Nonmarket Forces Governments Role

Like green technologies, government action also helps explain both the shape and location of the EKC. Some economists argue that as income rises, the typical voter becomes more willing to support spending on regulation.22 A related hypothesis suggests that a nation is more likely to enact environmental regulation when its economy is growing and income inequality is falling. Under these conditions voters are more likely to agree on policy priorities, and the government has the resources necessary to pursue environmental goals. These types of arguments help account for the shape of the EKC.

In addition, political action can shift the EKC turning point or help move the curve down. One unexplored but plausible channel for such influence consists of firm expectations. If companies expect "green" politicians to remain in office over an extended period, they will have stronger incentives to invest in energy-saving and pollution-reducing technologies. By contrast, a "pro-business" government is unlikely to stimulate downward and inward movement in the EKC.

Even more important, factors or events that help trigger pro-environmental activism can have a significant impact on the location of the EKC turning point. For example, better information about the effects of environmental hazards could cause demand for regulation to be voiced at a lower level of per capita income, moving the curve in. Such information is often provided by dramatic events, such as the 1969 fire on

22. Selden and Song (1995).

Figure 3-2. Pollution Level and Death Rate, London, December 1-15, 1952

Smoke milligrams

Figure 3-2. Pollution Level and Death Rate, London, December 1-15, 1952

Smoke milligrams

Great Smog Death Rates

Day of the month

Source: Met Office, "The Great Smog of 1952" (www.metoffice.com/education/secondary/stu-dents/smog.html [November 2005]). © Reprinted with permission, Crown copyright 2006; published by the Met Office.

Day of the month

Source: Met Office, "The Great Smog of 1952" (www.metoffice.com/education/secondary/stu-dents/smog.html [November 2005]). © Reprinted with permission, Crown copyright 2006; published by the Met Office.

Ohio's Cuyahoga River or the 1989 Exxon Valdez oil spill, that wake up a complacent electorate to lobby for greater environmental protection. For example, horrific pollution levels helped trigger major changes in air pollution policy in London in the 1950s. Figure 3-2 presents time series data documenting the dramatic increase in London's pollution levels in 1952 and the subsequent rise in the death rate. The silver lining of this tragedy was the fact that it prompted the passage of far more stringent air pollution regulation. Following the Great Smog of 1952, the British government passed the City of London (Various Powers) Act of 1954 and the Clean Air Acts of 1956 and 1968. These laws banned emissions of black smoke and decreed that residents of urban areas and operators of factories must convert to smokeless fuels.23

23. Met Office, "The Great Smog of 1952" (www.metoffice.com/education/sec-ondary/students/smog.html [November 2005]).

Figure 3-3. Articles Mentioning Pollution, New York Times, 1979-2001

Article count

Article count

Figure 3-3. Articles Mentioning Pollution, New York Times, 1979-2001

Articles Pollution

1980 1985 1990 1995 2000

Year

Source: Author's calculations based on database from ProQuest Information and Learning, "Pro-Quest Historical Newspapers" (www.proquest.com/products_pq/descriptions/pq-hist-news.shtml [May 2006]).

1980 1985 1990 1995 2000

Year

Source: Author's calculations based on database from ProQuest Information and Learning, "Pro-Quest Historical Newspapers" (www.proquest.com/products_pq/descriptions/pq-hist-news.shtml [May 2006]).

While the consequences of London's Great Smog were immediately obvious to anyone living in that city at the time, in other cases people may only be aware of environmental challenges if they are publicized in media outlets, such as newspapers and radio and television programs. As a result the existence of a free and competitive media establishment can help bring about environmental regulation at an earlier stage in a nation's development. Figure 3-3 presents annual data from the New York Times archives documenting yearly trends in the number of articles in this influential newspaper that mention pollution. 24 There is clear evidence that there were many more articles written about the environ

24. New York Times articles were counted in monthly increments following the environmental shock. The articles were found using the ProQuest Historical Newspapers database for the New York Times, 1851-2003. Keyword searches were used to find the different environmental shocks, such as "Chernobyl." See ProQuest Information and Learning, "ProQuest Historical Newspapers" (www.proquest.com/ products_pq/descriptions/pq-hist-news.shtml [May 2006]).

ment in the late 1980s than in more recent years. Such intensive coverage can potentially shift the EKC by transforming local tragedies into salient events that trigger regulation on a national scale.

Consider the example of Love Canal, New York. Throughout the 1940s and 1950s, more than 21,000 tons of chemical wastes were dumped there. In the 1970s Love Canal residents began to complain of health problems, including high rates of cancer, birth defects, miscarriages, and skin ailments. The Environmental Protection Agency claims that 56 percent of the children born in Love Canal between 1974 and 1978 had birth defects. The Love Canal disaster helped galvanize support for programs to address the legacy of industrial waste, and this political pressure led to the creation of the Superfund Program in 1980.25 As Timur Kuran and Cass Sunstein described this process,

A kind of cascade effect occurred, and hence in the period between August and October 1978, the national news was saturated with stories of the risks to citizens near Love Canal. The publicity continued in 1979 and 1980, the crucial years for Superfund's enactment. There can be no doubt that the Love Canal publicity was pivotal to the law's passage in 1980. In that year, Time magazine made the topic a cover story, and network documentaries followed suit. Polls showed that eighty percent of Americans favored prompt federal action to identify and clean up potentially hazardous abandoned waste sites. Congress responded quickly with the new statute.26

Another example of the importance of information has its roots in the Union Carbide plant disaster in Bhopal, India, which prompted the creation of the U.S Toxic Release Inventory. Through this inventory local communities are now supplied with information from local manufacturing plants concerning which chemicals and in what quantities these plants are releasing into the local environment. This information is widely publicized through the media, and its release creates a "day of shame" for the largest polluters.

Environmentalists recognize the power that salient events can have in motivating voters to take and support costly action.27 Without salient

25. Greenstone and Gallagher (2005).

26. Kuran and Sunstein (1999).

27. Disasters are not the only source of such events. Bestselling books, such as Silent Spring (Carson 1962) and The Population Bomb (Ehrlich 1968), can be events it becomes much harder to mobilize a coalition to enact green regulation. Therefore distant, ambiguous environmental issues, which are unlikely to grab the public's attention, are often the most difficult to resolve. A savvy politician who wants to be reelected will not lead the fight on global warming when he can gain more from winning the war on crime or improving school quality.

"Lulling" events make the environmentalists' job even harder. If people are lulled into believing that environmental problems are improving over time, then they will be less likely to support an activist environmental regulatory agenda. Fear of this effect may explain why books that are optimistic about ongoing environmental trends often provoke such strong controversy. For example, Bjorn Lomborg's book The Skeptical Environmentalist was a media sensation, generating repeated headlines in the New York Times, despite its technical detail, graphs, and data analysis. The media was captivated by the fact that an ex-Greenpeace member was optimistic about global sustainability trends, and environmentalists quickly mobilized to rebut his conclusions.28

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