4. GND eliminates price signals and causes tragedy of the commons

(James M., Nicolas Loris, MA, Kevin Dayaratna, PhD, Principal Statistician, Data Scientist, and Research Fellow , 8-7)

As Heritage analysts have reported, governments in countries such as Venezuela and China routinely mismanage and waste resources or ramp up production with little to no accountability for the environmental damage that comes with it. The absence of price signals reduces the incentive to be more efficient and do more with less. In addition, the absence of property rights reduces the incentive to conserve and gives government-controlled industries a free pass to pollute without compensating or protecting its citizens.13 Venezuela consistently ranks at the bottom of the annual review of 180 countries in The Heritage Foundation’s Index of Economic Freedom. 14 While China ranks higher than Venezuela in the Index, its better performance is attributable, in part, to manipulation of data by the communist dictatorship in Beijing. Interventions by governments in an economy’s price-setting system and the weakening of property rights and the rule of law through corruption and governmental incompetence are key factors in the Index’s analysis. The EU is not China or Venezuela, but the more the EU taxes, regulates, and spends through GND-like policies, the more Brussels will erode the economic freedoms of Europeans. By shrinking the EU’s economy by potentially tens of trillions of dollars, the GND will cause lower levels of prosperity and leave Europeans with fewer resources to deal with whatever environmental challenges come their way.