Even in its current shackled and constrained form, modern capitalism still has a lot to show for it. One of the greatest developments of the last two decades has to be the extension of air travel to low-income groups, which, of course, began when the airline industry was deregulated and airline companies were privatised. If I were a poverty campaigner, I would defend this achievement tooth and nail against the Malthusian miserabilists who want to reverse it again. I suppose that in some parallel universe, where things are slightly more logical than in ours, poverty campaigners and environmentalists must be arch enemies.

Environmentalism has become so inextricably mingled with anti-consumerism that the two have become virtually indistinguishable. In the combined environmentalist/anti-consumerist perspective, environmental protection is not about a trade-off, with losses in material living standards being weighed against environmental damage. Enforced reductions in consumption are not presented as a necessary price to pay for fending off environmental disasters. They are seen as virtuous and desirable in their own right – a weapon against mass consumerism, which is perceived as vulgar and plebeian. There are even environmentalists who criticise this tendency in their own ranks. Lord Deben writes about ’the more extreme of green campaigners, whose penchant for misery is unbounded. Their puritan belief that we would all be better off colder and less well fed fuels the proposition that a low carbon future will mean considerable and extensive self-denial.’

Quite so, except that this not an ‘extreme end’ at all, but an apt description of mainstream green thinking. If I were a poverty campaigner, I would not bother railing against free-market baddies, as long as environmentalism is around. The consequences of this ideology cost the people the poverty lobby claims to represent dearly. Most environmental taxes in the UK are already so high that they are no longer commensurate with the environmental damage caused by the taxed activities (see here, Chapter 5). Yet the poverty lobby is completely silent on this matter. Fuel poverty is a big topic for them, but the green taxes and regulations which cause it are not.

There is a lot that could be done in this area to raise low-earners’ living standards at a minimal cost to the exchequer or, indeed, the environment. The first step should be an immediate end to all subsidies for renewable energy (beyond existing legal commitments). This would cut gas prices by 10%, and electricity prices by 16%, without any increase in CO2 emissions. CO2 emissions are already capped at the European level under the umbrella of the ETS, so abolishing subsidies for renewable is the closest we can get to a win-win situation. A revenue-neutral reform of fuel duty should then be next in line. In general, the principle should be that if a tax is justified on environmental grounds, its rate should have to be limited to some independent estimate of the external cost of the taxed activity. Environmental taxes should be nothing more than a means to internalise an externality. They should not be a means to extract yet more tax revenue, and they should not be a pedagogical tool either. If that principle was followed coherently, living standards of low-earners would increase substantially. In particular, their mobility would be enhanced, with all the beneficial side effects that this entails, such as lower travel-to-work costs and thus greater employment opportunities.

Green thinking is arguably a fad of bored middle-class metropolitans. Of course, they have every right to follow any fad they want to, no matter how costly. But they should not be able to force it on those who do not share it, and who cannot afford it.

Kristian Niemietz is the author of Redefining the Poverty Debate: Why a War on Markets is No Substitute for a War on Poverty.

Dr Kristian Niemietz joined the IEA in 2008 as Poverty Research Fellow, becoming its Senior Research Fellow in 2013 and Head of Health and Welfare in 2015. Kristian is also a Fellow of the Age Endeavour Fellowship. He studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). In 2013, he completed a PhD in Political Economy at King’s College London. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and at King's College London, where he taught Economics throughout his postgraduate studies. He is a regular contributor to various journals in the UK, Germany and Switzerland.

2 thoughts on “Freeing the poor from the cost of environmentalism”

  1. Posted 19/02/2013 at 16:00 | Permalink

    Given the lack of comment here, you probably aren’t delivering good value for your right wing US pay masters. who fund you to produce this nonsense. Let’s hear some truly independent voices that accept that environmentalism helps the poor in this and other countries.

  2. Posted 20/04/2013 at 16:34 | Permalink

    @Brain Jones, Please explain.. How does environmentalism help the poor?

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