Friday, May 13, 2005

Collective Conservation

As natural resources go, there's nothing quite like petroleum. The largest reserves are situated in some of the most politically unstable regions on earth. Its extraction and transport involve significant environmental risks that periodically result in catastrophe. Once it reaches the market, its consumption plays a substantial role in urban air pollution and anthropogenic climate change. On the other hand, it is one of the most useful substances known to mankind. It is, by a wide margin, the world's most important source of energy (accounting for 37.9% of the total in 2002) and is an indispensable component in literally thousands of products we all use on a daily basis. Modern society, as currently constructed, simply could not exist without it. But, on the other other hand, it is nonrenewable. Sooner or later, it will run out.

In the face of this impending crisis, two schools of thought have emerged. The first largely acknowledges the truthfulness of the claims I have just made and argues for conservation. The second, however, tends to deny the urgency of the problem. The environmental claims, they say, are overblown. They acknowledge that the increasing global demand for petroleum is beginning to stress our production capacity, but argue that the remedy lies in increased exploration and production. Our problems would be solved if we could only bring more oil to the market.

This is, in my opinion, nothing more than denial. And, apparently, they are aware of this fact on some level. This is why discussion of conservation frequently devolves into attempts to indict the messenger. The line of attack generally follows a predictable arc: those advocating conservation are limousine liberals who shuttle themselves across the country in Hummers and private jets -- who are they to tell us to conserve? A great example of this phenomenon occurred during Sean Hannity's radio interview of Robert Kennedy Jr. last August. Rather than argue the case on its merits, Sean repeatedly attempted to extract a promise from Kennedy to refrain from future private jet travel. Of course, this is nothing but simple misdirection. Still, as a rhetorical device, it can be quite effective. Therefore, it's important to understand exactly how empty this claim is.

First, let's put aside the demographic issue. The claim that conservationists spend a disproportionately excessive amount of their time on Lear jets fails the laugh test. To my knowledge, no one has attempted to produce any numbers to justify this assertion. Until they do, it isn't even worth consideration.

The real issue is whether or not conservationists are being hypocritical by demanding a top-down solution if they are unwilling to independently reduce their own consumption. On the surface, this might appear to be true. But, a closer examination reveals the fallacy of that argument.

A short while ago, in the context of a different discussion, I briefly addressed the phenomenon known as the collective action problem.
The basic idea is that rational entities acting independently cannot address collective issues. For example, if all farmers in a town allow their cattle to graze all in the town commons, the land will soon be overgrazed and useless to everyone. However, they cannot choose to independently limit their grazing because others would simply take advantage of the situation by allowing their cattle to graze further. In such a situation, those acting on behalf of the group are punished while those acting on their own interests are rewarded.
Conservation is a classic example of this problem. You and I might believe the benefits of reducing our petroleum consumption outweigh the costs. However, if we choose to lead by example, we pay a price for doing so. Oil consumption is directly related to the ability to generate and acquire wealth. Therefore, our voluntary act of conservation will be paid for with a reduction in our net worth.

But, that is not all. Because we are using less oil, demand for petroleum will drop, leading to a price reduction (see supply and demand). Suddenly, those who have chosen not to conserve will be rewarded by these cost reductions. Some will simply choose to pocket the savings. Others will respond by increasing their consumption (and, in the process, undoing a portion of our hard work). Either way, the result will be an increase in wealth for non-conservers.

In short, independent conservation impoverishes those who comply and enriches those who do not. Therefore, due to the correlation between wealth and power in our society, those who admonish the advocates of conservation to take the first step are, in truth, advising these advocates to reduce their political and social influence. That isn't exactly what you would call a good deal.

No, the only way for the costs of conservation to be distributed fairly is through top-down regulation. Regardless of the method employed, it must be applied across-the-board -- no exceptions. Anything less creates incentives for noncompliance, making such a system unworkable in the long run.

Now, I have no doubt that Sean Hannity would love to see conservation advocates voluntarily reduce their influence within society. I'm sure that he could care less as to whether or not such independent conservation led to a significant decrease in petroleum consumption. But, these advocates should make it clear that this is what is being asked of them. They should not be taken in by his rhetorical machinations, nor should they allow him to portray them as hypocrites. They are simply seeking an equitable distribution of the costs of conservation. Could anything be more reasonable?

In the end, we are going to face the consequences of a waning petroleum supply. We will not escape the environmental impacts resulting from the exploitation of this resource. This transition will not be easy and will inevitably change the world we live in, perhaps dramatically. Therefore, as we approach our day of reckoning, it is important that we proceed with our eyes open. This is serious business and if we allow ourselves to be distracted by dishonest charlatans, we divert precious resources that would otherwise be devoted to achieving an equitable resolution. Those who deny, distort, and dissemble should be exposed for what they are -- and then, if possible, ignored.

There is too much work to do.
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