Interview with Professor Esty
By Joan Veon
Chatham House London 2007


Joan Veon: Professor Esty, you have a long background in the environment working with the US Government and now in education. Could you help me understand your evolutionarily thinking in there the environment has come.

Professor Esty: I think what we're seeing here is a real sea change in attitudes towards environmental protection, first with regard to how society understands how progress gets made. We are moving away from a model that has really been dominant for 40 years where the government not only sets the standards but is the primary actor in doing the work of figuring out how we're going to protect the environment, what technologies we need, and how to development and then mandating very specifically to the industry world what they have to do in the way of technology for pollution control. We are shifting down to a model that is based more on economic incentives not command and control mandate. And then this new model it will involve both taxes for harms or charges for emissions that are causing harm as well as perhaps cap and trade pollution allowance systems. We are going to see the private sector taking a leading role in developing technologies. Government doesn't go away to be sure; they still need to set the standards, they still have an important role to play in structuring incentives for private sector action. But the business community will be the one to step up and really figure out what kind of technologies are possible and how to make them work.

Joan Veon: Given 40 years ago was the environment a capitalistic way of life that was evolving or did that evolve somewhere between 1992 and 2004?

Professor Esty: I think we are in sort of a slow roll revolution in terms of understanding about how best to pursue environmental protection. Since the Italian economist Pareto first talked about the need to internalize externalities, to make people pay for the harms they cause we’ve understand that it would valuable to have a capitalistic approach to environmental protection. Make people pay for the harms they cause and they will cause less harm. You will also create an incentive for people to produce solutions that can help us solve those problems. And think what has happened, and it really is a faster moving revolution in the corporate world, is that in the last year or two companies have begun to realize that the environment is not just a set of cost to bear or a set of regulations to follow but there is a real upside opportunity. That companies that can produce solutions, environmental goods and services and solve problems like climate change can make money doing it. And I think that is very exciting. And it has a lot of companies, from GE to a lot of small company stepping up to be environmental solutions providers.

Joan Veon: Would you say that on the other side of the spectrum from what you have explained, the new capitalistic marketing of the environment, are the radical environmentalist, Greenpeace, etc. are they doing more harm then good.

Professor Esty: I think you see a lot of groups like Greenpeace that are evolving with this changing perspective so Greenpeace understands now that there is a time or confrontation perhaps, some companies really don't get it, but they work with companies that are trying to do the right thing and are moving toward an improved environmental performance. So at the World Economic Forum in Davos in January, Greenpeace actually did a press conference with Coca-Cola to celebrate the fact that Coca-Cola had shifted entirely out of refrigeration based on clora flora carbons and I think Greenpeace was there along side Coca-Cola to say we can work together on some issues and we're going to. Having said that there are some elements of the environmental community who are no longer really I think relevant because they don't understand this changing world's and they will fall away because there is a new groups stepping up that get it and will play an important role in prodding business but do so in a constructive fashion

Joan Veon: What was the role of the early environmentalist in 1972 to 1992 verses today?

Professor Esty: The environmentalist of that period of the late 60s into the 70s did an enormous service and we owe them a great debt of gratitude, because they raised the flag they told us there were problems that needed to be addressed they got society to pay attention and I think they got us on the path to where we are now. I think the progress that was made in that era has somewhat ground to a halt and we have really done very little in the last decade or 15 years because they think the model was a tired one; it didn’t have this ability to harness this engine of capitalism and really use that as the driver for environmental progress

Joan Veon: Therefore is the Agenda 21 dead in the water because of rules and regulations?

Professor Esty: Agenda 21 is really a valuable compilation of the full spectrum of things that we need to think about in the realm of pollution control and natural resource management. But because it is so comprehensive it's not really an action agenda and frankly it doesn't really serve the same purpose in a world where private markets are going to help drive us toward environmental solutions so I think government setting standards on things like greenhouse emissions, making companies pay a price for the harms they cause, is a critical next step to getting us going on the path toward solving the climate change problems, getting innovation going, harnessing the entrepreneurial spirit that exists in America and across the world. And I think what's exciting is to see how this that is happening across the next couple years