C3 Solutions report: Countries with freer economies more likely to have better environmental health


Countries with less intrusive governments and freer economies are significantly more likely to have better environmental health, according to a study released Tuesday that challenges President Biden‘s premise that more federal mandates and strict emissions targets are the solutions to climate change.

Economies that are “mostly free” based on factors such as property rights and tax burdens score about double on a widely cited environmental index compared to “mostly unfree” economies, according to the report released by C3 Solutions, an advocacy group working on free-market solutions to climate change.

The scores are based on analyses of how countries around the world fare under Yale University’s Environmental Performance Index, which factors in issues such as air quality, water sanitation and greenhouse gas emissions.

“While global environmental issues like climate change are incredibly complex, economic freedom is the best solution to reduce emissions and promote economic prosperity,” said Nick Loris, the author of the report.

The study pointed to China, Brazil and Venezuela — all countries where the state has heavy influence over property rights — as major culprits of increased air pollution and carbon emissions.

Free trade was also strongly correlated with better environmental health: As countries specialize and produce goods that allow their economies to flourish, that can foster better conservation of resources and more innovation toward renewable energy, the report said.

Removing tariffs and other barriers would cut costs of renewable energy and lead to more efficient products, Mr. Loris said.

“To be sure, the U.S. is still one of the global leaders when it comes to attracting entrepreneurial talent and business investment,” he wrote. “Nevertheless, the growth of the regulatory state and lawsuits can tie projects up for years, for little to no environmental benefit.”

The “Index of Economic Freedom” the study uses to compare environmental grades comes from the Heritage Foundation, a conservative think tank. The index also factors in items such as regulatory efficiency, overall government size, and the promotion of “open markets” through investment and financial policies.

Mostly free economies including Canada and the United Kingdom averaged a score of about 70 on Yale’s EPI, while the average for mostly unfree economies such as in Honduras and South Africa was about 35.

Mr. Biden is promoting his $2.3 trillion infrastructure package that includes billions of dollars for climate change-related initiatives such as $174 billion for electric vehicles.

However, tax policy that picks “winners and losers among energy technologies” can produce “inefficient economic and environmental outcomes,” Mr. Loris said in his report.

The new study comes ahead of a global climate summit Mr. Biden is convening this week.

Environmentalists are calling on Mr. Biden to commit the U.S. to cut carbon emissions by at least 50% below 2005 levels by 2030.

That’s significantly more aggressive than former President Barack Obama’s 2015 target to cut emissions by at least 26% below 2005 levels by 2025.

But as Mr. Biden tries to move the U.S. away from fossil fuels, countries such as China and India are still firing up coal power plants, said Myron Ebell, director of the Center for Energy and Environment at the conservative Competitive Enterprise Institute.

“China and India are pursuing realistic policies to benefit their people — which is odd for a communist country, I would say, like China,” Mr. Ebell said. “Whereas the American republic is going to embark on a course of energy poverty and economic devastation based on no mandate from the people or from Congress.”

The Biden administration says the increased government spending is needed to start transitioning buildings and vehicle fleets for the new economy and that the new spending will generate good-paying jobs for workers who might be displaced.

The Rhodium Group, an independent analysis firm, issued a report on Tuesday that projected new spending on decarbonizing the electric grid, a top priority of Mr. Biden‘s, could create a net of more than 600,000 jobs per year, on average, from 2022-2031.

“Climate action equals jobs,” said Lori Lodes, executive director of the activist group Climate Power.

The Rhodium report did not analyze the effect of the specific clean electricity provisions in the president’s $2.3 trillion package but said its projections were “directionally consistent.”

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