A Policy Framework for Environmental Stewardship
Last week we examined the seventh principle in biblical environmental stewardship: that although cost-benefit analysis is an important tool to determine the wise use of resources, cost-benefit analysis cannot be completely comprehensive. Today wraps up this article series by drawing upon biblical principles from economics and politics to sketch out a general policy framework for dealing with environmental problems.
A Policy Framework for Environmental Stewardship
Environmental issues often result from the tragedy of the commons
Many environmental issues arise from a classic economic problem, the tragedy of the commons.[i] The tragedy of the commons occurs when people overexploit a specific resource because no single person holds the property rights – the incentive to exercise stewardship – over that resource. Economic markets – the free exchange of scarce goods and services – are predicated on private property rights. Clearly defined property rights are also indispensable to the proper stewardship of property and goods. The tragedy of the commons is exacerbated by externalities, the impact of someone’s actions on other people.
For example, in a public pasture in which no one has a property right to the pasture or a personal incentive to exercise stewardship, a shepherd will be tempted to allow his sheep to eat up all the good grass before another shepherd’s sheep eats the grass. Since no one can personally exercise stewardship over the public pasture and because the actions of each shepherd affect the rest of the community, all the grass is quickly eaten, and everyone suffers from the end result: a destroyed pasture.[ii]
This tragedy of the commons lies behind many environmental problems. For example, no single person, business, or government owns the atmosphere above them, the water that flows in the river beside them, or the animals that occasionally enter their yard. Because no one person bears the full consequences of an atmosphere filled with smog, a river filled with sewage, or an extinct animal population, each person lives their daily lives without experiencing all the consequences their actions have on others.
The preferred solutions to environmental issues are market-based policies – over command-and-control policies – that strengthen property rights and minimally impair human liberty.
Policy proposals to address environmental issues generally fall into one of two categories: market-based policies that leverage the laws of supply and demand to affect change (e.g. monetary incentives, taxes, or tradeable permits) or command-and-control policies that rely on direct prohibitions to affect change (e.g. regulations, bans, and licenses). Policymakers should give first consideration to market-based policies over command-and-control policies to solve environmental issues because they best address the underlying economic problems and they also respect two important concepts in the Christian worldview: private property and human liberty.[iii] Scripture implicitly supports private property rights over common ownership.[iv] Scripture also emphasizes the importance of human liberty to serve God as He has commanded and the corresponding limitations of the state.[v]
For example, when a natural resource like a local fish population is owned collectively or by no one in particular, each recreational and commercial fisherman may catch as many fish as they want as fast as they can. Why leave some fish to repopulate if the next fisherman might just scoop them up instead of you? Under these conditions, fishermen will eventually deplete the stock of fish because no one has ownership of the entire fish population. However, if conservationists estimate how many fish can be caught per year while keeping the population of fish stable, the local government assigns fishermen the right to catch a specified number of fish, and the fishermen are allowed to trade these fishing rights, then property rights can be established and a market can be created.[vi] This approach allowed Iceland to avoid the depletion of its fish stocks,[vii] a tragedy that befell the Atlantic cod fisheries. Such a policy approach would be preferable to a command-and-control approach that would forbid anyone from fishing or only allowing a particular group of people to fish.
Another example of a market-based solution is to tax the production of a pollutant,[viii] as Sweden did on nitrous oxide, a pollutant that contributes to acid rain.[ix] Such a tax increases the cost of the pollution to the producer – the private cost – to more closely match the pollution’s impact on everyone else – the societal cost (e.g. internalizing an externality). This approach also leverages the economic law of supply and demand to reduce the amount of emissions produced.
The seven principles laid out in the past few weeks outline what we believe to be a faithful Christian understanding of environmental stewardship that is fundamentally different from a secular understanding of the environment. Christian environmental stewardship recognizes that the environment is the creation of God and properly understands the responsibility of humanity, as the image-bearers of God, to exercise stewardship over the resilient yet fragile environment. Although humanity should carefully consider the consequences of their actions, Christians understand that God – not man – controls the end of the world. Taken together and joined to an overarching preference for market-based policies, these principles are pieces of a more comprehensive commitment to exercise responsible stewardship over the rest of creation.
[i] Calvin Beisner et al., “A Biblical Perspective on Environmental Stewardship,” 100–108.
[ii] Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action, The Political Economy of Institutions and Decisions (Cambridge ; New York: Cambridge University Press, 1990).
[iii] Calvin Beisner et al., “A Biblical Perspective on Environmental Stewardship,” 100–109; Wayne Grudem, Politics According to the Bible, 262–68; 91–96; Cornelis Van Dam, God and Government, 190.
[iv] Wayne Grudem, Politics According to the Bible, 261–68; Rodney Stark, The Victory of Reason: How Christianity Led to Freedom, Capitalism, and Western Success.; see also ARPA’s Core Principle on Private Property
[v] Rodney Stark, The Victory of Reason: How Christianity Led to Freedom, Capitalism, and Western Success; Cornelis Van Dam, God and Government, 12–17; Wayne Grudem, Politics According to the Bible, 91–96; see also ARPA’s forthcoming Foundations Document: Freedom and Liberty
[vi] J. Michael Beers et al., “The Catholic Church and Stewardship of Creation,” 59.
[vii] OECD, “Sustaining Iceland’s Fisheries through Tradeable Quotas,” OECD Environmental Policy Paper No. 9, 2017.
[viii] Of course, there may be disagreement within the academic community or popular opinion about which substances are harmful pollutants, which are benign chemicals, and which are beneficial by-products. The purpose of this paper is not to delineate which by-products (e.g. carbon dioxide or manure or forestry by-products) fall into which category, but to illustrate how substances that are generally agreed to be harmful pollutants should be reduced through public policy.
[ix] OECD, “The Swedish Tax on Nitrogen Oxide Emissions,” OECD Environmental Policy Paper No. 2, December 2013.