Climate Change Is Best Countered by Economic Freedom

COMMENTARY Environment

Climate Change Is Best Countered by Economic Freedom

Nov 19th, 2021 2 min read
COMMENTARY BY
Anthony B. Kim

Research Fellow and Editor of the Index of Economic Freedom

Anthony B. Kim researches international economic issues at The Heritage Foundation, with a focus on economic freedom and free trade.
Policymakers should pursue pragmatic policies to drive innovation and advances in environmental protection. Pramote Polyamate / Getty Images

Key Takeaways

Greta Thunberg summed the U.N.’s conference on climate change, calling it “a failure” that amounted to nothing more than “a P.R. event,” a festival of “empty words.”

Countries with greater economic freedom tend to fare better on protecting the environment than countries with more government-directed economies.

The positive link between economic freedom and higher levels of innovation ensures greater capacity to cope with environmental challenges.

Kudos to Greta Thunberg. The teenaged activist neatly summed up COP 26, the U.N.’s recently concluded conference on climate change, calling it “a failure” that amounted to nothing more than “a P.R. event,” a festival of “empty words.”

Of course, that’s all it ever could have been. Like the two-dozen international climate “summits” before it, it was predicated on the wholly fanciful notion that over 190 countries can hash out—and then live up to—a pact that requires them to abandon vital national interests and, in many cases, consign their citizenry to a sharply reduced standard of living, all in the hope that everyone else will do the same.

>>> Free Trade and Clean Energy Go Together

Small wonder that these conferences have yet to produce anything of substance. They have succeeded only in becoming a major distraction that drains time, effort, and resources from smaller-bore initiatives that actually can address billions of peoples’ immediate need for clean air, clean water, and access to energy.

Instead of chasing fawning headlines and applause on the international stage, policymakers should pursue pragmatic policies to drive innovation and advances in environmental protection.

The best way to do that is to preserve and advance economic freedom. Studies show that economic freedom not only produces greater prosperity but it also reinforces environmental stewardship. Countries with greater economic freedom tend to fare better on protecting the environment than countries with more government-directed economies.

Over the last few decades, the most remarkable improvements in clean energy use and energy efficiency have not arisen due to government command and control. Rather, these advances have blossomed due to deregulation, open markets and greater degrees of dynamic trade.

As the World Trade Organization notes, “trade openness can help efforts to mitigate and adapt to climate change, for example by promoting an efficient allocation of the world’s resources (including natural resources), raising standards of living (and hence the demand for better environmental quality) and improving access to environmental goods and services.”

This may surprise many climate activists, but free trade and affordable, reliable, clean energy go together.
 
Indeed, around the globe, economic freedom reinforced by freer trade has been shown to increase the capacity for environmentally-friendly innovation. The positive link between economic freedom and higher levels of innovation ensures greater capacity to cope with environmental challenges.

This interplay of economic freedom and free trade creates a virtuous cycle of investment, innovation (including greener technologies) and more dynamic, inclusive economic growth.

Clearly, policymakers trying to craft practical solutions to climate problems shouldn’t ignore free markets. Dynamic private markets incentivize efficiency by rewarding and empowering innovators and their investors for coming up with better ways to achieve more with less.

>>> America’s Aim in Indo-Pacific Should Be to Advance Economic Freedom

At the Climate & Freedom Symposium 2021, Dr. Liam Fox, a leading member of the British Parliament, offered this timely reminder: “In our current political discourse, the so-called ‘progressives’ (in a truly Orwellian twist) want us to regress to the failed collectivist policies of the past or, worse, to a ‘degrowth agenda,’ rolling back the economic achievements that have helped us take billions out of poverty in only one generation, one of the greatest achievements in human history….The leaders of the free, democratic and capitalist world must recommit themselves to the principles that produced the innovation and scientific advance that has been our hallmark–an agenda based on creativity empowered by the free market.”

Indeed, economic freedom, not government dictate, is the surest and the best path forward. It is a tried and true way to make the world freer, healthier, and cleaner.

This piece originally appeared in The Washington Times