Saturday, October 9, 2010

Hungarian Sludge

The environmental disaster in Hungary is sounding worse again, with another reservoir wall about to collapse. Any kind of mudslide is devastating enough, as we saw in southern Mexico last month, but these seem particularly scary, carrying toxics and heavy metals that are likely to cause lasting damage. The tributary "Marcal river is dead," according to one piece, and the effects on the Danube are still unclear.

Of course our first thoughts are with the victims, both those lost in the first release and those affected by the devastation to the environment. Our second thoughts, echoed by the Hungarian prime minister, are about how this could have come about. Eastern Europe under the Soviet Union was notorious for pollution; pictures like this one of Copsa Mica, Romania came out after the collapse of the USSR showing how industrial development had not been followed by environmental protection. The situation in general has been better under capitalism, but only when regulation has been effective. You don't have to remember back too far to the Tennessee Coal Ash flood around Christmas of 2008 or of course the Gulf oil spill a few months ago, which reemphasized how ineffective our government can be.

One popular idea from environmental economics is the Environmental Kuznets Curve. It's basically the idea that as countries get richer they first get dirtier, as they industrialize, and then get cleaner, as people are able to turn their attention to the state of the environment and complain about it. My former professor Michael Hanemann is skeptical of the EKC, and with good reason: while it's been found occasionally, it seems a stretch to assume that things will get cleaner on their own as people get richer. It seems more likely that governance is the key: we need a government that is both responsive to problems and effective as it engages them. These days our public discourse seems to focus on failures of government, and that's appropriate, but the solution is not to gut it completely, or we'll end up with more of these disasters.

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