When is the time to invest in the environment?

By Geoff Ross.

In discussions on public policy, we routinely hear the argument that a thriving economy is the priority, whereas investing in a healthy environment should await better economic times.

But over the past 50 years of good and bad economic times, I have never heard these same voices say that now is the right time to invest in the environment. What is happening here? Will the economy never be good enough to justify investing in our environment?

The problem is the perception that the economy and the environment are two separate things that can be dealt with, or not, independently.

Think about this. Is our economy really independent of the air we breathe, the water we drink, the food we consume, the diseases we encounter and the weather we enjoy or take shelter from? Of course not, and in Muskoka, where our economy is so dependent on environmental quality, this link is very clear. So why should we consider a healthy environment separate from a healthy economy?

The answer, in part, is that accepted business accounting practice does not require consideration of the costs of our impacts on environmental health. For example, the costs of raw materials, labour, depreciation, taxes etc., are deducted from gross income to arrive at net income. The costs of impacts on environmental health are NOT part of such accounting. They don’t need to be considered, or paid directly, by those causing the impacts. Why should a business spend money on reducing these impacts if they are not required to do so? Until some government requires such expenditures, they are in fact separate from economic considerations.

The term used for such costs is “externalities.” And business has always lobbied strongly for governments to keep such costs “external.”

But the costs of our impacts on environmental health are indeed very real. In 2005, the Ontario Medical Association estimated that air pollution would have human health costs of at least $8 billion annually in Ontario alone. More recent data from around the world suggests much higher true costs. These costs are paid by the people through taxes to support health care, and through diminished overall quality of life and health. But they are not paid for directly by those emitting the pollution.

And damage to environmental health goes far beyond just air pollution.

The separation between economic activity causing environmental damage and the cost impacts of that damage has always impaired our understanding of the linkage between economy and environment. If we understood that linkage, it would be clear that we should manage them at the same time using a compatible set of tools.

A key tool is to ensure that the costs of damage to the environment are paid by those responsible for that damage. As multitudes of economists have noted, such a tool places the responsibility and incentive to reduce environmental damage on those best positioned to respond.

Also, humans tend to be more careful of things that have a cost. The health of our environment is definitely one of those.

So requiring all people, not just business, to pay for actions that impair the health of our environment makes sense.

In the recent past, the western world has had leaders who have levied a charge on carbon emissions, though some have had to abandon this due to the misinformation industry creating a public outcry. A charge on emissions is the right kind of policy to begin moving the economic system toward dealing with the inherent value of a healthy environment, and its linkage to the economy.

Those who have the courage to move in this direction, and perhaps to make mistakes along the way, deserve our support. Those who reject such thinking, for example the “development at any cost” folks, do not.

This is article No. 3 in Muskoka Watershed Council’s current series Living Smarter in Muskoka. Its author is Geoff Ross, a retired professional engineer. Following a career dealing with pollution from various industrial sectors, Geoff much prefers paddling and singing in Muskoka. He is a member and a former Chair of MWC. The series is edited by Peter Sale, Director, MWC.

This article was published on MuskokaRegion.com on June 21, 2025.