By
Jessica Lee
Good news! Over 5,000 students enrolled in the UA Eller College of Business and Administration. While students within the College of Science are researching the chemical and physical properties and implications of pollution, the business students are learning how to run a firm with financial goals.
As we proceed into the 21st century, environmental policy needs to shift toward a more business-style approach.
(This is where the business students applaud.)
While the 19th century gave the world the Industrial Revolution, the 20th century gave us the understanding of the environmental and health consequences of mass production and consumption - yet we still haven't quite mastered the policy structure to promote environmental protection.
Currently, the prominent environmental policy in the United States is the command-and-control type. In fact, these existing regulations fill 14,310 pages of the Code of Federal Regulations. These traditional regulations emphasize a technical or legal-based approach. How about using money instead as an incentive for businesses to adapt a more environment-friendly production strategy?
Money is what makes sense in the business college. And businesses are a main source of pollution.
It is not a new idea. The introduction of market mechanisms has been used in limited arenas in the last 20 years with grand success- both financially and environmentally. We need to see that the integration of regulations which encourage appropriate environmental behavior through signals in price gives industry an incentive to be consciously green. Now, it is up to the EPA to stalk the economy with explicit instruction and lawsuits. Market-based methods can also assist in balancing local environmental protection of the land with regional economic growth.
One market-based instrument is the system of tradable permits. Under this system, policymakers first get together to set a ceiling limit on the amount of pollution allowed for an industry or region. Those companies that participate in those particular pollution emissions then receive permits (either through auction or free apportionment) that grant them a share of the total permissible amount of pollution. If those firms, through technical innovation or management styles, keep their emissions below their allotted amounts, they then have the freedom to sell their emission surplus to other participating firms for profit.
Likewise, if a firm uses up its permits, it has the opportunity to buy excess to avoid legal penalties.
This policy integrates a company's financial incentives with environmental aspirations. The clockwork of the United States ticks to an economic beat. If capitalism dominates the scene, why not guide environmental protection policy by an Adam Smith-esque "green invisible hand."
Americans could then get more environmental conservation for their buck.
Of course, this is a utilitarian idea - the attempt to put a dollar price on aspects of the natural environment. It stresses the consequences of polluting through an industry's bank account. Most businesses do not claim that they should adapt their market practices to a greener approach because they "ought" to. Environmentalists would love it if everyone fulfilled their duties in preserving nature.
Unfortunately, we do not believe in a moralistic and socialistic environmentally friendly society. And now, many are realizing that the traditional command-and-control approach to policymaking is counterproductive in elevating environmental responsibilities. More than $140 billion is spent yearly by the government on pollution cleanup and control. Our nation's policymakers need to be more cost-conscious as to how the dollar bill drives our priorities.
This approach must be taken seriously. Dubya now insists that many faults within the economy are due to rigorous environmental regulations. Instead of demoting those restrictions, how about shifting the policy mentality to favor conservation through capitalism?
Let's give our support to those graduating with a degree in business. Give them the flexibility to adapt greener and cost-saving strategies within the productions that give Americans the lifestyle they demand.
