditions that have allowed the World Bank to sponsor environmental destruction as the same conditions that have caused other environmental problems in the world.
When polluters and environmental destroyers have the power to externalize environmental costs onto others, to violate the property rights of citizens to their air, their water, and their land, to be indemnified against legal action by their victims, to secure subsidies against the real costs of their activities, to force consumers to purchase their products rather than a cleaner competitors’ product, and to place themselves above the law, and beyond the ballot box, environmental destruction is sure to follow.
The solution is,instead, to invest power in the people. Give citizens the right to know, the legal and political tools, and the security to hold those who would harm their environment accountable – legally,politically and financially – and the world will start to see a dramatic turnaround in the dismal state of the global environment.
China is a terrific example of how profound this force could be. Many look at China’s 1.3 billion citizens and see them as the world’s largest threat to the global environment. I don’t see them that way. I see the Chinese government as the largest threat because it has so thoroughly externalized environmental and economic costs, giving a favored few every incentive to destroy the environment while denying its citizens the tools to check it. But the Chinese citizenry is the world’s largest group of front-line defenders of the environment. Remember, for the global environmental threats that concern us all, there will be local victims who feel the consequences first and most painfully. Give them the right to know, and give them the legal and political tools, and the security to exercise their rights to hold accountable those who would destroy their environment, and the global environment will be well protected and the global economy will thrive.
Categories: Three Gorges Probe