Politics

Pollution Permits and Monopolies

So I'm reading this op-ed piece in the Guardian by George Monbiot. He's talking about keeping the coal and oil in the ground. Because if it comes out, it will be used. And I'm thinking yeah, that sounds logical, but impossible, given human nature. How are you ever going to get people to leave it in the ground? He talks about a global auction in pollution permits. I'm not sure if the real point of that is making the added expense to corporations a disincentive to using fossil fuels (and an incentive to explore cheaper alternatives), or to build up a slush fund (pun intended) to mitigate the effects when they go ahead and use the fossil fuels anyway.

But as I'm wondering this, an image comes to me. I was cleaning the garage yesterday and on a shelf I found a bag from the local fleet store containing a couple of packages of yellow rope. It's your basic braided synthetic, I remember buying it. And what I particularly remember is that it's made by Koch Industries.

I needed some rope for a job. I went to the store to get some. I noticed that the type I wanted had a little Koch Industries logo sort-of hidden on the back. I'm a little bit politically aware, and I thought, I'd really rather not give my money to the Koch brothers. What other type of rope will work for my job?

It didn't matter. Every variety of rope and twine on the shelves was from Koch Industries. Didn't matter if it was synthetic or natural fiber. Whatever I bought, the Koch brothers were going to get my money.

My point is, so what if big corporations have to buy pollution permits. It's just another tax that they'll either avoid, or offset with tax savings wrung from the nations, states, or cities where they operate. Or, failing that, they'll pass to cost on to their consumers.

As long as we don't do anything to address the overwhelming (and still growing) power of monopolistic multinationals, we're basically just taxing the little people.

Market Failure in Minnesota

During a recent "special" session of the Minnesota legislature, a bill was snuck through the House and Senate eliminating the Minnesota Pollution Control Agency Citizen's Board. Established in the 1960s, the Citizens' Board had consisted of eight members and the Commissioner of the MPCA. Their bylaws called for one member to be "knowledgeable in the field of agriculture." According to former Board member Jim Riddle, "The Citizens’ Board came under fire from corporate agribusiness interests last fall, after we required an Environmental Impact Statement (EIS) for a proposed confined animal feeding operation (CAFO)."

The owners of the CAFO didn't have enough land to spread even half the manure they would generate. They had no idea (or interest) how much their water use would impact existing farms in the area. Their water plan consisted of building a twelve mile pipeline from a well that had been permitted seven years earlier for an ethanol plant that had never been built.

The Board's request for an environmental impact statement angered the
Agri-Growth Council, whose Directors include executives from Cargill, CHS, and General Mills. Although Riddle says the Board didn't prohibit the CAFO, apparently agribusiness is unhappy with the idea that anyone has the authority to insure that "more information be provided on the environmental and economic impacts of the proposed facility, in order to demonstrate that Minnesota’s laws would be followed and the health and safety of area residents and the environment would be protected."

Advocates for a lot of schemes like CAFOs, sulfide mining on the Iron Range and pipelines through the Headwaters like to portray the opponents of these schemes as head-in-the-sand Luddites. Elimination of the Board, says Riddle, will make it "easier for industrial agriculture, mines, pipelines and other extractive and polluting activities to be approved with little or no citizen participation."

The reality, it seems to me, is that the advocates of these schemes fear their plans won't stand up to close scrutiny. The point is not that CAFOs should never be built, that copper should never be mined, or that oil should never be transported. People could argue those points, but that's not the point here. The point is that politically powerful owners and corporations want to do these things in the cheapest, sloppiest way possible, with no oversight. This makes good economic sense, if your economic perspective extends only to the next quarterly or year-end report. The corporations are acting rationally, from their economic point of view, when they behave this way. CAFOs and companies like Enbridge and Polymet have a long history of cutting corners to save money, and then trying to evade the penalties and costs of cleanup when things go wrong.

But clearly this kind of sensible economic behavior is not in the public interest, or even in the long-term interest of the companies involved. The decision to do it anyway and try to silence the opposition is what economists call "market failure." It is precisely why we can't have a completely free market (despite the fantasies of Ayn Rand-readers), and why regulatory agencies and citizen boards need to exist.