Much of what passes for environmental policy these days typically amounts to nothing more than a capital-trashing exercise. The capital asset, whether it be a used car or a coal-fired generating facility, is somehow deemed to be environmentally unfriendly and is thus prematurely retired. As a recent Wall Street Journal editorial points out, trashing the thing, if it still has a useful life left in it, doesn’t make us any better off:

The basic fallacy of cash for clunkers is that you can somehow create wealth by destroying existing assets that are still productive, in this case cars that still work. Under the program, auto dealers were required to destroy the car engines of trade-ins with a sodium silicate solution, then smash them and send them to the junk yard. As the journalist Henry Hazlitt wrote in his classic, “Economics in One Lesson,” you can’t raise living standards by breaking windows so some people can get jobs repairing them.

ht: Cafe Hayek