The Value of Environmental Protection

At the last climate conference in Copenhagen, the developed countries once again re-echoed the need for developing countries to be more environmentally responsible. There seem to be a convergence in the literature that global warming is real and it is being accelerated by human activities. It is therefore seems sensible that we make the right decisions to decrease our foot print on the environment. In any case, the environment supports our life systems on earth. However, one thing that most people, especially those in the developed world have failed to realize is that any sense of environmental quality is a luxury for many people in the developing world. I always tell my students and my colleagues that environmental quality should be seen as a higher need above the basic needs category in Maslow’s Hierarchy of Needs. It is only when you have been able to satisfy your basic needs (food, shelter, clothing) that environmental quality really becomes a need. For many in the developing world, the last thing they want to hear is any system that increases the cost of production now for the reason that we are safeguarding the environment for tomorrow. The experts will tell you that being poor is still no reason to be environmentally careless because environmental degradation will in the long run lead to more poverty. There is no dispute that environmental quality, in the long run is inextricably linked to economic development and poverty alleviation. But the issue is that in the long run those who do not have the ability to satisfy their basic needs will be dead. So what is the incentive now to protect the environment – NONE. It is therefore not surprising that in the developing world it is uncommon to see proper smoke belching factories. Western companies facing straighter environmental standards home quickly relocate to developing countries where they can pollute like they own the atmosphere. It is not that the developing country authorities do not care about the future cost (and sometimes immediate cost) of environmental pollution, but to them the most important bottom line is the reducing the double digit unemployment rate, raising more revenue to improve health care, water supply, increase agricultural yields etc. In any case, if one developing country were to put in place a straighter environmental regime, the companies will quickly relocate to where it is the cheapest to produce (often with less stringent environmental rules). Can you imagine telling your constituents that “eh eh the reason why the local company employing 20% of the labor force has relocated or closed is because they have a high carbon emission”. You will be gone in no time.

According to Gallup Poll Americans have always rated the environmental protection higher than the economic growth. However, for the first time in over 25 years, Americans in 2009 rated the economic growth higher than the environmental protection. The reason? - In 2008/9, Americans were told they were facing the worst depression since the 1930s. With the record bank failures, mortgage foreclosures and high unemployment rate, American saw their very basic needs being threatened. So, just like the people in the developing world, without the comfort of satisfying your basic needs, there is no real need to care for the environment.

Prior to the economy getting to the brink of collapse, it made sense for Americans to put environmental quality over economic growth. With an already strong economy, most people were able to satisfy their basic needs. Lower environmental standards threaten their existing lifestyles (which included the basic needs). Environmental protection therefore serves to preserve the ecosystem and hence their existing lifestyles. However, many in the developing world are now struggling to have a lifestyle and therefore places very little premium on the environment. Developing countries will only put a lot more emphasis on environmental quality if majority of the people are able to reach middle income level so that they will also feel a threat to their lifestyles by a degrading environment. The developed countries can sit down and wait for a middle class to emerge in the developing world or they can accelerate the process by offering more assistance to the developing countries to accelerate development and the emergence of a middle class in the developed world.