Government regulations, including those that are supposedly for environmental protection, increase the cost of doing business. Over the long term, it is conceivable that environmental regulations can bankrupt a nation, and there is some correlation of GDP and environmental impact, so the regulations may have a net negative effect on the environment. The statistics on such situations are convoluted, and can probably be used to prove the above statement wrong just as easily as proving it right.
But today I saw some anecdotal evidence of environment affecting wealth affecting environment, and back again. As you know, the corn industry is heavily subsidized. Part of the reasoning for the subsidies was environmental – generating ethanol from corn was considered, by some, to be a better alternative fuel source (economic stimulus to protect the environment). This has caused a misallocation of corn from food to fuel, which is probably a partial contributor to the high cost of corn and other grains today (environmental regulation adversely affects the economy). Now, the high cost of corn has encouraged some people, who were previously adverse to using genetically-modified corn for ethical or environmental reasons, to start buying GM corn due to the cost savings (trend toward poverty diminishes an individual’s ability to partake in luxury “environmentally friendly” products).
To be sure, I am ignoring many other factors in each of these stages, but this is a simple illustration of blowback in environmental regulation. I wonder what will happen in the EU, where GM foods are heavily regulated…
1:48 pm on April 21, 2008
