Brad Gentry, Swarthmore alum, presented a lecture Thursday evening entitled “Profiting from Pollution: Markets for Environmental Services.” The lecture was well attended, its numbers swelled by Economics 1 students. While Gentry majored in biology at Swarthmore, his credentials in the politics of the environment are quite extensive, including work with the International Monetary Fund among numerous other jobs.
The lecture was about the feasibility and effectiveness of the private market providing services for the environment. Pointing out at the beginning of the lecture that the private funds provided for third world countries’ protection and that development of their environments far exceeds the public money provided for the same issues, from foreign aid and international organizations, provided and that is necessary for those jobs, Gentry then argued that the privatization of services typically thought of as being provided by the government is-in many but not all cases-the best way to effectively protect the environment.
The cap and trade system, by which companies by the “rights” to pollute, with the number of rights limited so as to reach the (lower) desired level of pollution is the best way in many cases to address the issue of pollution. The reasons given for the strength of this model were that it encourages investment, reduces strife through trading, promotes innovation, and is often the lowest cost solution.
In addition to the cap and trade model of pollution reduction, Gentry also addressed other public goods that people need but that aren’t being adequately being provided by the government and public money. For example, clean water and sanitation-goods that Americans take for granted-are desperately underdeveloped in many nations. The number of people in the world who do not have access to clean water is four times the size of the U.S. population, and the number that does not have access to adequate sanitation is eight times the size of the U.S. population.
The World Bank, which in the 1970s and 80s felt the best way to address this problem was to give money to the governments of struggling nations to use to address these issues. However, in the past decade it has reversed its strategy as all the money that it has handed out has not resulted in an appreciable increase in the standard of living in many countries, and is now instead saying that private investment is the way to address the problem.
However, Gentry recognizes that the private market is not always the best way to protect the environment and address other shared needs problems. Gentry acknowledged that it is not always politically acceptable, environmentally effective, administratively possible, or fair to let the private market address these problems. In fact, he stresses that the private market method should only be met when it is believed that it would be the best way to solve problems.
Gentry concluded his lecture by stating that while he was not positive that capitalism could save the environment, but that he was willing to make mistakes to see if it would solve the environmental problems humans currently face.