Free Economies are Clean Economies A study of the correlation between economic freedom, limited government, open markets, private property rights, and environmental performance around the world.

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Introduction

Political candidates don’t talk like this very much anymore:

In his Earth Day speech in 1992, then-presidential candidate President Bill Clinton said, “I believe it is time for a new era in environmental protection, which uses the market to help us get our environment back on track—to recognize that Adam Smith’s invisible hand can have a green thumb.”

Clinton’s advice is just as pertinent today as it was nearly 30 years ago. Embracing economic freedom unleashes free enterprise to improve the human condition and the environment. The connection between free societies and human flourishing is undeniable. As economic freedom has improved around the world, the key indicators that measure human well-being have improved as well. People live longer, healthier lives. Important social metrics including worldwide disease, hunger and poverty have all fallen significantly even as the global population has grown.

Importantly, freer economies are cleaner economies. Many of the indicators that measure a country’s overall economic freedom: property rights, investment freedom, trade freedom and strong institutions, are essential for environmental progress. The correct economic and policy environment cultivates a system that rewards innovation, efficiency and stewardship. A system rooted in economic freedom generates more wealth for individuals and societies, so they can invest in protecting the environment.

This paper explores the relationship between economic freedom and environmental well-being through an examination of data, principles and case studies. It provides a broad roadmap for how countries can meet their energy needs, raise levels of prosperity and reduce pollution and waste. A pro-growth framework rooted in economic freedom is also important in the context of global climate change. Free, competitive markets without heavy-handed government distortions will drive investments in cleaner, more efficient technologies and more resilient infrastructure. It will lead to a reduction of greenhouse gas emissions and improve the ability to adapt to a changing climate. Global environmental issues like climate change are wickedly complex; the best global solutions will come in the form of economic freedom.

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