It’s economic freedom that will save the earth.
Apart from health care, no other big government policies and
actions are more intrusive and economically distortionary than environmental regulations.
Rather than relying on civil society, free markets, and a free
press to ensure environmental quality and safeguards, a myriad bureaucrats and
agencies in governments and international organizations around the world have
created massive command-and-control mechanisms to micromanage behavior in ways
they regard as environmentally sound.
Some governments proposed programs to tax carbon emissions and
increase taxes on gasoline. Others set up nontransparent, economically harmful
exchanges and marketplaces for buying and selling carbon emissions. Still
others created subsidies for “clean” energy.
Such policies, even if occasionally effective in their immediate
goals, can impose huge direct and indirect costs on society, not least by
retarding rates of economic growth.
There is a better way.
The Heritage Foundation’s annual Index of Economic Freedom strongly
suggests that this command-and-control approach to “going green” is
For over two decades, the index has measured economic freedom in countries worldwide. Our historical evidence and volumes of supportive social science research demonstrate that economic freedom is good not only for individual economic advancement, but for the progressive values and public goods that many seek for society as a whole.
It’s simply better to live in a free society. Higher levels of
economic freedom lead to higher living standards and healthier human
development. Greater economic freedom provides more choices and improves the
quality of life by opening opportunities and promoting innovation.
Not so sparingly, as shown in the chart below, the same
free-market principles that have proven to be the key to economic success also can
deliver environmental success and point the way to an approach that advances
Economic freedom safeguards the environment by reinforcing
environmental stewardship. Countries with greater economic freedom tend to fare
better on protecting the environment than countries that have more intrusive environmental
Indeed, around the globe, economic freedom has been shown to
increase the capacity for environmentally friendly innovation. The positive
link between economic freedom and higher levels of innovation ensures greater
capacity to cope with environmental challenges.
The most remarkable improvements in clean energy use and energy
efficiency over the past decades occurred not as a result of government
regulation but because of advances in economic freedom that enhanced regulatory
efficiency and market openness facilitated by greater degrees of dynamic trade.
The regulatory power of the marketplace, generally ignored and
certainly underappreciated by advocates of big government, pushes ?rms to
identify ever more efficient means of production and respond to consumer
demands for environmental cleanliness and sustainability.
The end result is a virtuous cycle of investment, innovation
(including in greener technologies), and dynamic economic growth.
The liberating character of economic freedom has proven over and
over, in countries around the world, to empower people, create positive forces
of opportunity and innovation, and nourish overall well-being–including
through a cleaner environment.
So let’s celebrate Earth Day with a renewed
commitment to economic freedom.