I spoke more with my friend about The End of Growth by Richard Heinberg. As a reminder, the book posits that (after 2011) economic growth is no longer possible in our world. My friend opined that it would be better for everyone if companies were incentivized to focus on sustainability instead of growth.

I think this focus on sustainability is true and necessary, but here’s my thought: sustainability is an economic externality, and if we want it we must make taxes or laws to encourage it.  We already do in some cases, my town has a minimum size of lawns for houses, the reason being that we don’t want to tear up all the trees and pave over all the grass in pursuit of houses.  The trees and grass are considered an externality, if the housing market had no rules then for many companies it would be more profitable to build bigger homes and more homes on the same size lot, with no trees or grass at all. The grass especially is important however, as rain soaks into it, and if you pave over the grass then that rain just runs downhill to somewhere else.  If all of the city was paved over, the lowest elevations would be flooded with every rainstorm. If that happened then one of two things would have to happen: either the city would have to pay billions upgrading the storm drains (essentially privatize profits and socialize loses for the housing industry) or the lower elevation areas would quickly become the poor slums where people had to abandon their flooded houses in every rainstorm.

So we already in some cases make laws dealing with sustainability and externalities, you can’t build whatever you want in a national park because we’ve decided that those need to be sustained for future generations. Now the problem is that not everyone agrees on what is good sustainability and thus what should be taxes or forbidden by law.  A coalition of YIMBYs and housing moguls in my city are trying to change the law to eliminate lawn minimums, saying they prevent the construction of more housing.  I’d say I agree with them on the balance, but sustainability advocates have their own point: what about all the trees and all the rain?  Shouldn’t we have a city that isn’t baked by the sunlight and not flooded in every storm?

To that same point, sustainability taxes/laws have been proposed in many other ways, but they always come with tradeoffs.  A carbon tax encourages us not to increase CO2 levels, but what about the working poor who can no longer afford to drive to work?  Access to a car is very closely linked to upward mobility, because if you can only work in jobs you can walk or bus to then your options are severely limited.  We can also put taxes on plastic to discourage single-use waste that is trashing our oceans, but is taxes on our plastic use worth the hit that would be taken by modern biology and chem labs, some of which are researching the very medicines we needed during the last pandemic and will need again during the next one? Everything in a modern bio or chem lab is single use in order to meet very strict standards of reproducibility by preventing contamination. The lack of single-use plastics would either require us to use more expensive alternatives (single-use glass) or require us to relax our standards (multi-use glass where we accept that molecules and biologics from a previous experiment won’t always be removed by the cleaning process).

Sustainability requires tradeoffs, it’s something we should strive for but we need to understand and be mindful of those tradeoffs.  Companies and people will always be pushed by economic forces, if there was a massive carbon tax I wouldn’t own a car, and if there was a single-use plastic tax then my lab might not be have money to function.