Current Issues in U.S. Environmental Policy

By A. Myrick Freeman; Paul R. Portney | Go to book overview

CHAPTER 6
Investment, Inflation, Unemployment, and the Environment

ROBERT H. HAVEMAN and V. KERRY SMITH

IN RECENT YEARS we have been bombarded with conflicting assertions about the incompatibility of environmental quality with other important goals. On the one hand, opponents of the environmental movement argue that stiff controls will be inflationary, will impede economic growth, will deprive firms of needed productive investment, will lead to plant closures, and will cause a loss of jobs. On the other hand, increasing numbers of environmentalists have argued that it is possible simultaneously to create jobs, conserve energy and nonrenewable resources, and protect the environment.1

____________________
1
One such group Environmentalists for Full Employment publishes a newsletter in an effort to form a coalition between workers and environmentalists to attain these goals. In their first newsletter, which appeared in November 1975, they state their goals as:
A. Modern technologies that are excessively capital intensive and energy wasteful simultaneously destroy the environment, deplete resources, and cause structural unemployment. These problems must be attacked concurrently, and such technologies must be rejected.
B. U.S. economic history is a parade of innovations using more and more capital, energy, and resources. In a world of increasing population and diminishing resources, it is more efficient to fully employ human resources while conserving capital and natural resources. But most economic analysts have not yet grasped this new reality.
C. U.S. policy makers have consistently failed to internalize all the costs of our economic system--including pollution, unemployment, and other social costs--in their economic procedures. We must follow the principles

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