I say not necessarily. Matt Kahn on "Why Is Environmental Economics Flourishing?" (emphasis added):
The American Environmental and Resource Economics Association [sic] just held its Summer Meeting in San Diego. ...
Environmental economics features a very young scholar base. Most of the people at the conference were under age 40. I am optimistic that this crew will be less likely to opt out of doing research than similar aged scholars in other fields. The net effect of such research effort will (in aggregate) be a more vibrant research field that makes more progress and attracts the next generation of young people to enter the field.
Why am I optimistic about this sub-field?
1. Big Data ---- as electric utilities partner with economists there are all sorts of interesting issues that researchers can work on using observational and experimental research designs. Increasing energy and water efficiency through behavioral change will continue to be a major topic.
2. Passion for improving the lives of people in the developing world --- environment and development will only continue to rise as a key research topic; in the urbanizing LDCS, how do we set up incentives to allow for the benefits of free markets without unleashing the air pollution that Chinese and Indian urbanites have been exposed to?
3. Mitigating climate change ---- many many environmental economists are focused on cap and trade and carbon tax implementation to reduce global GHG concentrations.
4. Adapting to climate change --- a growing cadre of scholars (including myself) are working on this topic.
Better data, important (policy relevant) questions, and idealism create a formidable combination that leads to a rising sub-field. While in the past environmental economics was viewed as a quirky subfield of mainstream economics, I am optimistic that this impression will fade. My only slight concern with the subfield is self-selection. I sometimes have the feeling that the field tends to attract scholars with some suspicions about free markets. Milton Friedman's books and videos could be handed out to all scholars at the 2016 conference as a registration gift! I will pay for them.
I have absolutely zero concern about the problem of self-selection. There is a very good reason that environmental economics attracts scholars with some suspicions about free markets. It is likely that early on in their training, say chapter 5 of the introductory textbook, they learn that pollution is an example of negative externalities, many of the benefits of environmental quality are public goods, overfishing is an example of the common-pool resources problem and et cetera. In short, the field of environmental economics has a solid foundation of market failure economics.
I pulled my copy of Free to Choose off the shelf and read the section on the environment in the "Who Protects the Consumer?" chapter (pp. 203-208). Rather than a description of Coasian free market environmentalism, it is a description of mainstream Pigouvian environmental economics. For example, on page 207:
Most economists agree that a far better way to control pollution than the present method of specific regulation and supervision is to introduce market discipline by imposing effluent charges.
I wish I had my ECO 2620 (introduction to environmental and resource economics) students read this in the Spring. I certainly followed the Friedman text.
Here is the same message from Jeff McMahon writing at Forbes in the context of climate change.
Leading economists at the “Mecca” of free-market economics, the University of Chicago, evoked their most prominent predecessor, Milton Friedman, last week [Oct 2014] in advocating a price on carbon to address climate change.
At a forum called “What Would Milton Friedman Do About Climate Change?” former U.S. Rep Bob Inglis (R-SC) opened the discussion by playing a 1979 clip of Milton Friedman on the Phil Donahue Show:
Phil Donahue: Is there a case for the government to do something about pollution?
Milton Friedman: Yes, there’s a case for the government to do something. There’s always a case for the government to do something about it. Because there’s always a case for the government to some extent when what two people do affects a third party. There’s no case for the government whatsoever to mandate air bags, because air bags protect the people inside the car. That’s my business. If I want to protect myself, I should do it at my expense. But there is a case for the government protecting third parties, protecting people who have not voluntarily agreed to enter. So there’s more of a case, for example, for emissions controls than for airbags. But the question is what’s the best way to do it? And the best way to do it is not to have bureaucrats in Washington write rules and regulations saying a car has to carry this that or the other. The way to do it is to impose a tax on the cost of the pollutants emitted by a car and make an incentive for car manufacturers and for consumers to keep down the amount of pollution.
Two current economics professors elaborated on Friedman’s view and applied it to the 21st Century problem of human-induced climate change.
“What’s happening when we turn on the lights, when the power is derived from a coal plant, or when we drive our car, is that carbon dioxide is emitted into the air, and that’s sprinkling around damages in Bangladesh, London, Houston,” said Michael Greenstone, the Milton Friedman Professor of Economics at the University of Chicago and the director of the Energy Policy Institute of Chicago. ...
According to Greenstone, who came to the University of Chicago last year from the Massachusetts Institute of Technology, economists agree broadly on the benefits of a carbon price.
“The media always reports that there’s near consensus among scientists about the effect of human activity on the climate. What gets less attention is that I think there’s even greater consensus, starting from Milton Friedman and going to the most left-wing economist you can find, that the obvious practical solution is to put a price on carbon. It’s not controversial.”
So, I totally disagree that the youngish economists at the Association of Environmental and Resource Economists (AERE, not AEREA) conference should read Friedman in order to enhance their appreciation of free markets. To the contrary, some of the 45+ economists might do well by rereading pages 203-208.
