OPINION: Profit-making is good for the environment

In what has now become an annual ritual, today – Earth Day – will see a large number of environmental activists warning us of innumerable impending catastrophes ranging from the disappearance of forests to the increasingly deteriorating state of our air and water.

Yet, as the Danish statistician Bjørn Lomborg reminds us in his detailed book The Skeptical Environmentalist, the idea that the world is heading for ruin is based mostly on preconceptions, not hard facts. Actually, virtually all official statistics from the United Nations and other government sources show us that mankind’s and the environment’s lot have improved by practically every measurable indicators in recent decades and even centuries in some cases.

In the last few decades, energy and other natural resources have become more abundant, not less. More food per person is now produced than at any time in history. Most forms of environmental pollution either appear to have been exaggerated or are transient, meaning that they are associated with the early phases of industrialisation and therefore best cured not by restricting economic growth, but by accelerating it. In London, for instance, air pollution peaked about 1890, and the air there is cleaner today than it has been since the late 16th century.

So, if modern science and technology are killing us, why are we so healthy and living so long? Why is it that the average life expectancy was 21 years in the Stone Age, 30 years in the Roman Era and 47 years in the United States a century ago while today it is 65 years in underdeveloped economies and 77 years in advanced economies?

How did such progress happen? Some environmentalists who acknowledge these positive trends attribute these successes to tough environmental regulations. But the real answer lies more in businesses’ traditional search for increased profitability.

“People, not profit” is a recurring motto of many environmental activists who think the goals of economic growth and enhanced environmental quality have always been incompatible.

Oddly though, most past analysts of industrial development believed that pollution concerns were best addressed through constant efforts to make industrial operations more efficient. This was achieved through the reduction of the amount of material used as input and discharged as waste. They also saw the search for profits as the key to these processes. Greedy businessmen had every incentive to pass any unused portion through the economy instead of dumping it in the back yard or the river.

For instance, Charles Babbage noticed in his 1832 classic on the economy of machinery that one basic tenet of all competitive businesses is “the care which is taken to prevent the absolute waste of any part of the raw material.” By far the most important Victorian writer on waste recovery was the journalist Peter Lund Simmonds (1814-1897). First published in 1862 his massive (almost 500 pages) book Waste products and Undeveloped Substances documented the numerous profitable uses of waste such as bones, “injurious and even poisonous” gases which used to escape during the process of smelting, distillers’ wash, blood and old horse-shoe nails.

“In every manufacturing process,” Simmonds wrote, “there is more or less waste of the raw material, which it is the province of others following after the original manufacturer to collect and utilize. This is done now, more or less, in almost every manufacture.”

Why did Simmonds’ contemporaries behave that way? First and foremost because as “competition becomes sharper, manufacturers have to look more closely to those items which may make the slight difference between profit and loss, and convert useless products into those possessed of commercial value.”

In doing so, manufacturers simultaneously improved their environment. Among countless examples, Simmonds relates that a process had been developed at a woollen mill by which the refuse water of the washing houses was now converted into valuable commercial material.

While Simmonds might have authored the first treatise that systematically described the widespread recycling behaviour of all industries, his book would not be the last. In the following decades, many other lengthy books on the topic would again be written in the United Kingdom, the United States, Germany and France.

In all of these, authors went out of their way to argue that turning industrial waste into profitable by-products almost always made economic sense and that, as a by-product of such innovative behaviour, the state of the air, the rivers and the forests were usually improving.

Strange as it may seem to today’s environmentalists, the search for profits in industrial production has always been good for the environment. Good entrepreneurs, engineers and technicians have always been able to figure out on their own that pollution is wasteful and doesn’t make good business sense. What the world’s environment needs is more economic development, not less.

Pierre Desrochers is Research Director at the Montreal Economic Institute and author of the Economic Note entitled Comment la recherche du profit améliore la qualité de l’environnement.

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