Are the best things in life really free? If you’re a sincere environmentalist, the best you could do for Mother Nature is to make sure some things aren’t free.
Activists—the kind who thronged Copenhagen last year—insist the environment will be cleaner once alternative fuels get more subsidies. We think, though, that India’s environment will be cleaner if the government just retracted some of its existing ones.
On Thursday, the Union cabinet approved a fertilizer subsidy policy that aims at balancing fertilizer use. Mint reported on Wednesday that decades of such subsidies in Punjab have skewed the soil’s nutrient value, keeping it addicted to fertilizers.
Subsidies for oil, too, only ensure more consumption of hydrocarbons and, hence, more emissions. Subsidized electricity or water ensures that people operate electric pumps or hose lawns for hours together, depleting water reserves. These subsidies push prices too far downward, skewing incentives.
State action is only hurting the environment in these cases. It’s the free market that’s the cure.