Paulson Takes Charge: Focus Like a Laser

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The environmental left is hopeful that George Bush’s pick for Treasury Secretary, Henry Paulson, will serve as a voice of the Green agenda within the administration.

“Anyone who is prudent enough that the world’s markets will trust him to run the U.S. Treasury would also be prudent enough to think that global warming is a big enough risk that we need to minimize it,” blogged Sierra Club honcho Carl Pope following the announcement. “Paulson fits in this category – and he may bring enough clout to the job to force Bush to move beyond global warming denial.”

Pope has grounds for optimism. Paulson, chairman of the giant investment-banking firm of Goldman Sachs & Co., is a committed environmentalist. His firm has pledged $1 billion in support for “renewable energy” projects. And he himself is winding up a term as chairman of The Nature Conservancy, the biggest of the mainstream environmental concerns, which favors “a comprehensive federal policy for reducing global warming emissions.”

This has alarm bells ringing on the right. Human Events reacted by branding the nomination “another Harriet Miers” moment, in part because of Paulson’s green leanings. The libertarian Competitive Enterprise Institute, which terms the Nature Conservancy an “agent for turning millions of acres of productive private land into federally-owned land,” has called on Bush to withdraw the nomination.

That’s not going to happen. But the public has a right to demand that Paulson focus on the economy like a laser. If he favors Al Gore’s Kyoto Treaty, or even so-called “market-based” systems for dealing with global warming, we’ll know he places the environment ahead of jobs. And as it happens, nothing could be more important for the health of the environment than the health of the economy.

There is reason to think Paulson understands the limits to government command-and-control policies. The Nature Conservancy has retreated from its past practice of flipping the land it acquires to the government for safe-keeping. And before he got involved with the Nature Conservancy, Paulson chaired the board of the Peregrine Fund, a private organization that produced one of the few success stories involving an endangered species.

After banning the use of DDT, which had allegedly led to a sharp decline in the Eastern peregrine population, the government tried but failed to restore the amazing falcon, which dives on its prey at speeds up to 200 miles per hour, by breeding them in captivity. A Cornell University biologist who was a passionate falconer organized the Peregrine Fund to work on the problem with private backing from individuals like Paulson – and, after long years of trial and error, succeeded brilliantly.

In 1999 the peregrine was even taken off the Endangered Species list, one of the few creatures ever to receive such treatment. (When I interviewed Paulson about the experience several years ago, he complained about the “bureaucratic rigamarole” of the Endangered Species Act.)

What’s not clear is whether Paulson understands that government – and in particular the Treasury Department – often is responsible for much of what’s wrong with the environment. Inheritance taxes, for example, create incentives for big landowners to sell off property to developers, which is why The Nature Conservancy got started. Congress could ameliorate the problem by approving a pending bill to make permanent the 2003 reductions in the death tax.

Enviro-pessimists like Carl Pope view economic growth, which they equate with more pollution, as the enemy. But studies have shown that wealthier societies are cleaner societies. In other words, let’s hope Paulson does turn out to be an advocate for environmental policies – but of the sort that benefit people as well as the birds.

Mr. Bray writes columns for the Detroit News and

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