The case for active government regulation in the environmental sphere

Duke Energy’s most recent discharge of coal ash into the Dan River – “enough coal ash to coat 70 miles of the Dan River with toxic sludge” – provides another example of why active government regulation is necessary to protect environmental and human health. With the recent rise of radical free market ideas into mainstream politics and the Republican Party consolidation of political power in a number of states across the United States, active government regulation in the environmental sphere was deemphasized in favor of “pro-business” policies. Such pro-business policies place a much greater stress on reducing government ‘red-tape’ and relying on private businesses to police themselves in areas of environmental regulation, in particular.

As my political beliefs have changed with time, I’ve come to believe that government involvement in a number of social and economic spheres may cause more harm than good. But this is not the case when it comes to environmental regulation.

Classical liberals typically argue, implicitly or explicitly, that self-interest is the natural basis upon which private individuals cooperate with one another in society. As part of this argument, classical liberals also argue that economic incentives drive self-interested individuals to act in one way or another. And given the ability to act freely in undisturbed markets (i.e., markets without government interference), individuals will conduct efficient economic transactions that benefit the individual and society as a whole.  

But the classical liberal argument is an intellectual pipedream which disregards the possibility that private individuals (or companies) may have an economic incentive to pollute, for example, as in the case of Duke Energy. The Huffington Post states the following: “Records show that Progress Energy, which was acquired by Duke in a 2012 mega-merger, bought five acres adjacent to its coal-fired power plant near Asheville for about $1.1 million — a price tag far below what it would have cost to clean out its leaking coal ash pits.”

I would like nothing more than to agree with the classical liberal argument that government involvement and active regulation specifically regarding environmental pollution is an unnecessary policy solution. However, there are no free market solutions for issues of environmental pollution because the economic incentives to pollute are too great.

Maybe in a more perfect time and place, companies like Duke Energy would behave according to the high-minded ideals of deep ecology and intergenerational justice, as well as practical concerns such as human and environmental health. We’re not living in such a time and place, though. In our own context, businesses respond to calculated cost versus benefit analyses that favor short-term monetary gain. If the ‘free hand’ of the market were left to itself, the rest of the body would soon die of some environmentally related illness.