The Consequences of Being Green

That’s the title of a guest post on the Freakonomics blog by Daniel Hamermesh, an economics professor at the University of Texas.

The Freakonomics blog is usually interesting, quirky, thought-provoking … all that good stuff. Unfortunately, Hamermesh’s post is poorly thought out and poorly argued exception. Here’s most of it:

The actor Ed Begley Jr. has a widely-circulated OpEd piece touting his eco-friendly activities, featuring a proud announcement that his exercise on his stationary bicycle generates the electricity he uses to toast two pieces of bread.

Now those two pieces give him 200 calories, but he burns at least 100 calories on the bike. So half of his eco-friendly exercise is lost because he needs to obtain additional food from elsewhere to maintain his weight — food whose growth and distribution have environmental consequences too, as does the manufacture of his bicycle.

This illustrates the general equilibrium difficulties of so many pro-environmental activities about which the rich and famous boast.

There should be a rule: before helping the environment in one market, we should be required to think through the impacts on other markets.

Hamermesh is attempting to pick on the extra food Begley needs if he exercises, and the environmental consequences of the manufacture of his exercise bike.

Here’s why that’s a bad idea:

1) Begley is going to exercise anyway. Only a fool would argue that we shouldn’t exercise because it has “environmental consequences.” Thus, the extra bread is a non-issue. And from my admitted environmental perspective, bread isn’t a bad thing to eat, compared to, say, the carbon footprint of hamburgers. Or for that matter, how many volatile organic compounds are emitted to cook them at a fast-food restaurant.

2) The environmental consequences of the manufacture of his exercise bike? Is he smoking crack? By hooking up his exerbike to make toast, he’s taking something used for one purpose (exercise) and making it twice as efficient (exercise + electricity generation).

3) If you’re going to count the environmental costs of manufacturing a bike, let’s note that you can make 100 bikes with the same amount of energy needed to make just one car. Also, if you’re going to count the bike’s “costs” as an energy-generation tool, it’s only fair to compare it to the way that energy currently is generated: think of all the energy and emissions resulting from the mining, transport and burning of coal … and then transmitting it through the nation’s power grid, where 66% of the energy is lost! (Speaking of poorly thought out, there’s a perfect example, non?)

4) Hamermesh: “There should be a rule: before helping the environment in one market, we should be required to think through the impacts on other markets.”

Before helping the environment, we should think through a decision’s market impacts? The environment has always been an economic externality, the part not factored into the equation while CEOs, presidents and economists have been unthinking slaves to Economic Growth. And now we’re seeing that come back to haunt us. So Mr. Hamermesh is flat-out wrong here. Putting the market first is what got us into this mess; we can hardly expect that same thinking to get us out of it.

Yes, we should think through the environmental consequences, and the economic ones. But we should do so by first taking economics and markets out of its privileged place at the top of the decision-making pecking order. Think of it this way:

“Market change” doesn’t threaten the lives of billions of beings on the earth. But that’s exactly what climate change does.

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