Neoliberal Environmental Policy

Goals and tools of Neoliberal Environmental Policy

For its proponents, neoliberal environmental policy reflects commonsense economic science that produces growing, market-oriented, profit-driven economies that will soon generate sufficient jobs and taxes to rectify any social or environmental problems that might occur. Neoliberal environmental policies contrast with those of previous import-substitution and Keynesian periods, when “command-and-control” approaches sought to solve environmental degradation problems through regulations, standards, fines, and lawsuits that force producers to reduce their environmental impacts. Neoliberal economists criticize that approach as inefficient, unnecessarily expensive, inflexible, and stifling of innovation. A better approach, they argue, comes from private property arrangements and markets that internalize the costs of environmental degradation, and so they promote privatization of agricultural land, fisheries, pollution sinks, biodiversity, and public enterprises ranging from mining companies to water provisioning systems.

Many other neoliberal policies, such as free trade, also affect the environment. Although the environment gets little explicit consideration in the theory promoting, for example, an end to import quotas and tariffs, the general idea is that increased trade increases wealth, which eventually leads to environmental improvement. Similarly, neoliberalism promotes decreased state expenditures, decentralization, and the participation of civil society in governance. Reconfiguring environmental governance to include streamlined states, civil society actors, and local, presumably more representative, levels of government is thought to bring greater efficiencies to environmental regulation.

Criticisms of Neoliberal Environmental Policy

Opponents contend that free trade and investment rules create a global “race to the bottom” as companies look for the regions with the lowest effective environmental regulations. Under neo-liberalism, debt payments and foreign exchange earnings become key goals of governments. Natural-resource-dependent sectors such as agriculture, forestry, mining, and fishing often provide the required exports, almost always with high environmental impacts. Meanwhile, other neoliberal policies increase income disparity [Page 2008]and poverty, which drive cycles of environmental degradation as the poor erode soils and clear forests in their desperate attempts to make a living.

Critics of environmental privatization point out the extreme difficulty in constructing resource-conserving markets, especially because markets almost always give too low a value to environmental attributes. They also raise several human rights concerns: First, all people have the right to clean water and air; second, forests, fisheries, and biodiversity have many users and possessors who are harmed when property rights are taken away from them; and third, many environmental attributes and livelihood resources have values that have no price and cannot be justly exchanged for money in markets.

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