Environmentalism and economics must co-exist

OPINION:

It’s easy to say that we can’t put a price tag on a clean environment. But beyond this noble sentiment is a simple reality that radical “greens” prefer to ignore: Like any other area of policy, nurturing the world around us involves choices based on time, effort and, yes, money.

Take the case of a new study which examines potential links between natural gas development in Pennsylvania and the prevalence of asthma. Several news outlets jumped on the findings as evidence that “fracking” is hazardous (egged on by one of the study’s researchers, who just happens to be a research fellow at the agenda-driven Post Carbon Group). The actual abstract of the findings was more cautious in concluding: “Whether these associations are causal awaits further investigation, including more detailed exposure assessment.”

We are not scientists, and so we will await further research. Yet some would say, why bother? Just ban fracking now to be on the safe side. The trouble is, the “safe side” carries its own risks. For one, it is clear that fracking can deliver improvements to the economy, which provide people with more resources for their own health care — and environmental stewardship. Even while noting the need for further environmental impact research, a study by the center-left Brookings Institution found that the abundance of fracking-produced energy sources has saved businesses and individuals $74 billion annually on their utility bills ($200 per year per individual household).

Governments experience a windfall too, allowing them the budgetary breathing room for more public health programs and environmental clean-up efforts. Economic activity — from job creation, investment and even retail sales — translates into higher tax collections. According to a National Bureau of Economic Research analysis from last year, “most county and municipal governments have experienced net financial benefits” from hi-tech oil and gas development.

In addition, earlier this year the U.S. Energy Information Administration reported that carbon emissions from power plants have hit a near-25-year low, with the conversion of many facilities to natural gas playing a major role.

To most people, these findings should mean a rational regulatory approach to fracking, not a headlong rush into bans. Sensible pro-environment Democratic governors like John Hickenlooper of Colorado and Jerry Brown of California would agree.

A similar debate has arisen in North Carolina, where the issue is coal ash, a byproduct of coal-burning power plants. There the Southern Environmental Law Center attempted to hand-feed a partial deposition of controversial toxicologist Kenneth Rudo to the media before he could be cross-examined. At question was whether a North Carolina coal ash spill by Duke Energy had tainted drinking water near several storage sites. It was on Mr. Rudo’s recommendation that state regulators sent do-not-drink letters to residents near the sites. As it turns out, the water quality met federal safety guidelines and was nearly identical to municipal water qualities sampled throughout the state, prompting embarrassed regulators to rescind the order.

There’s a connection here to another important lesson in environmental economics. As an expert witness in a Maryland case, Mr. Rudo testified that MTBE, an organic compound used to make gasoline cleaner-burning, was a “probable human carcinogen.” MTBE was originally touted as an environmentally friendly way of reducing pollution levels. Throughout the 2000s, however, legal battles raged over MTBE contamination of groundwater, prompting an environmentalist backlash.

Worse than this backlash was the next “cleaner” fuel: blending gasoline with ethanol. Thanks to direct taxpayer subsidies, loans, usage mandates, and other policies at every level of government, ethanol (primarily made from corn) is a tremendous drain on the economy. Consumers suffer not only at the pump due to the lower mileage from ethanol blends, they also pay more for food because of ethanol’s voracious appetite for corn crops. And in the greatest irony of all, many environmental groups oppose the ethanol scheme because of the damage the crops pose to the ecology.

This sad history might make merely interesting reading if it weren’t at risk of repeating itself. North Carolina energy consumers face billions of dollars in costs passed along to them for removing all the coal ash pits if the Southern Environmental Law Center gets its way and smarter approaches are discarded. In addition, taxpayers could be on the hook for higher infrastructure costs (or budget shifts away from health and other environmental programs) caused by trucks hauling ash to new sites across the state.

In the rarefied atmosphere of a radical pressure group, all-or-nothing approaches might be the norm. But in the real world, peoples’ lives and livelihoods must be balanced — whether in Pennsylvania, North Carolina or halfway around the world.

• Pete Sepp is president of the National Taxpayers Union.