By: Nick Eberhart
Source: Associated Press
In times of economic difficulties, environmental sustainability often takes a back seat to economic growth. The recent global economic recession diminished the economic capacity of developed nations. This drop in economic power led to political shifts, but one of the subtlest is the slow movement away from environmental protection by developed nations. The European Union (EU), typically the impetus behind global environmental protection efforts, is known for investing heavily in renewable energy sources as a means to accelerating future economic gains and sustainability. Recent efforts by the United Kingdom, however, are shifting the balance.
Prime Minister David Cameron recently announced that his administration could be eliminating 3,000 regulations with an estimated annual savings of 850 million pounds ($1.4 billion). Cameron, the leader of the British Conservative Party, introduced the new regulations to be cut as unnecessary impediments to businesses. Building codes, waste disposal rules, and environmental regulations are to be cut in the name of economic growth. Speaking on the new regulatory cuts, the prime minister spoke of his goal that the United Kingdom would “be a country that celebrates enterprise and backs risk takers.” Calling the initiative the “Red Tape Challenge,” the British government has firmly established an inverse relationship between regulation and economic growth. Reducing government debt, increasing economic productivity, and reducing unemployment are the main noted goals of the initiative. Having achieved an unemployment rate of 7.6 percent (the lowest in three years) in November 2013, politicians from both of the U.K.’s major parties want to maintain economic strides following the global recession.
The Conservative government’s newest effort to cut red tape is simply an extension of this drive to remove barriers to small business success. Small business growth, however, is also a primary target for the Labour Party. Speaking at the same conference where Cameron announced his regulatory cuts, Labour business secretary Chuka Umunna announced his party’s intention to create an agency to support the growth of small business in the U.K., similar to the United States Small Business Administration. These recent announcements from the two leading parties illustrate that small business growth in the U.K. has become as central to economic discussion as it is in the United States. Small business success is a recurring theme in American political discussion whenever new regulations are discussed. Regulations and small business success are seen as having a direct negative correlation with increasing government intervention gradually diminishing ability of small businesses to succeed.
Regulatory costs on small businesses increased by $70 billion in President Obama’s first term according to a recent report by the Heritage Foundation. Obamacare occupies most of the red tape debate in the US, unlike the UK where the National Health Service (NHS) does not factor into regulatory debates. Setting aside the healthcare debate, the relationship between environmental regulations and economic growth is a decision that every country faces individually but that also impacts the global environment.
Admittedly, the Red Tape Challenge does not seek to enact sweeping environmental deregulation in the U.K. Rather, the initiative mainly eliminates regulations such as building codes and poison licenses to control certain household cleaners. Environmental groups expressed concerns that the environmental regulatory cuts represented a step backwards, but the regulations to be eliminated are not central to environmental protection. Other policies, such as the expansion of the hydraulic fracking industry in the U.K., are more likely to introduce environmental protection concerns than regulations on flat-panel televisions. While the potential magnitude of pollution matters, the framing of the debate over environmental regulation does as well.
The UN’s Sustainable Development Goals are a set of objectives to guide the relationship between economic growth and environmental protection after 2015. Sustainable development is often used to describe the paths that countries like China must take as they strike a balance between rapid industrialization and environmental stewardship. While the environmental impacts of the Red Tape Challenge are not important on a global scale, the debate over them is. Developed countries such as the United Kingdom and United States help determine global priorities. Recent lobbying efforts by the U.K. defeated anti-fracking rules in the European Union, a body that is often the global leader in environmental efforts. Likewise, victories for economic growth that are directly tied to environmental regulatory cutbacks will further encourage emerging economies to make similar decisions. If the world’s largest economies cannot afford to follow international environmental protocols, then it is not likely that developing nations will feel they can either.
Countries with huge populations like China, India, Brazil, and Bangladesh are all growing economically much faster than developed nations. Pollution and greenhouse gases from these countries now threaten the global environment just as much as pollution from developed nations. World leaders like the U.S. and U.K. must consider their audience as they strike a balance between environmental regulation and economic growth. A decision to allow slightly more electricity consumption from televisions in the U.K. may not matter on the global scale, but when even such small decisions are replicated in other countries the consequences escalate quickly.
