Environmental Economics

Our economy is based on natural resources, yet many "conservatives" are unwilling to conserve these resources to ensure a steady economy for our children and grandchildren. They fail to see the obvious economic threat created by the rapid depletion of fuel, water, soil, forests, fisheries, land and minerals. They also fail to understand the economic value of genetic diversity in wild plants and animals.

These attitudes must change, to encourage planning for a sustainable future. It is important to remember that recreation is not a frivolous past-time – it is big business in Wisconsin. Residents and tourists enjoy the waters, woods and wildlife, and our special environmental qualities also help to attract and keep talented business leaders and investment in our state. "Quality of Life" is a major selling point to entrepreneurs considering a move to Wisconsin.

According to the 2011 National Survey of Fishing, Hunting and Wildlife-Wisconsin, outdoor recreation activities have an enormous impact on Wisconsin's economy: Fishing, hunting and wildlife watching activities generate $5.5 billion in economic output in Wisconsin. (That same year, cash receipts from milk were $5.2 billion.) These activities support about 96,000 jobs, generate $640 million in annual state and local tax revenue, and produce over $7.5 billion in retail sales and services.

The Wisconsin Department of Natural Resources and U.S. Fish & Wildlife Service report:

  • An estimated half million people come to our state each year to watch wildlife;
  • 20% of Wisconsin adults fish; this is twice the national average.
  • Wisconsin sold more resident hunting licenses, tags, permits, and stamps combined than any other state. (2017) – 90% of revenue to manage the state’s fish and wildlife resources comes from hunting, fishing, and trapping license fees and federal excise tax on the sale of hunting and fishing equipment.
  • Wisconsin was ranked #3 in non-resident fishing destinations by visiting anglers; just below Florida and Michigan.
  • Great lakes fishing generates more than $210 million to local communities;
  • Horicon Marsh is renowned for its migrant flock of Canada geese, and is also home to more than 305 kinds of birds;
  • Wisconsin's hunters and anglers spend $3.9 billion in annual fishing and hunting expenditures.
  • A much higher proportion of Wisconsinites participate in outdoor recreation activities than the national average;
  • 3.5 million Wisconsin residents and nonresidents fished, hunted, or watched wildlife in Wisconsin, and spent $5.5 billion dollars on wildlife recreation.

Public interest surveys show Wisconsin citizens place a high value on natural resource management and outdoor recreation, rating it over 9 on a scale of 1 to 10. A majority of the public ranked conservation as a higher priority for Wisconsin than activities such as road building and maintenance, rural development loans and grants, and building prison facilities. They also show:

  • 87% of respondents expressed “great” or “moderate” interest in WI fish and wildlife.
  • 95% of respondents “strongly” or “moderately” agreed that public lands benefit all citizens of the state.
  • 96% of respondents agreed that thriving fish and wildlife populations provide a significant benefit to the state’s economy.

Jobs vs. the Environment

Business leaders often claim that strict environmental regulations are bad for Wisconsin's economy, but several studies indicate the opposite.

States with the best environmental records also offer the best job opportunities and climate for long-term economic development. That's the conclusion of a study released by the Institute for Southern Studies, a non-profit research center in Durham, North Carolina. Chris Kromm, a co-author of the report and Director of the Institute says, "What this study finds is that the trade-off myth is untrue. At the state policy level, efforts to promote a healthy environment and a sound economy go hand-in-hand."

The study, “Gold and Green (2000),” used two separate lists of indicators to evaluate each state's economic performance, and the stresses on the natural environment. The 20 economic indicators include annual pay, job opportunities, business start-ups, and workplace injury rates. The 20 environmental measures range from toxic emissions and pesticide use, to energy consumption and urban sprawl. The report ranks states on each indicator, and the sum of ranks produces a state's final score. Comparing the two lists reveals correlations:

Seven states rank in the top 15 for both economic and environmental health: Vermont, Rhode Island and Minnesota rank in the top six on both lists; other "top performers" with high marks on both scales are Colorado, Maryland, Maine, and Wisconsin.

In contrast, 10 states - mostly in the South - are among the worst 15 on both lists. Louisiana ranks 48th on economic performance and 50th on the environment. Others in the cellar are: Alabama, Texas, Tennessee, Mississippi, Indiana, Arkansas, West Virginia, Kentucky, and South Carolina.

Study co-author Keith Ernst says, "States that sacrifice their natural resources for quick-fix development aren't improving their long-term economic prospects."

In a series of studies over a decade's time, Professor Paul Templet has analyzed all 50 states and found that those with lax environmental enforcement are the economically poorest states in the union. He also found that corporate subsidies and tax breaks distorted the economic picture. Dr. Templet, Secretary of the Louisiana Department of Environmental Quality from 1988 to 1992, is now professor of environmental studies at Louisiana State University.

In 2011, the Obama administration established the first ever national limits for mercury and other toxic air pollution from power plants, which will prevent up to 11,000 premature deaths, 4,700 deaths and 130,000 cases of childhood asthma symptoms each year. This rule follows a series of EPA actions to reduce emissions from the power plants and other large emitters, including a rule to cut soot and smog forming pollution from power plants that create health problems downwind, and rules to limit mercury and other pollution for the largest sources of industrial air pollution, such as cement plants, industrial boilers and waste incinerators. Taken together, they will provide significant economic benefit in terms of reduced health and environmental impacts and costs. This is estimated to provide annual benefits of up to $1.8 billion and prevent 200 premature deaths by 2016 for Wisconsin residents.

The Cost of Regulations

According to the U.S. Environmental Protection Agency (EPA), pollution control costs run a modest 1-3 percent of sales in most industries. And, a focus on reducing waste costs has led industrial leaders to adopt new manufacturing processes that are increasingly efficient, thereby reducing waste and increasing profits.

Clearly, when an industry announces it is shutting down a local mill, it's not due to pollution control costs. In Wisconsin, the paper industry has allowed its mills, many of which are more than 70 years old, to gradually degrade without capital investments in new, modern equipment. They've simply repaired the old machines to keep them running. The corporations took their profits elsewhere, to other countries and regions, and are now on the verge of closing more Wisconsin mills.

When paper companies move production to the southern U.S., several factors are influencing this shift. Trees grow faster down south. The U.S. population has shifted to the south and west, causing the industry to move closer to its markets. Southern ocean-going ports can receive much larger ships directly from South America, where many pulp operations have relocated, making pulp imports more direct. Some states are in bidding wars, offering huge incentives to lure investments. In some cases, southern workers are willing to accept lower wages and benefits, or work without union representation.

When paper companies move overseas, labor and benefit costs drop drastically. Employee wages and benefits are a major percentage of total production costs, making it very difficult for American workers to compete. Environmental regulations have little influence over this choice.

In addition, the U.S. is facing serious competition from Chinese manufacturers because China has kept the value of its currency artificially low, making Chinese imports artificially cheaper than American products. The U.S. government has called on the Chinese to end this unfair manipulation and to allow Chinese currency to fluctuate naturally with the international monetary market. Environmental regulations are not relevant to this problem.

Benefits of Regulations

Clean air, clean water and the safe use and disposal of hazardous chemicals produce enormous economic, as well as environmental, benefits, according to the EPA.

Clean water efforts result in a boon to the economy. In addition to health care savings, clean water is the backbone of the nation's $45 billion commercial fishing and shellfish industry, and a key component of the nation’s tourism industry, which generates $2 trillion in economic output.

Pollution control has become a major growth industry of its own, this year generating a whopping $300 billion worldwide market for environmental technology and producing 1.3 million U.S. jobs. Wisconsin environmental industries generate $5.4 billion and the number of environment-related jobs in the state totaled more than 97,000.


Jobs and Environment Initiative Report 2004 - http://www.misi-net.com/publications/wi-environmental.pdf

2011 National Survey of Fishing, Hunting and Wildlife- Associated Recreation-Wisconsin - https://www.census.gov/prod/2013pubs/fhw11-wi.pdf

Revenue Options for Wisconsin Fish, Wildlife, and Habitat Management - https://docs.legis.wisconsin.gov/misc/lfb/jfc/200_reports/2017_01_03_natural_resources_revenue_option_for_fish_and_wildlife.pdf

2013 Wisconsin Agricultural Statistics - https://www.nass.usda.gov/Statistics_by_State/Wisconsin/Publications/Annual_Statistical_Bulletin/bulletin2013_web.pdf

Union of Concerned Scientist Reports - http://www.ucsusa.org/search/reports/environmental%20economics#.Vnq_EvkrK00

© Clean Water Action Council

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