Economics and the environment almost always seem at odds. Yet the improvements in environmental quality throughout the United States over the past 25 years demonstrate that not only can economic growth and environmental improvements coincide, but economic growth is the most important prerequisite to a cleaner and healthier environment.

By almost all counts, environmental quality in the United States is improving. Take air quality. Since 1970, ambient levels of all pollutants targeted by the U.S. Environmental Protection Agency have declined. Between 1976 and 1995, ambient levels of ozone, the major component of urban smog, decreased 25.7 percent. In Los Angeles the number of days exceeding the ozone standard fell 50 percent between 1985 and 1995, and New York saw a 65 percent reduction over the same period.

Ambient levels of sulfur dioxide, the major component of acid rain, decreased 60.7 percent between 1975 and 1995. Carbon monoxide levels decreased 63.7 percent over that same period, and North American cars built in 1993 emit 96 percent less carbon monoxide than cars built just two decades earlier. Due to the phase out of leaded gasoline, lead concentrations fell 97.2 percent between 1976 and 1995.

Natural resource use shows similar trends. Contrary to popular belief, forest resources in the U.S. have remained stable for the past 50 years. New growth exceeds the amount of timber harvested, and there is about three times more forestland in North America today than there was in 1920. U.S. energy resources are stable, as per capita consumption of energy has decreased significantly since the 1970s. Protected wilderness areas have also increased significantly: the ratio of protected areas to urban and agricultural lands grew from 6.4 percent in 1959 to 22.9 percent in 1987.

Such improvements are not seen everywhere. First world nations with market-based economies remain far ahead of third world or socialist countries in environmental quality. The U.S. and other developed nations are concerned about such areas as ozone depletion, global warming, and toxic air pollutants. In third world countries, however, people die daily due to contaminated water, lack of refrigeration, and starvation from soil erosion that has prevented crops from growing.

Furthermore, market-based economies provide incentives to reduce waste of natural resources. In 1965, companies producing aluminum cans used 164 pounds of metal per 1000 cans. But competition among these companies led to a 78 percent reduction of metal used, and by 1990 only 35 pounds were needed per 1000 cans.

Similar trends are seen in energy efficiency. For example, India uses three times the energy and emits four times the carbon dioxide per unit of GDP than the U.S., and China uses five times the energy and emits eight times the carbon dioxide per unit of GDP. China’s socialist economic policies do not provide incentives for improvement, and by 2025, China will emit more carbon dioxide than the U.S., Japan, and Canada combined.

Until now, environmental policy has relied almost entirely on command-and-control regulation. While such regulation has had its successes, it also hinders the very economic growth that has allowed for environmental improvements. Furthermore, the marginal cost of pollution reduction is higher today than in the past. Stated another way, a smaller aggregate amount of pollution means that each further reduction is more costly than the last, and the health benefits produced are less significant and felt by fewer people.

For this reason, environmentalists should no longer regard economic concerns as a hindrance to effective policy, but should adopt innovative policies that incorporate and even promote economic growth. Such policies not only best address today’s environmental situation, but provide the most promising future for tomorrow’s environment as well.

Erin Schiller is a Public Policy Fellow at the California-based Pacific Research Institute.