A Reconciliation of Goals

We may expect the debate between the proponents of growth and the proponents of preservation to evoke all the irrational arguments that have characterized the debate on the Supersonic Transport or the Alaska pipeline. But to say this is merely to suggest that progress toward a political reconciliation of these conflicting goals will follow the course of any social development. The nature of the reconciliation will depend on the political strength of the opposing forces.

To date, despite the growing numbers of the environmentalists, political forces have been heavily weighted in favor of the economic and technological interests concerned with growth. Furthermore, there has been exaggeration, even hysteria, in the claims of various environmentalists that has not been of service to their cause. What is badly needed is a sober appraisal by a reputable authority of what is known and not known about the environmental effects of economic activities and of the trade-offs in these activities between production and preservation. But, even if and when this is done, I suspect that we shall discover how little is known of the relevant facts.

I am not concerned here with such obvious lacunae as ignorance of whether we have more to fear from the "greenhouse effect" of excessive discharges of carbon dioxide than from the "iceberg effect" of discharges of particulates into the upper atmosphere. We are astonishingly ignorant about much smaller matters. Let me give you an example. The State of Massachusetts decreed that by October 1, 1970, the sulfur content of residual fuel oil, which had been running at about 2.5 percent, should be reduced to 1 percent. Consumers of fuel oil in the Boston area who had been paying $1.90 a barrel (admittedly an abnormally low price) found the price rising by stages to $4.30 a barrel. Obviously, the cost of sulfur removal was not the only factor involved, but it was important. The law also decreed that the permissible sulfur content should be reduced to 0.5 percent by October 1, 1971, and there have been suggestions that it be reduced to zero by 1975. Now, considering the fact that Boston is a seacoast city with prevailing westerly winds and that sulfur from fuel constitutes certainly less than 20 percent of the not very bothersome air pollution in the Boston area, one is entitled to doubt whether the benefit derived from this reduction of air pollution is worth the extra cost to fuel oil consumers. I do not know what the answer is, but I doubt very much whether the Massachusetts General Court did either.

The attainment of a sensible trade-off between growth and environmental preservation is currently hampered at every stage by ignorance—by lack of physical and chemical knowledge of the effects of various discharges on atmospheric changes or rates of change in water composition; by ignorance of the biological and entomological effects of various types and levels of pollution on human beings, plants, and animals; by ignorance because of the lack of market tests, of what valuation people put on an improvement or worsening of levels of various types of pollution; and by ignorance of certain economic considerations that could tell us something about how various pollution measures would affect relative prices, outputs, and employment in particular industries and the location of business enterprises. We grope, not in complete darkness, but in a rather dismal sort of gloom. As I have emphasized, reconciliation of diverse energy goals takes place through a political process. But the kind of reconciliation that could emerge in the present state of our ignorance might involve either irreparable damage to the environment or, on the other hand, a sacrifice of growth possibilities to unreasonable and unnecessary environmental precautions. The kind of reconciliations we must aim toward is one arrived at by a political process of decision making based on technical knowledge of what the trade-offs between growth and environmental protection really amount to. It would still be a political reconciliation but one having some hope of being influenced by fact and rational analysis.

Let me offer two final observations. There are those who maintain that an expansion of output and investment along customary lines is essential to the maintenance of a high level of employment. But there seems to be no reason to believe, at least without further investigation, that the employment-creating effects of restoring the environment will be any less than those involved in polluting the environment. Furthermore, they will have approximately the same effects on the rate of growth of GNP as it is conventionally measured. It is true we will not have as many final goods and services to consume. But those who take satisfaction in high GNP growth rates should have no cause for alarm.

There are also those who appear to believe that increasing concern for the environment would radically change the relationship between the public and private sectors of the economy. There might well be some change. But there would seem to be no reason to expect a large expansion of public ownership and control. Insofar as environmental considerations can be brought to bear by changes in the price system, private enterprise would continue to operate as it does now. No doubt legislative and administrative controls would frustrate certain courses of action. And in certain areas, it is possible that public-private collaboration of the type we are familiar with in space and defense activities would emerge. But, by and large, I see no reason why an economy in which growth and environmental protection are effectively reconciled would generate a relationship between public and private activities that would be drastically different from what we now have.