Environmental Economics (Part 1)

There are a number of problems with placing a value (contingent valuation, cap and trade, nature swaps etc) on nature, ie an economic and monetary worth for nature. The debate surrounding environmental economics is often pitched as a battle between direct democratic choice (citizens vote to say what natural spaces are protected) and “market mechanisms” ie selling environmental goods or services on amarket in which the highest bidder has access to the most goods and services / resources and where supply and demand meet. The problem with this is that there is, in reality, not much of a difference between democratic or public policy and economic means of determining the worth of say a protected land. If citizens are to vote on whether a natural space should be protected, their decisions will be based upon what costs and benefits that natural space will have for them, the very same considerations that come into play in economics. If voters decide a forests becomes a reserve there will be costs associated with that (infrastructure, maintenance, personel) and those costs will have to be vborne by the taxpayer. If the land becomes privatized, people will still be paying for what they think a visit is worth. Without opening the usual left ring can of environmental worms, here are further tools economists use to refluect on theoretical problems that arise with resource management.

Economic Tools of Analysis

Economists draw a distinction between use and non use resources. Use resources are goods and  service, this parts of the environment that carry utility (trees=lumber, air=oxygen etc) Non use environments or resources on the other hand are valued intrinsically, people believe in protecting patagonia or the arctic, even if they dont expect to go there. Economists use Market Data to answer questions. Its fairly common today to hear stuff like qualitative and quantitative information and economics has done a really interesting job at turning historically qualitative questions (what is the value of life?) into quantiative and monetary language.

Economists also use the trasvel cost method to determie what a natural park for instance, might be worth. The further people travel to a reserve the more it must be worth to them (since they are self interested rational actors that try to maximize their utility) and travling sucks dick, ite it costs money. If people are willing to pay 200$ on gas, time and (perhaps) renting a car to get to a forest, that forest is worth $200 per consumer. . THe travel method can be used to compare the value of reserves as well as determine what the costs and benefits for cleaining u0p a given reserve would be (If the reserve is farther away from consumers, bvut polluted, and if there is a unpolluted reserve neared to visitors, one can put travel cost to reserve a and travel costs to reserve B along with

Critique

An interesting critique that can be brought against environmental economics is that it is fairly bastract. For instance, using the Travel Cost method to find ourt what a reserve is worth, economicsts overlook how much the travel cost is worth to the traveler personally (something the tourist might not even know, $100 dollars means more to some people than others. If a teenager gets 100$ pocket money that money might not be worth that much to the kid, because he got it easily and did not have to work for it. By the same token, if someone goes snorkeling and finds $10 floating in the ocean, that $10 will be worth far more than $10 I suspect, because it was unique. I also sometimes personally feel that economic analyses become self sulfilling prophecies. IF policy makers base their politics on economic thinking, then they will create body politics that promote the foundations of economics and in that way act them out. There are innumerable historical examples of cultures and people not acting in rational self interest, or, as nietzsche says, “the last man lives the longest”.