The growing importance of economic freedom


It goes without saying that Olympic athletes need clean air to perform at their best. So for this year’s Winter Games, China used the same trick it unveiled before the 2008 Summer Games: it shut down heavy industry production for a few weeks before and during the competition to allow pollutants to escape.

The autocratic government in Beijing does the same whenever a major event takes place in the city. “China often orders factory shutdowns to reduce air pollution, including during the Asia-Pacific Economic Cooperation (APEC) forum in 2014, which resulted in rare days of clear skies dubbed ‘APEC blue’ , explained the Hong Kong-based South China Morning Post in December.

There’s a lesson here: if you want clean air for a few weeks, an autocratic government may be the way to go. But what if you think everyone, not just Olympic athletes, deserves clean air every day? China is not doing so well.

“According to US Embassy monitoring data, there was an average of 40.5 micrograms of PM2.5 particles per cubic meter in the air in Beijing in 2021,” Statista reported this year. To be fair, that’s an improvement from a decade earlier, when the Embassy measured over 100 micrograms of PM2.5. But that’s a far cry from American air, which averaged just over 8 micrograms of PM2.5 in 2020.

It’s the pollution you can see.

>>> The right way to ensure a cleaner environment

When it comes to invisible but significant carbon dioxide emissions, China does even worse. “China emitted 10.67 billion metric tons of carbon dioxide emissions in 2020, making it by far the world’s biggest polluter that year,” Statista notes. China gave the world the COVID virus, which lowered CO2 emissions almost everywhere else that year, but those emissions somehow jumped in China anyway. Meanwhile, “in 2020, U.S. greenhouse gas emissions totaled 5,215.6 million metric tons of carbon dioxide equivalents after accounting for land sector sequestration,” reported the EPA. “Greenhouse gas emissions in 2020 (after accounting for land sector sequestration) were 22% lower than 2005 levels.”

We are going in the right direction and China is going in the wrong direction. The difference is economic freedom.

“Freer economies are cleaner economies. Many indicators that measure a country’s overall economic freedom—property rights, investment freedom, commercial freedom, and strong institutions—are critical to environmental progress,” C3 Solutions wrote last year in its landmark report “Free Economies Are Clean Economies” which compared data from the Heritage Foundation’s Index of Economic Freedom with the Yale Environmental Performance Index. “The right economic and political environment cultivates a system that rewards innovation, efficiency and management. A system rooted in economic freedom generates more wealth for individuals and societies, so they can invest in environmental protection.

C3 Solutions will update the Free Economies are Clean Economies report later this year based on new data from Heritage and Yale. Just last week, The Heritage Foundation released its 2022 Index of Economic Freedom in Singapore, which ranked 1st in the rankings. The Index of Economic Freedom seeks to determine where economic freedom is thriving and where it is languishing. Congratulations to Singapore!

As for China, the 2022 index places China in the “repressed” category, placing it 158th among the freest countries in the world. “Protection and enforcement of property rights are weak. All land in China is owned either by the state or by rural communities. Land seizures are common,” notes the Index. This is a place where economic freedom matters.

>>> Climate change is best fought through economic freedom

People take care of what they own, like their car or their house. They don’t pay attention to other people’s business. Due to what economists call the “tragedy of the commons,” individuals in China have no reason to protect the environment because they cannot control property. Economic freedom pays dividends to owners.

On Heritage’s Index, the United States fares much better, although progress can still be made. “Pulled down by a sharp decline in its fiscal health score, the United States has seen an overall loss of economic freedom of 3.0 points since 2017 and has fallen from the top half to the bottom half of the category” Mostly Free,” the Index points out. “Business freedom and the rule of law are strong, but the economy is crushed by reckless government overspending.” The United States is not doing as well as it used to and not as well as it should, but with more principled spending at the federal level, we can quickly raise our score.

As the Free Economies Report concludes, “there is no greater source of environmental injustice in the world today than central planning.” Economic freedom offers a cleaner environment today as it promises a better environment in the future. To reduce global emissions while promoting human prosperity, the world will need solutions rooted in economic freedom. By expanding economic freedom, the solutions are endless. Let’s start.


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