The Natural Wealth of Nations: Harnessing the Market for the Environment by David Roodman.

3/5 rating. 246 pages.

Book #30 of 2022. Read July 11, 2022.

This book talks about how we can use the market to help the environment.

While a large portion of people who are extremely market-focused seem to discount the environment, David does a good job of laying out the problems with the current status quo and its impact on the environment. We have a large amount of subsidies going to exploitative and harmful companies, while we hamstring progress in new and promising technology.

David talks about resource, cash, and infrastructure subsidies and the places where each of these are failing us. I enjoyed his even-handed discussion on each of these areas. He explains his reasoning why many of these are not succeeding in their intended purpose. Either because they are out-moded, or are hiding the true costs behind some very polluting portions of the economy.

David’s big idea is to use the market to make the polluter pay – using cap and trade, or other taxes. This would be able to shift a good deal of the taxes that currently penalize work or ingenuity – think payroll taxes – towards charging for areas that destroy the environment or shift us away from human capital.

While the book had some good ideas, it definitely was NOT the most interesting book (I know, shocker!) Just know that the market, if controlled in the right way, could actually make a larger impact on helping the environment than our current system, all while shifting taxes in ways that would spur ingenuity and penalize waste.

Quotes:

“Unlike today’s essentially throwaway economy, a sustainable economy will recycle materials the way a healthy ecosystem does, draw everything from renewable sources, and use all its resources much more efficiently.”

“But as a rough estimate, eliminating 90 percent of the subsidies and phasing in full taxes on the use and abuse of nature could raise $2.4 trillion annually, enough to cut conventional taxes by a third – enough, in other words, to eliminate the income tax in many countries, or the sales tax, or the payroll tax.”

“The Forest Service, [Randal O’Toole] points out, would rank among the top five U.S. corporations in terms of assets. Going by revenues, it would at least make the Fortune 500. But based on net income, it can only be classified as bankrupt. In effect, the general taxpayer is paying timber companies to raze public forests.”

“Overall, the cost of ‘protecting’ a mining job with tonnage-based subsidies rose from a generous $21,700 a year to a lavish $85,800. It would be cheaper now to shut down the mines and pay miners a handsome salary not to work.”

“A pair of rails can carry as many passengers as 16 highway lanes while generating 60 percent less air-polluting nitrogen oxide and almost no carbon monoxide or particulates.”

“Pittsburgh, Pennsylvania, is another prominent land tax experimenter. It increased the land portion of its property tax in 1979 and 1980 as part of a policy package meant to launch a renaissance of commercial development in the city’s core. During the 1980s the rate of new construction in central Pittsburgh exceeded that of the previous 20 years by 70 percent.”

“It is hard to prove that checks buy legislators’ votes. But people would not give the money, and in such strategic ways, if they did not think it worthwhile.”

#environment #taxes #subsidies #economy #economics #wealth #nature #bookreview

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