An Op-Ed in the New York Times describes how the profit motive can be used to save endangered tigers. This idea is well-known among economists, but badly in need of publicity.
If activists and policy-makers can learn to work with markets rather than against them, we’ll have a bright future indeed.
A very good editorial in today’s Washington Post argues that it’s better for government to tax carbon than directly fund research into alternative fuels:
Investing in new technologies, about which Mr. Bush boasted, is worthy. But such investment is more likely to pay off if government creates incentives and then lets the market choose the most promising technologies; Mr. Bush apparently believes government can guess better. Meanwhile, the longer this country goes without action, the more difficult will be the reductions necessary to help prevent an environmental catastrophe.
I couldn’t agree more. In fact, this editorial is almost identical to a letter I wrote the the editor of the New York Times a few weeks ago. In case you were wondering, it wasn’t published. I might as well post it here, where I have a complete monopoly on content:
Your recent editorial “Let Them Go Green” was right to call for action from Washington, but the suggestion that loans, grants and tax breaks will make America a greener place ignores an unfortunate reality: governments are bad at picking winners.
Alternative fuel technologies are still in their infancy, making it unclear to even the most sober-minded observer which will prove economical in the near future. Worse still, when government hands out the dole, firms face a strong incentive to overstate the benefits of their technologies in hopes of a free lunch at taxpayer expense.
There is a much easier way. Congress should raise taxes on gasoline and create a market for pollution permits similar to the European Emissions Trading Scheme. For the good of the environment let markets decide which technologies to adopt, not misguided politicians.
Regards,
Francis DiTraglia
