The New Wealth of Nations:
How to Make Industrial Ecology Work in a Free Market Economy

Introduction

Sustainable development has been a social watchword for more than 40 years. Spurred into the public consciousness by worldwide ecological disasters in the 1960s and 1970s, government response focused on fixing pollution problems that had ‘killed’ Lake Erie, caused the Rhine River to turn red after a fire and massive pesticide spill from a chemical factory in Switzerland, made the Los Angeles sky perpetually brown, poisoned the Japanese with mercury in the water supply and caused the near extinction of the bald eagle through persistence of DDT in the food chain. The Environmental Protection Agency (EPA) was born of these crises in 1970, and has not moved much from its original mission to clean up and regulate so-called “end-of-pipe” emissions (EPA Historical, 1992).

This was a naive, if logical response, because it dealt primarily with the symptoms

Paul Paetz

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Text Box: Abstract Currently one sixth of the world’s population — about a billion people — live in developed countries. Those people account for over 75% of the world’s energy and resource consumption, and the majority of the burden placed on the planet by industrial, consumer and toxic wastes. Fortunately, advanced technology and stringent environmental regulation in developed countries means they account for a small percentage of total pollution (Hart, 1997). This gives hope that if we apply our technological prowess to the more difficult problem of sustainable development, we can conquer that as well, and become even more prosperous in the process. However, as the world population grows by nearly 100 million people per year, so do the stresses we place on the planet’s carrying capacity (United Nations, 2004). Although sustainable development is a critical objective for the entire world, there is no country where it is more imperative than in the United States. Yet in America, the birthplace of capitalism and free markets, environmentalists and industrialists are deeply suspicious of each other and seem unable to find common ground because of philosophical and political differences. As a result, escaping the horns of this dilemma requires a uniquely American solution. Free market economics must be married to Industrial Ecology to create a successful public policy. This paper outlines such a strategy.

A cornucopia of industrial wealth, jobs, improved standard of living and healthier environment will come from adopting a national strategy to marry free market principles to sustainable development using Industrial Ecology.

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