"Why do you hate ecological economics?"

The above is one of my FAQs. Answer:

I don't!

As evidence I submit my my environmental economics syllabus (hot off the presses). Note the textbook*. In the preface Goodstein states:

In terms of content, the book provides a rigorous and comprehensive presentation of the "standard analysis," ... However, Economics and the Environment also incorporates broader topics as separate chapters, notably, the ethical foundations of environmental economics, an introduction to ecological economics ...

The neat thing about the book is the comparison and contrast between neoclassical economics (i.e., standard or mainstream economics) and ecological economics. And, if you noticed, this material is on the course outline. So, I don't hate ecological economics, in fact, I think the approach is much-needed, I just don't agree with some of the conclusions (my dad always said don't say you hate someone/thing, just say that you don't like what they/it are/is doing right now).

More evidence: In the past I've pointed you towards the ecological econ blog and I'm hoping to have a good time with my class this semester. I've published papers in the Ecological Economics journal (and refereed a boat-load of papers for them):

The journal is concerned with extending and integrating the study and management of “nature's household” (ecology) and “humankind's household” (economics). This integration is necessary because conceptual and professional isolation have led to economic and environmental policies which are mutually destructive rather than reinforcing in the long term.

And take a look at the aims and objectives from the International Society of Ecological Economics:

The International Society for Ecological Economists (ISEE) facilitates understanding between economists and ecologists and the integration of their thinking into a trans-discipline aimed at developing a sustainable world. The following are some of the broad areas and particular questions of ongoing research and discussion in ecological economics:

• Modelling - How can we better integrate economic and ecological models to address management of local biodiversity, an ocean fishery, or the climate services of the global atmosphere?
• Equity - How does equity between individual people, nations, and over generations relate to sustainability?
• Indicators - Can we redirect development by augmenting traditional indicators such as GDP (gross domestic product) with biophysical indicators such as ecological footprint and social indicators such as the education of women?
• Limits - What properties of ecological and social systems act as "limits" to development and to what extent can human-produced capital substitute for natural capital?
• Trade & Development - How do current policies to promote development through capital mobility affect the control of natural resources, the ability of nations to manage environmental systems, and the distribution of well-being?
• Valuation - To what extent can we measure the value of non-market services provided by ecosystems and how can we promote public discourse on environmental and social values that significantly enriches economic measures?
• Policy Instruments - How should systems of tradable environmental permits and obligations, combined with environmental tax reform, be implemented?

Other than valuation and policy instruments (the two-headed beast of environmental economics), these are things that neoclassical economics either ignores or doesn't do too well. Ecological economics stepped into that void. To me, the most important contributions of ecological economics is the interdisciplinary sustainability research and, related, attempts to measure green GDP.

The things from the ecological economics literature that I don't agree with are (1) adding up of marginal willingness to pay values to arrive at a sum total willingness to pay that is greater than income and (2) the view that economic growth must be stopped, otherwise the environment will necessarily suffer. To me, these are the more extreme results from the ecological economics literature.

Even more evidence: I enjoy working with ecologists/biologists and, in a number of settings, have rarely** gotten into a fight (in school I played well with others).

*This is my first try with Goodstein. I've most recently used Jim Kahn's book in the past and like it but I also like to change books every now and then. I've primarily used Tietenberg, Field and Kahn in the past (all good undergraduate books) but am ready for another.

**The one fight that I've been involved in has been a painful doozy.

Comments

[J.S.]

I share John's critiques and I will go one step further. Many ecological economists call for a level of government control over the economy that is truly frightening and would likely approach some sort of authoritarian levels.

J.S.

[Dave Iverson]

Johns says, "The things from the ecological economics literature that I don't agree with are (1) adding up of marginal willingness to pay values to arrive at a sum total willingness to pay that is greater than income and (2) the view that economic growth must be stopped, otherwise the environment will necessarily suffer. To me, these are the more extreme results from the ecological economics literature."

Yes, they are "most extreme results from the ecological economics literature." And certainly not shared by many who dabble in the cross-disciplanary conversation titled "ecological economics."

I for one was as off-put by (1) as was John. And as for (2) I try not to go there either. Instead, I advocate a "growing economy" without a growing "ecological footprint," although I still have qualms about how folks go about measuring either one. But that is my impression (perchance mistaken impression) of Herman Daly's "qualitiative growth" that is part an parcel of his Steady State Economics notion.

Now, aren't there some "extreme results" from the environmental economics literature that might be aired as well?

PS.. J.S: Which "ecological economists" are you referring to with your offhand remark of "many," and what "level of government control" do you take exception with?

[John]

Dave,

I'm glad to hear that I haven't alienated all the ecol-econs.

Now, aren't there some "extreme results" from the environmental economics literature that might be aired as well?

Yep, the strand of free market environmentalism that rejects all government involvement in environmental matters (e.g., air quality and water qualitiy are tough to assign property rights too ... and a gold star to the first person who suggests the acid rain program as a counterexample ... as Biopolitical reminds me, it ain't free market environmentalism if it's got gov't).

John

[joshua corning]

as Biopolitical reminds me, it ain't free market environmentalism if it's got gov't

can i vomit now that you and biopolitical have layed claim to the "free market" moniker as to not include degrees of freedom...

One can say one solution is more free then other...or one could take your definition and claim no one is free unless they have the constitutional right to murder.

Jesus its like you want to make people like me into anarchists or something

[J.S.]

A number of people in the Gund Institute in Vermont are on record advocating very strict controls of personal choice and centralized government authority over the economic activity of the nation/world.

J.S.

[Dano]

Think what will be on record in many places - and what our economic activity will be - when 3B more people are here in 50 years, competing for the same resources we have now. We won't have to control personal choice, the lack of land and oil will do that for us [IOW, don't fear].

Best,

D

[Dano]

Hey Tim, John:

Can you plz have your guy enable titles in HTML tags? Much grass.

Best,

D

[Anna]

But my question is what is the deeper reason for the fact that in reality often the corresponding social optimum is missed?

[Susie]

I used Goodstein's textbook in my undergrad Intro Environmental Economics course, and I referred to it many a time throughout college. I'm a fan of the book, and I think your students will be as well.

[Michael Barkusky]

I find most self-labelled "ecological economists" are more explicit about their ethical values, and about initial patterns of wealth distribution, than self-labelled "environmental economists" and this has definite advantages. For example, when dealing with biotic "natural resources", it may be a perfectly efficient solution to the extinction problem to make the "resource" in question "private property" of humans. But that doesn't address anywhere near the the whole range of issues involved. Take elephants for example. I am quite prepared to accept that if all surviving wild elephants were privatized, this would probably ensure that elephants as a species are saved from extinction. But is it morally acceptable for wild elephants to become human possessions, with no higher legal status than inanimate objects ? And who has the right to own elephants ? Anyone willing to expend the marginal cost of capturing one ? Is there no existing "owner" (God, the wild elephant "society", each elephant individually, national governments, the UN ???) who must be compensated ? If we put up a "veil of ignorance" (from John Rawls' Theory of Justice) on the species barrier, we will readily see that privatization by capture, with the capturer paying no more per unit than the marginal cost of capture was exactly the economic model of the slave trade. How many contemporary neoclassical economists would defend the slave trade as a legitimate form of commerce ? Ecological economists debate these issues by making their ethical values explicit in the discourse, and I think that is valuable.

I also think Herman Daly's "development" versus "growth" distinction, generally better understood by self-labelled ecological economists, is a very useful one. We can certainly have development for an indefinite period into the future if it involves little or no increase in entropy, but economic "growth" of the type we know in today's real world, still has a heavy ecological (entropic) footprint, and cannot continue very long on a compound basis, even at rates as low as 1 or 2%, without causing ecological disaster. All one has to do, is the math. For how many years can you compound say 1.01 before you get an absurdly large number ? It can only go on if growth is massively "de-materialized". And fully de-materialized growth is exactly how Daly's "development" is defined.

And for the record, I identify as an ecological economist (despite being as government-skeptic as the next guy). I regard both the market and democratic governance under the rule of law as flawed institutions. Both are quite elegant, in their own unique ways, when they work properly, but neither are anywhere near perfect. We keep them in the world's better-governed societies, because the alternatives (central planning and dictatorship respectively) are so much worse; not because we are so naive as to think the textbook stories of the enormous virtue of either institution represents an honest truth.

Michael Barkusky

[john]

Yes, similar to Michael's point about the veil of ignorance, what if we started including the utility of other species in our utilitarian calculus? Or just say the ones that have a sufficiently similar physiology for us to grant that their utility being at least comparable to ours (the subjective experience of their utility)? Say some of the higher primates?

Is there a reason why they shouldn't be included in calculations of utility?

Unless you believe that humans have souls and animals don't or some such Cartesian claptrap.

[Michael Barkusky]

John:

I certainly don't believe the Cartesian claptrap about soulless animals (amazing that the inventor of something as brilliant as analytical geometry was so dogmatic about a subject on which he had zero empirical evidence - in contrast, for example, to Moses Maimonides and St Francis, hundres of years before - isn't it)

Consequently, I'd actually like to take that neo-Rawlsian heuristic further and see how largely neo-classical microeconomics looks without any "ownership" by humans of biotic "resources", collectively or individually. My proposed heuristic substitute is a human trustee (or trustees) along the model used in law for minors or adults who are no longer mentally competent. There are huge difficulties with this, of course. For one, trustees for minors are generally "kept honest" by the threat of civil litigation against them by the beneficiaries whose interests the law charges them with upholding; only infrequently and imperfectly by some public authority. However, the key point is that a trustee does not "own" a beneficiary and may not (in law) places his/her interests ahead of those of the beneficiary. Of course a trustee for, say, the cod species might want to trade in some cod for the good of the species, while a trustee for wolves might perhaps be held legally responsible for wolf predation of free range chickens hosted by the chicken trustee (who sells eggs, believing that to be justifiably in the best interests of his chicken flock). One can see immediately that will not be easy terrain (I can see game theory will be needed !) but that its exploration may prove fascinating.

Michael Barkusky