I have been visiting Matthew Kahn’s blog again, and he always provides interesting thoughts and opinions for environmental economists. This time he suggests that it is useless for the individual to act green since the overall impact is negligible, or, in his words, a “drop in a bucket”. To be fair, he uses this argument for economists that decide not to go to international conference for environmental reasons (carbon footprint), but his argument is certainly applicable to most green activities of individuals.
Here is why I do not like this sort of argument: So yes, he is correct from the perspective of a single person. If I decide to not fly then my impact on the world’s GHG emissions is so close to zero that any cost accruing to me should outweigh the benefits. Hence, if I were to rely on a standard Cost-Benefit Analysis using only self-centred preferences, then I should always fly and never act green (unless the green activity is an in-my-backyard activity).
Of course, much of the public good literature suggests this is precisely the reason for which public goods tend to be underprovided. But, obviously, in reality individuals are well-aware that their actions do have an impact well-above the immediate one, and this may be the reason for which they actually act green. One of these indirect impacts is, for example, a potential spillover effect, or network effect, which then induces others to think more carefully about their own choices, too. This spillover effect may be sizable, and there is a growing literature that studies this transmission of green behavior across generations or networks. The basic result of that literature is that, if there are enough individuals who actually do act green, then their actions may induce further green behavior by others and subsequently we may become a society that is strongly green oriented.
But, more importantly, an argument as the one raised by Matthew Kahn is dangerous insofar as it implies that green action by individuals is not worthwhile at all. If people start to believe this, then they will tune down their pro-environmental attitude, and instead expect the government to take over the role of the green actor. Of course, everyone is becoming more and more aware that, without a sufficiently strong grassroots movement, e.g. in the form of Agenda 21, it is undoubtedly clear that we would ruin this planet even faster than we currently are.
How to reconcile environmentalists’ personal self-interest with the interests of the environment is a recurring theme in environmental economics. My favorite take on the topic is a book by Gernot Wagner, an economist for the Environmental Defense Fund, “But Will the Planet Notice.” For a quick overview, here is my review of Wagner’s book: http://www.economonitor.com/dolanecon/2011/10/24/only-economists-can-save-the-planet/