This Earth Day, President Joe Biden is convening a 40-country virtual climate change summit. As with the first Earth Day in 1970, a watershed moment that paved the way for fundamental environmental laws still with us today, we may see a coalition of environmentalists and industrialists come together. If so, let’s hope they produce the right policies.
In 1970, worries about water and air quality motivated the movement. Today, it’s largely climate change, carbon emissions, and rising sea levels. Back then, mounting a federal effort was the challenge. Today, the issue is global, which means getting world governments to agree on one thing.
But note this. In 1970, "bootleggers and Baptists," or those in it for the money and those taking moral stances, played a significant role in bringing about national laws. This principle imagines a "dry" town where Baptists morally oppose drinking, while bootleggers support liquor regulations that boost the market for their product.
Prior to 1970, strong state common-law protection meant harsh penalties against firms found to have harmed citizens, and business and state governments began to push to form more predictable regional compacts that would extend the protection of environmental rights beyond state boundaries. Industrialists and environmentalists came together. Unfortunately, they emphasized the types of command-and-control regulations that have become synonymous with environmental policy, instead of strengthening common law or setting simple, tangible benchmarks for firms to meet through efficiency or innovation. Though far more costly, command and control delivered what they wanted: output restrictions and higher profits for major industrial firms and federal enforcement for environmentalists.
We could see a bootlegger-Baptist reunion in 2021. Today’s Baptists — major environmental organizations and political liberals including Biden — are unrelenting in their efforts to embrace and achieve zero carbon electricity by 2035 and overall zero carbon emissions by 2050. Playing the bootlegger role, a coalition of industrialists supports specific ways to bring down carbon emission. Included are major electricity producers, energy companies, and even the American Petroleum Institute, which calls for programs that would include carbon pricing in place of more command-and-control regulation. The U.S. Chamber of Commerce has made a similar pitch, perhaps including a $40-per-ton carbon tax.
The harmony of voices is at least partly driven by cheaper natural gas displacing coal in producing electricity, rapidly falling solar cell costs, the recognition that electricity will be the dominant fuel for transportation and heating, and growing pressure from environmentally sensitive investors. While sounding at times like our Baptists, industrialists seem to share some bootlegger moneymaking objectives.
As for the prospects of deliverable climate change commitments, let’s keep a few things in mind:
First, national governments may pass statutes, but setting global goals as far away as 2050 is problematic, to say the least. Many of the current leading players will be dead, and most will be retired, by then. National leaders come and go, and there can be no meaningful accountability if political forces change and this flavor of Baptism loses popularity. At the same time, financial market accountability will be operating, and investors worldwide are avoiding polluters and rewarding green firms. That’s partly why 2035 is another kettle of fish, at least for the United States. Just 14 years away, many of today’s industrial, political, and environmental leaders will still be around.
This suggests that parts of the Earth Day 2021 agenda may gain traction.
People who produce and distribute electricity best keep their seat belts fastened. The rest of us had best hope that, unlike what happened after the first Earth Day, a low-cost, pro-innovation path for achieving climate change control will be chosen.
Bruce Yandle is a contributor to the Washington Examiner's Beltway Confidential blog. He is a distinguished adjunct fellow with the Mercatus Center at George Mason University and a dean emeritus of the Clemson University College of Business and Behavioral Science. He developed the "bootleggers and Baptists" political model.
