Free Market Will Save the Planet if We Even the Playing Field

Last month Rolling Stone magazine featured Live Earth with stories about the performers and articles about our environment. One of the articles was written by Robert F. Kennedy Jr. discusses how the free market can save our environment by promoting efficiency.

Here is part of the article...

Our last, best hope to stop climate change is the free market itself. There is gold in going green, and the same drive to make a buck that created global warming in the first place can now be harnessed to slow the carbon-based pollution that is overheating the planet.

And green investment will not just enrich a few corporations. We know from past experience that it will strengthen America's economy, not to mention our national security, our economic independence and the effectiveness of our world leadership. During the oil crisis sparked by OPEC in the 1970s, American business and government went into overdrive to promote conservation and develop alternatives to Middle Eastern oil.

Between 1977 and 1985, Detroit boosted the fuel efficiency of its automobiles from eighteen to 27.5 miles per gallon. Oil use shrank by seventeen percent while the economy grew by twenty-seven percent. Even more important, oil imports from the Persian Gulf plunged by eighty-seven percent, breaking the cartel's power over America's economy. Had we stayed the course, we would not have needed to import a single drop of oil from the Middle East after 1986 achieving true energy independence that, in all likelihood, would have enabled us to avoid the devastating attacks of September 11th, as well as both Gulf wars.

Kennedy adds...

The global climate crisis is the result not of an orderly free market, but of a distorted market run amok. A truly free market is the planet's best friend. Free markets promote efficiency. "Efficiency," after all, means the elimination of waste and pollution is waste. The pollution that is catastrophically heating the Earth is the result of market failure; the incapacity of a poorly designed marketplace to place a proper value on an essential asset the atmosphere. That market failure has brought us to the brink of a planet wide environmental collapse.

Kennedy then outlines all of the hidden costs the oil and coal industries receive and concludes (emphasis added)...

If all the hidden costs that Americans currently pay for oil were reflected in the price at the pump, gasoline would cost more than $13 a gallon. In short, taxpayers and consumers are essentially giving the oil industry a subsidy of $10 for every gallon of gas sold in America. If we simply eliminated those subsidies and created a truly free market, renewable sources of energy would beat oil ? as well as nuclear power and coal, which receive equally grotesque subsidies. It is only through these giant subsidies that gasoline has a prayer of competing with alternative sources such as biofuels and wind, which produce energy far more cleanly and efficiently, at far less cost.