In a recent post, Ron Steenblik wrote:

Indeed, I am generally a skeptic of heavy-handed market manipulation.

A perfectly reasonable position for environmentalists in general to take, especially after the history of Big Oil, Big Coal, Big Corn, etc. using their power with the state.

Not to dump on Ron — who only provided the most recent example of this general skepticism — but greens in general need to get over their suspicion of the state; in particular, they need to move beyond the small-government, market-focused ideas deeded to us by some of our brightest lights (the Amory Lovinses of the world.)

Let me start off with a few obvious disclaimers: Yes, I recognize that environmentalists have been poorly-served by big government — ethanol in the U.S., tar sands here in Canada, nuclear and big hydro dams all over the world — and like Ron, I think a certain amount of skepticism is warranted. And yes, where possible, I would prefer market-based solutions to our problems.

I’m open to evidence that market solutions can work, but I think we’re about 20 years too late for incremental reforms. Look around, people. A chunk of ice the size of Manhattan broke off from Ellesmere Island in the Canadian north earlier this year. Manhattan. Floating away. Al Gore is calling this a climate crisis, and who am I to argue with Al Gore?

There are lots of things the market does spectacularly well (he says, typing words onto a flatscreen monitor), but responding to massive, systemic crises simply isn’t one of them. Everybody recognizes this when it comes to other spheres of human activity — nobody talks about market-based strategies for national defense, after all. If global warming is a crisis, we need to respond to it the way we would respond to other crises of the same scope. When Carter called for the “moral equivalent of war”, he was on to something.

Nevertheless, I am skeptical of the massive, state-led, Apollo- and Manhattan-style dreams for sustainability. Fortunately, there is another paradigm available, one that’s already part of the environmental lexicon: development. As in, “sustainable development.” When it comes to sustainability, the entire world is Sierra Leone. We are all in the Green Third World, and we will need to figure out development models that can bring all of us — “wealthy” North and poor South alike — in to a sustainable economy.

Here, the insights of development economics are extremely useful, specifically some of the dissident views on the failure of purely market-based solutions in the third world. I’ve written about this a bit before, but it’s probably put best by former World Bank Chief Economist Joseph Stiglitz:

Yet history shows that in every successful country, the government had played an important role. Yes, governments sometimes fail, but unfettered markets are a certain prescription for failure. [my emphasis]

An even stronger argument is made by Cambridge Economist Ha-Joon Chang, who points out that today’s market-loving powers were yesterday’s worst protectionists:

The historical picture is clear. When they were trying to catch up with the frontier economies, the NDCs [now-developed countries] used interventionist trade and industrial policies in order to promote their infant industries. The forms of these policies and the emphases among them may have been different across countries, but there is no denying that they actively used such policies. And, in relative terms (that is, taking into account the productivity gap with the more advanced countries), many of them actually protected their industries a lot more heavily than what the currently developing countries have done.

Chang is just one of many economists who have strongly argued against the laissez-faire model of development, based on shockingly uncouth use of a thing called “historical evidence.” The market alone has never provided a strong impetus to growth — it takes competence, foresight, and vision on the part of government to craft proper development policies. This is obviously true for the old, unsustainable form of development. Why would it be any different for sustainable development?

Better still, “development” is not fear-based, the way a crisis-driven mobilization would be. (You all should have read David’s pieces on fear by now!) Environmentalists can make a good argument for a strong government hand in sustainable development without evoking Hiroshima, Communism, or even 9/11. What we need is not a new nuclear bomb or 100,000 bombers. What we need is the green Japanese Miracle, or the “30 glorious years” in America and Western Europe.

There’s a final reason why environmentalists shouldn’t be afraid to grab the mantle of development and big government: If we don’t, someone else will do it for us. You can already see Washington pushing more coal, more nuclear, more oil shale, for God’s sake. At the end of the day, we aren’t going to win this argument by being against government. Instead, arguing for green development allows us to fight on their turf — deploying the power of the state for our own ends.