Economic Improvements lead to Environmental Improvements

Earth Day was founded in 1970 to create "an environment of decency, quality, and mutual respect for all human creatures and all living things." [1] In many ways the United States has achieved those goals, but we have a long way to go to elevate all of humanity. Fortunately, economically elevating humans leads to environmental improvements.

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One good example of economic and environmental improvements is America's air quality success. Despite claims to the contrary, air quality in the United States is improving, even as our economy, automobile use, population, and energy consumption have grown. This is an untold success story. The graphic below from the Environmental Protection Agency demonstrates the success of our clean air efforts: It just wasn't Earth Day, the creation of the Environmental Protection Agency, or the passage of the Clean Air Act that created these air quality improvements. Air quality improved for decades even before Congress passed the Clean Air Act Amendments of 1970.[2] The reason the environment improved is simple: when people become wealthier, we can more easily afford cleaner water and air.[3] When the industrial revolution started in America, environmental quality first decreased. However, as wealth increased, it quickly improved, even beyond previous levels. As the graph above shows, greater wealth leading to greater environmental quality has continued. Research on environmental quality and wealth implies that we will overcome our environmental issues only if we increase our wealth and technology. [4] Government programs were not responsible for the great strides we have made in shifting to cleaner energy sources. For example, the discovery and use of oil helped end the slaughter of whales for whale oil. A century ago, our streets were littered with horse manure. Today our streets are manure-free not because of improved street cleaners, but because people stopped using horses and started using electric-powered street cars, diesel powered buses, and gasoline powered cars. The reason we switched our major energy sources from biomass-fueled horses and whales is because we developed alternatives that made economic sense. Sadly, governments fail to understand that key fact-people will switch to alternative energy sources only when they make economic sense. Instead of relying on Americans to make the best choices about which energy sources make the most sense, the federal government has been trying for years to try to make politically-connected energy sources like wind, solar, and ethanol cost-effective. So far these government programs have failed. Even after decades of subsidies, the New York Times recently reported that "wind power is currently more than 50 percent more expensive than power generated from a traditional coal plant" [5] and Energy Secretary Stephen Chu told the New York Times that solar technology would have to get five times better to be competitive in today's energy market.[6] Because wind and solar are not cost-competitive, they contribute only a small amount of electricity. In 2008, wind produced 1.3% of the electrical generation in America and solar produced a meager 0.02%.[7] The federal government provides generous subsidies, tariffs, and even a requirement that the U.S. use a percentage of biofuel, and still biofuel companies struggle to survive. Not only are biofuel companies finding it difficult to stay in business, it turns out that recent science shows that biofuels might not reduce greenhouse gas emissions. On Earth Day, as we look to the future, we should remember what has worked thus far-wealth creates the conditions that lead to environmental improvements. Politicians shouldn't tell us which energy sources we can or can't use. History shows that people should be free to use what makes sense. New York Times columnist John Tierney makes the same point like this:

1. There will be no green revolution in energy or anything else. No leader or law or treaty will radically change the energy sources for people and industries in the United States or other countries. No recession or depression will make a lasting change in consumers' passions to use energy, make money and buy new technology - and that, believe it or not, is good news, because...
2. The richer everyone gets, the greener the planet will be in the long run.

On Earth Day and every day we ought to remember that economic improvements lead to environmental improvements. [1] Quote from former Sen. Gaylord Nelson. [2] See Joel M. Schwartz & Steven F. Hayward, Air Quality in America p. 13–38 (2007). [3] See Bruce Yandle et al, Environmental Kuznets Curves, A Review of Findings, Methods, and Policy Implications, PERC Research Study 02-1 (April 2004), [4] See Bruce Yandle et al, Environmental Kuznets Curves, A Review of Findings, Methods, and Policy Implications, PERC Research Study 02-1 (April 2004) [5] Matthew Wald, "Cost Works Against Alternative and Renewable Energy Sources in Time of Recession," New York Times, March 29, 2009 [6] John Broder and Matthew Wald, "Big Science Role Is Seen in Global Warming Cure," New York Times, February 11, 2009 [7] Energy Information Administration, Net Generation by Energy Source: Total (All Sectors), Mar. 24, 2009 Energy Information Administration, Net Generation by Other Renewables: Total (All Sectors), Mar. 24, 2009,