SLOAN | Private sector out-greens the government

If government bureaucracy can be said to excel at any one thing, it is redundancy, usually of the harmful variety. Most of the time, the free market and private industry find themselves far ahead of the government when it comes to achieving societal goals and meeting social and environmental targets.
This fact never seems to hamper the various bureaucratic agencies from imposing a labyrinth of rules and regulations anyway. It would be rather amusing, if the economic harm done by this overregulation didn’t, on balance, far outweigh any good the regulators might hope to accomplish.
We don’t lack for examples of this, both nationally and locally. Here in Colorado the state’s Air Quality Control Commission is in the throes of rulemaking procedures in accordance with the dictates provided in HB 19-1261, the sweeping environmental package passed by the state legislature last year. The bill sets broad emission goals and targets, and the AQCC is tasked with devising the regulatory instruments to beat industry into compliance.
However, the question is emerging of whether such regulatory instruments are even needed; it turns out that even before the bill was signed, Colorado’s greenhouse gas emissions were decreasing. Colorado businesses, without being told or coerced by government agencies, have adopted internal policies and procedures adjusting the way they do business, that have led to remarkable decreases in emissions. In other words, efforts by private industry in Colorado, in response to market conditions and consumer demand, have been far more effective, with far less of a negative economic impact, in achieving environmental goals than government’s legislatively forged stick could ever hope to achieve.
We see the same thing nationally. Ironically, it is the companies and industries which draw the most virulent opprobrium from environmental groups that are doing the most to lead the way in achieving reductions in emissions. For instance, ExxonMobil just announced plans for further reductions in its greenhouse gas emissions over the next five years, which are consistent with the Paris Agreement goals. In addition to cutting upstream emissions, Exxon’s proposal aspires to provide a 40 to 50 percent decrease in methane emissions and a 35 to 45 percent decrease in flaring across the company’s operations worldwide. Similarly, both Shell and BP have announced plans to become net-zero carbon emitting companies by 2050. Meanwhile, Chevron is opting for a different path to achieving measurable emission declines by focusing instead on achievable, short-term targets. Time will tell which approach is more feasible; but in any case, they are concrete actions taken by private companies, accountable to their shareholders and their customers, not chimerical mandates imposed by unaccountable government agencies.
We can see this work on a global level as well. As private companies operating in a (relatively) free-market environment in the U.S. have taken on the task of reducing their carbon footprint and emissions, that has translated into the United States becoming the world leader in emission reduction. Earlier this month, a U.N. report on the global emissions gap pointed out that the United States has continued to decrease its greenhouse gas emissions faster than any other major nation. Moreover, it did so without being part of the Paris Climate Agreement.
The lesson in all of this is that there is a better, more efficient way to meet society’s environmental goals than by using the government hammer, the preferred tool of the bureaucracy and the environmentalist lobby. Free markets provide incentives for private businesses to improve their own practices and achieve common goals, in a way that does not inflict the economic misery of heavy-handed regulation. It’s axiomatic that governments never cease discovering new reasons to flex their altruism. In so doing they tend to create a myriad of new problems, each of which, to bureaucratic ears, cries out for a few more pages in the federal register to resolve. It is a temptation which should be steadfastly resisted.
The incoming Biden administration, and the governor and state legislature here in Colorado, would be well advised to instead look to the success of the private sector in creating a better world, and keep well out of its way.

