Editor Note: The post below, published at MasterResource in June 2009, has profound challenges for the notion that self-interested business underinvests in energy efficiency, giving a “market failure” rationale for government investments in and mandates for energy efficiency. This post introduced the term conservationism to differentiate government conservation from market conservation. It also documents the market failure of Joe Romm’s shuttered nonprofit, the Center for Energy and Climate Solutions.

“Enter the energy outsourcing model of energy service companies (ESCOs) in the 1990s, widely heralded as a ‘new economy’ breakthrough and a new feature of ‘natural capitalism’. Enron Energy Services (EES), in particular, the energy outsourcing division of the late Enron, was the next great thing…. ‘ESCOs are DEFINITELY the future,’ exclaimed Joe Romm. ‘I intend to work with the big ones to transform the market, which I think will take about two or three years.’

A simple principle of economics is that value is subjective. Prices, and thus profit and loss, come from the (subjective) value that market participants place on goods and services. So if costs are greater than the revenues of a product, then economic value is lost; if revenues are greater than the cost, economic value is created.

Enter recycling, which has turned (even more so) into an economic loser in the current era of low commodity prices. What this means is that the cost of sorting and transforming trash into useful products is less than the revenue–and recycling should not be done.

And as the distinguished resource scholar Pierre Desrochers has explained, [1] recycling has been a loser for decades:

Domestic waste recycling has long been a money loser ever since plastics came along.

“What many environmentalists seem incapable of understanding is that resources are created. After all, crude oil is just sludge until you get it out of the ground and figure out how to use it as an energy source.”

“This Earth Day, we should all give two green thumbs up for human freedom and innovation.”

There is a certain fringe of the environmentalist movement whose members have almost nothing good to say about their fellow men and women. If not for humans, they sometimes explicitly argue, the Earth would be a wonderful place. The lion might not lie down with the lamb, but at least “nature” would be allowed to run its course unobstructed by humankind—which in their reckoning is somehow not a part of nature.

Admittedly, humans have a particular nature that sets them apart from the rest of the fauna on this planet.…

“High-yield agriculture and long-distance trade have long delivered a similar outcome—more abundant and affordable food with reduced environmental impact—on a global scale…. So prepare your meal from the most affordable food you can find to do both your wallet and the planet a favor.”

The lessons of history can be very eloquent, if only we are willing to take the time to learn them. In a 2008 National Geographic article, journalist Charles Mann discusses how soil management policies in communist China led to the creation of terrace agriculture in unsuitable conditions, the cutting down of trees, and the planting of grain on steep slopes. The main results were increased soil erosion and soil depletion.

Daring to challenge official edicts, some villagers replanted the steepest and most erosion-prone third of their land with grass and trees, covered another third with harvestable orchards, and concentrated their crops on the remaining lower flat plots that had been enriched by the soil washed down from the hillsides.…