a1 Economics, University of Tennessee at Chattanooga
a2 Economics, Cox School of Business, Southern Methodist University
This paper considers prevailing environmental policy in the United States with the emphasis on liberty, markets, utilizing information, entrepreneurial discovery, and the economic analysis of political decisions (public choice). The general discussion is illustrated by the concern over global warming and policies for addressing this concern. The political incentives to confront environmental problems directly with mandates, restrictions, and subsidies ignore the power of liberty and market incentives to solve problems by fostering an impressive network of information transfer, increasing innovation, and expanding prosperity. Indeed, most environmental policies systematically suppress liberty, censor the communication of information, and retard innovation and prosperity, with the result that they provide less environmental quality at greater cost than is possible. While such flawed policies might be justified in cases where pollution problems pose clear, serious, and immediate threats, we argue this is not true of global warming, and the most effective response to concerns over carbon emissions may be limiting the discretionary power of government to take direct action and rely on the indirect effects of liberty and market incentives to move us beyond the petroleum age more quickly and efficiently than will result from the direct action of government.
J. R. Clark is Probasco Chair of Free Enterprise at the University of Tennessee at Chattanooga. He earned a Ph.D. in economics from Virginia Polytechnic Institute. He is the author or coauthor of six books and numerous academic articles, and was previously a research fellow at Princeton University and a distinguished visiting scholar at Moscow State University in Russia. He is a past president of the Association of Private Enterprise Education and currently serves as secretary/treasurer for both the Southern Economic Association and the Association of Private Enterprise Education. His research has ranged from traditional public finance and public choice topics to public policy in the areas of prison sentencing, education, taxation, regulation, welfare, and environmental policy.
Dwight R. Lee is William J. O'Neil Professor of Global Markets and Freedom at Southern Methodist University in Dallas. He has held full-time tenured faculty appointments at the University of Colorado, Virginia Tech University, George Mason University, and the University of Georgia, where he was Ramsey Professor of Economics and Private Enterprise from 1985 to 2008. He received his Ph.D from the University of California, San Diego, in 1972. His research has covered a variety of areas, including the economics of the environment and natural resources, the economics of political decision-making, public finance, law and economics, and labor economics. He has published more than 130 articles in academic journals and has coauthored eleven books. He was president of the Association of Private Enterprise Education from 1994 to 1995 and president of the Southern Economic Association from 1997 to 1998.