TWO Saving the Crusade: The High Cost of Our Environmental Future – Peter F. Drucker on Nonprofits and the Public Sector

CHAPTER TWO

Saving the Crusade

The High Cost of Our Environmental Future

EVERYBODY TODAY IS “FOR THE ENVIRONMENT.” Laws and agencies destined to protect it multiply at all levels of government. Big corporations take full-color ads to explain how they’re cleaning up, or at least trying to. Even you as a private citizen probably make some conscientious effort to curb pollution. At the same time, we have learned enough about the problem to make some progress toward restoring a balance between man and nature.

Yet the crusade is in real danger of running off the tracks, much like its immediate predecessor, the so-called war on poverty. Paradoxically, the most fervent environmentalists may be among the chief wreckers. Many are confused about the cause of our crisis and the way in which we might resolve it. They ignore the difficult decisions that must be made; they splinter the resources available for attacking environmental problems. Indeed, some of our leading crusaders seem almost perversely determined to sabotage their cause—and our future.

Consider, for example, the widespread illusion that a clean environment can be obtained by reducing or even abolishing our dependence on “technology.” The growing pollution crisis does indeed raise fundamental questions about technology—its directions, uses, and future. But the relationship between technology and the environment is hardly as simple as much anti-technological rhetoric would have us believe. The invention that has probably had the greatest environmental impact in the past twenty-five years, for instance, is that seemingly insignificant gadget, the wire-screen window. The wire screen, rather than DDT or antibiotics, detonated the “population explosion” in underdeveloped countries, where only a few decades ago as many as four out of five children died of such insect-borne diseases as “summer diarrhea” or malaria before their fifth birthday. Would even the most ardent environmentalist outlaw the screen window and expose those babies again to the flies?

The truth is that most environmental problems require technological solutions—and dozens of them. To control our biggest water pollutant, human wastes, we will have to draw on all sciences and technologies from biochemistry to thermodynamics. Similarly, we need the most advanced technology for adequate treatment of the effluents that mining and manufacturing spew into the world’s waters. It will take even more new technology to repair the damage caused by the third major source of water pollution in this country—the activities of farmers and loggers.

Even the hope of genuine disarmament—and the arms race may be our worst and most dangerous pollutant—rests largely on complex technologies of remote inspection and surveillance. Environmental control, in other words, requires technology at a level at least as high as the technology whose misuse it is designed to correct. The sewage-treatment plants that are urgently needed all over the world will be designed, built, and kept running not by purity of heart, ballads, or Earth Days but by crew-cut engineers working in very large organizations, whether businesses, research labs, or government agencies.

Who Will Pay?

The second and equally dangerous delusion abroad today is the common belief that the cost of cleaning the environment can be paid for out of “business profits.” After taxes, the profits of all American businesses in a good year come to sixty or seventy billion dollars. And mining and manufacturing—the most polluting industries—account for less than half of this. But at the lowest estimate, the cleanup bill, even for just the most urgent jobs, will be three or four times as large as all business profits.

Consider the most efficient and most profitable electric-power company in the country (and probably in the world): the American Power Company, which operates a number of large power systems in the Midwest and upper South. It has always been far more ecology-minded than most other power companies, including the government’s own TVA. Yet cleaning up American Power’s plants to the point where they no longer befoul air and water will require, for many years to come, an annual outlay close to, if not exceeding, the company’s present annual profit of $100 million. The added expense caused by giving up strip mining of coal or by reclaiming strip-mined land might double the company’s fuel bill, its single largest operating cost. No one can even guess what it would cost—if and when it can be done technologically—to put power transmission lines underground. It might well be a good deal more than power companies have ever earned.

We face an environmental crisis because for too long we have disregarded genuine costs. Now we must raise the costs, in a hurry, to where they should have been all along. The expense must be borne, eventually, by the great mass of the people as consumers and producers. The only choice we have is which of the costs will be borne in the form of higher prices, and which in the form of higher taxes.

It may be possible to convert part of this economic burden into economic opportunity, though not without hard work and, again, new technology. Many industrial or human wastes might be transformed into valuable products. The heat produced in generating electricity might be used in greenhouses and fish farming, or to punch “heat holes” into the layer of cold air over such places as Los Angeles, creating an updraft to draw off the smog. But these are long-range projects. The increased costs are here and now.

Closely related to the fallacy that “profit” can pay the environmental bill is the belief that we can solve the environmental crisis by reducing industrial output. In the highly developed affluent countries of the world, it is true that we may be about to deemphasize the “production orientation” of the past few hundred years. Indeed, the “growth sectors” of the developed economies are increasingly education, leisure activities, or health care rather than goods. But paradoxical as it may sound, the environmental crisis will force us to return for several decades to an emphasis on both growth and industrial output.

Overlooked Facts of Life

There are three reasons for this, each adequate in itself.

1. Practically every environmental task demands huge amounts of electrical energy, way beyond anything now available. Sewage treatment is just one example: the difference between the traditional and wholly inadequate methods and a modern treatment plant that gets rid of human and industrial wastes and produces reasonably clear water is primarily electric power, and vast supplies of it. This poses a difficult dilemma. Power plants are themselves polluters. And one of their major pollution hazards, thermal pollution, is something we do not yet know how to handle.

Had we better postpone any serious attack on other environmental tasks until we have solved the pollution problems of electric-power generation? It would be a quixotic decision, but at least it would be a deliberate one. What is simply dishonest is the present hypocrisy that maintains we are serious about these other problems—industrial wastes, for instance, or sewage or pesticides—while we refuse to build the power plants we need to resolve them. I happen to be a member of the Sierra Club, America’s oldest and largest environmental group. I share its concern for the environment. But the Sierra Club’s opposition to any new power plant today—and the opposition of other groups to new power plants in other parts of the country (e.g., New York City)—has, in the first place, ensured that other ecological tasks cannot be done effectively for the next five or ten years. Secondly, it has made certain that the internal combustion engine is going to remain our mainstay in transportation for a long time to come. An electrical automobile or electrified mass transportation—the only feasible alternatives—would require an even more rapid increase in electrical power than any now projected. And thirdly, it may well, a few years hence, cause power shortages along the Atlantic Coast, which would mean unheated homes in winter, as well as widespread industrial shutdowns and unemployment. This would almost certainly start a “backlash” against the whole environmental crusade.

2. No matter how desirable a deemphasis on production might be, the next decade is the wrong time for it in all the developed countries and especially in the United States. The next decade will bring a surge in employment-seekers and in the formation of young families—both the inevitable result of the baby boom of the late forties and early fifties. Young adults need jobs; and unless there is a rapid expansion of jobs in production there will be massive unemployment, especially of low-skilled blacks and other minority group members. In addition to jobs, young families need goods—from housing and furniture to shoes for the baby. Even if the individual family’s standard of consumption goes down quite a bit, total demand—barring only a severe depression—will go up sharply. If this is resisted in the name of ecology, environment will become a dirty word in the political vocabulary.

3. If there is no expansion of output equal to the additional cost of cleaning up the environment, the cost burden will—indeed, must—be met by cutting the funds available for education, health care, or the inner city, thus depriving the poor. It would be nice if the resources we need could come out of defense spending. But of the 6 or 7 percent of our national income that now goes for defense, a large part is cost of past wars, that is, veterans’ pensions and disability benefits (which, incidentally, most other countries do not include in their defense budgets—a fact critics of “American militarism” often ignore). Even if we could—or should—cut defense spending, the “peace dividend” is going to be 1 or 2 percent of national income, at best.

But the total national outlay for education (7 to 8 percent), health care (another 7 to 8 percent), and the inner city and other poverty areas (almost 5 percent) comes to a fifth of total national income today. Unless we raise output and productivity fast enough to offset the added environmental cost, the voters will look to this sector for money. Indeed, in their rejection of school budgets across the nation and in their desperate attempts to cut welfare costs, voters have already begun to do so. That the shift of resources is likely to be accomplished in large part through inflation—essentially at the expense of the lower-income groups—will hardly make the environmental cause more popular with the poor.

The only way to avoid these evils is to expand the economy, probably at a rate of growth on the order of 4 percent a year for the next decade, a higher rate than we have been able to sustain in this country in the postwar years. This undoubtedly entails very great environmental risks. But the alternative is likely to mean no environmental action at all, and a rapid public turn—by no means confined to the “hard hats”—against all environmental concern whatever.

Making Virtue Pay

The final delusion is that the proper way to bring about a clean environment is through punitive legislation. We do need prohibitions and laws forbidding actions that endanger and degrade the environment. But more than that, we need incentives to preserve and improve it.

Punitive laws succeed only if the malefactors are few and the unlawful act is comparatively rare. Whenever the law attempts to prevent or control something everybody is doing, it degenerates into a huge but futile machine of informers, spies, bribe givers, and bribe takers. Today every one of us—in the underdeveloped countries almost as much as in the developed ones—is a polluter. Punitive laws and regulations can force automobile manufacturers to put emission controls into new cars, but they will never be able to force 100 million motorists to maintain this equipment. Yet this is going to be the central task if we are to stop automotive pollution.

What we should do is make it to everyone’s advantage to reach environmental goals. And since the roots of the environmental crisis are so largely in economic activity, the incentives will have to be largely economic ones as well. Automobile owners who voluntarily maintain in working order the emission controls of their cars might, for instance, pay a much lower automobile registration fee, while those whose cars fall below accepted standards might pay a much higher fee. And if they were offered a sizable tax incentive, the automobile companies would put all their best energies to work to produce safer and emission-free cars, rather than fight delaying actions against punitive legislation.

Despite all the rhetoric on the campuses, we know by now that “capitalism” has nothing to do with the ecological crisis, which is fully as severe in the Communist countries. The bathing beaches for fifty miles around Stockholm have become completely unusable because of the raw, untreated sewage from Communist Leningrad that drifts across the narrow Baltic. Moscow, even though it still has few automobiles, has as bad an air-pollution problem as Los Angeles—and has done less about it so far.

We should also know that “greed” has little to do with the environmental crisis. The two main causes are population pressures, especially the pressures of large metropolitan populations, and the desire—a highly commendable one—to bring a decent living at the lowest possible cost to the largest possible number of people.

The environmental crisis is the result of success—success in cutting down the mortality of infants (which has given us the population explosion), success in raising farm output sufficiently to prevent mass famine (which has given us contamination by insecticides, pesticides, and chemical fertilizers), success in getting people out of the noisome tenements of the nineteenth-century city and into the greenery and privacy of the single-family home in the suburbs (which has given us urban sprawl and traffic jams). The environmental crisis, in other words, is very largely the result of doing too much of the right sort of thing.

To overcome the problems success always creates, one has to build on it. The first step entails a willingness to take the risks involved in making decisions about complicated and perilous dilemmas:

  • What is the best “trade-off” between a cleaner environment and unemployment?
  • How can we prevent the environmental crusade from becoming a war of the rich against the poor, a new and particularly vicious “white racist imperialism”?
  • What can we do to harmonize the worldwide needs of the environment with the political and economic needs of other countries, and to keep Western leadership from becoming Western aggression?
  • How can we strike the least agonizing balance of risks between environmental damage and mass starvation of poor children, or between environmental damage and large-scale epidemics?
An Environmental Crime?

More than twenty years ago, three young chemical engineers came to seek my advice. They were working for one of the big chemical companies, and its managers had told them to figure out what kind of new plants to put into West Virginia, where poverty was rampant. The three young men had drawn up a long-range plan for systematic job creation, but it included one project about which their top management was very dubious—a ferroalloy plant to be located in the very poorest area where almost everybody was unemployed. It would create 1,500 jobs in a dying small town of 12,000 people and another 800 jobs for unemployed coal miners—clean, healthy, safe jobs, since the new diggings would be strip mines.

But the plant would have to use an already obsolete high-cost process, the only one for which raw materials were locally available. It would therefore be marginal in both costs and product quality. Also the process was a singularly dirty one, and putting in the best available pollution controls would make it even less economical. Yet it was the only plant that could possibly be put in the neediest area. What did I think?

I said, “Forget it”—which was, of course, not what the three young men wanted to hear and not the advice they followed.

This, as some readers have undoubtedly recognized, is the prehistory of what has become a notorious “environmental crime,” the Union Carbide plant in Marietta, Ohio. When first opened in 1951, the plant was an “environmental pioneer.” Its scrubbers captured three quarters of the particles spewed out by the smelting furnaces; the standard at the time was half of that or less. Its smokestacks suppressed more fly ash than those of any other power plant then built, and so on.

But within ten years the plant had become an unbearable polluter to Vienna, West Virginia, the small town across the river whose unemployment it was built to relieve. And for five years thereafter the town and Union Carbide fought like wildcats. In the end Union Carbide lost. But while finally accepting federal and state orders to clean up an extremely dirty process, it also announced that it would have to lay off half the 1,500 men now working in the plant—and that’s half the people employed in Vienna. The switch to cleaner coal (not to mention the abandonment of strip mining) would also put an end to the 800 or so coal-mining jobs in the poverty hollows of the back country.

There are scores of Viennas around the nation, where marginal plants are kept running precisely because they are the main or only employer in a depressed or decaying area. Should an uneconomical plant shut down, dumping its workers on the welfare rolls? Should the plant be subsidized (which would clearly open the way for everybody to put his hand in the public till)? Should environmental standards be disregarded or their application postponed in “hardship” cases?

If concern for the environment comes to be seen as an attack on the livelihood of workers, public sympathy and political support for it is likely to vanish. It is not too fanciful to anticipate, only a few years hence, the New (if aging) Left, the concerned kids on the campus, and the ministers in a protest march against “ecology” and in support of “the victims of bourgeois environmentalism.”

Third World Ecology

In the poor, developing countries where men must struggle to make even a little progress in their fight against misery, any industry bears a heavy burden of high costs and low productivity. Burdening it further with the cost of environmental control might destroy it. Moreover, development in these countries—regardless of their political creed or social organization, in Mao’s as well as in Chiang Kai-shek’s China and in North as well as in South Vietnam—cannot occur without the four biggest ecological villains: a rapid increase in electric power, chemical fertilizers and pesticides, the automobile, and the large steel mill.

That poor countries regard those villains as economic saviours confronts us with hard political choices. Should we help such countries get what they want (industrialization), or what we think the world needs (less pollution)? How do we avoid the charge, in either case, that our help is “imperialistic”? To complicate matters, there is a looming conflict between environmental concern and national sovereignty. The environment knows no national boundaries. Just as the smog of England befouls the air of Norway, so the chemical wastes of the French potash mines in Alsace destroy the fish of the lower Rhine in Belgium and Holland.

No matter what the statistics bandied about today, the United States is not the world’s foremost polluter. Japan holds this dubious honor by a good margin. No American city can truly compete in air pollution with Tokyo, Milan, Budapest, Moscow, or Düsseldorf. No American river is as much of an open sewer as the lower Rhine, the Seine, or the rivers of the industrial Ukraine such as the lower Dnieper. And we are sheer amateurs in littering highways compared to the Italians, Danes, Germans, French, Swedes, Swiss, and Austrians—although the Japanese, especially in littering mountainsides and camp grounds, are clearly even more “advanced.”

If not the worst polluter, however, the United States is clearly the largest one. More important, as the most affluent, most advanced, and biggest of the industrial countries, it is expected to set an example. If we do not launch the environmental crusade, no one else will.

We shall have to make sure, however, that other nations join with us. In the absence of international treaties and regulations, some countries—especially those with protectionist traditions, such as Japan, France, and even the United States—may be tempted to impose ecological standards on imports more severe than those they demand of their own producers. On the other hand, countries heavily dependent on exports, especially in Africa and Latin America, may try to gain a competitive advantage by lax enforcement of environmental standards.

One solution might be action by the United Nations to fix uniform rules obliging all its members to protect the environment: and such action is, in fact, now under official study. The United States might help by changing its import regulations to keep out goods produced by flagrant polluters—allowing ample time for countries with severe poverty and unemployment problems to get the cleanup under way. We have good precedent for such an approach in our own history. Forty years ago we halted the evils of child labor by forbidding the transportation in interstate commerce of goods produced by children.

Such a course, however, will demand extraordinary judgment. Unless we persuade other nations to join with us—and set an example ourselves—we may well be accused of trying again to “police the world.”

Choosing the Lesser Evils

The hardest decisions ahead are even more unprecedented than those we have been discussing. What risks can we afford to take with the environment, and what risks can we not afford to take? What are the feasible trade-offs between man’s various needs for survival?

Today, for example, no safe pesticides exist, nor are any in sight. We may ban DDT, but all the substitutes so far developed have highly undesirable properties. Yet if we try to do without pesticides altogether, we shall invite massive hazards of disease and starvation the world over. In Ceylon, where malaria was once endemic, it was almost wiped out by large-scale use of DDT: but in only a few years since spraying was halted, the country has suffered an almost explosive resurgence of the disease. In other tropical countries, warns the UN Food and Agricultural Organization, children are threatened with famine because of insect and blight damage to crops resulting from restrictions on spraying. Similarly, anyone who has lately traveled the New England Turnpike will have noticed whole forests defoliated by the gypsy moth, now that we have stopped aerial spraying.

What is the right trade-off between the health hazard to some women taking the pill and the risk of death to others from abortions? How do we balance the thermal and radiation dangers of nuclear power plants against the need for more electricity to fight other kinds of pollution? How should we choose between growing more food for the world’s fast-multiplying millions and the banning of fertilizers that pollute streams, lakes, and oceans?

Such decisions should not be demanded of human beings. None of the great religions offers guidance. Neither do the modern “isms,” from Maoism to the anarchism popular with the young. The ecological crisis forces man to play God. Despite the fact that we are unequal to the task, we can’t avoid it: the risks inherent in refusing to tackle these problems are the greatest of all. We have to try, somehow, to choose some combination of lesser evils; doing nothing invites even greater catastrophe.

Where to Start

Cleaning up the environment requires determined, sustained effort with clear targets and deadlines. It requires, above all, concentration of effort. Up to now we have had almost complete diffusion. We have tried to do a little bit of everything—and tried to do it in the headlines—when what we ought to do first is draw up a list of priorities in their proper order.

First on such a list belong a few small but clearly definable and highly visible tasks that can be done fairly fast without tying up important resources. Removing the hazard of lead poisoning in old slum tenements might be such an action priority. What to do is well known: burn off the old paint. A substantial number of underemployed black adolescents could be easily recruited to do it.

Once visible successes have been achieved, the real task of priority-setting begins. Then one asks: (1) What are the biggest problems that we know how to solve, and (2) what are the really big ones that we don’t know how to solve yet? Clean air should probably head the first list. It’s a worldwide problem, and getting worse. We don’t know all the answers, but we do have the technological competence to handle most of the problems of foul air today. Within ten years we should have real results to show for our efforts.

Within ten years, too, we should get major results in cleaning up the water around big industrial cities and we should have slowed (if not stopped) the massive pollution of the oceans, especially in the waters near our coastal cities.

As for research priorities, I suggest that the first is to develop birth-control methods that are cheaper, more effective, and more acceptable to people of all cultures than anything we now have. Secondly, we need to learn how to produce electric energy without thermal pollution. A third priority is to devise ways of raising crops for a rapidly growing world population without at the same time doing irreversible ecological damage through pesticides, herbicides, and chemical fertilizers.

Until we get the answers, I think we had better keep on building power plants and growing food with the help of fertilizers and such insect-controlling chemicals as we now have. The risks are well known, thanks to the environmentalists. If they had not created a widespread public awareness of the ecological crisis, we wouldn’t stand a chance. But such awareness by itself is not enough. Flaming manifestos and prophecies of doom are no longer much help, and a search for scapegoats can only make matters worse.

What we now need is a coherent, long-range program of action and education of the public and our lawmakers about the steps necessary to carry it out. We must recognize—and we need the help of environmentalists in this task—that we can’t do everything at once: that painful choices have to be made, as soon as possible, about what we should tackle first; and that every decision is going to involve high risks and costs, in money and in human lives. Often these will have to be decisions of conscience as well as economics. Is it better, for example, to risk famine or to risk global pollution of earth and water? Any course we adopt will involve a good deal of experimentation—and that means there will be some failures. Any course also will demand sacrifices, often from those least able to bear them: the poor, the unskilled, and the underdeveloped countries. To succeed, the environmental crusade needs support from all major groups in our society, and the mobilization of all our resources, material and intellectual, for years of hard, slow, and often discouraging effort. Otherwise it will not only fail: it will, in the process, splinter domestic and international societies into warring factions.

Now that they have succeeded in awakening us to our ecological peril, I hope the environmentalists will turn their energies to the second and harder task: educating the public to accept the choices we must face, and to sustain a worldwide effort to carry through on the resulting decisions. The time for sensations and manifestos is about over: now we need rigorous analysis, united effort, and very hard work.


First published in Harper’s Magazine, January 1972.