Tuesday, February 12, 2008

Economics of the Finite Earth

We have an internal seminar on Monday 18th February in the Senior Common room at 12 by Aart Heesterman. The title of the seminar is most intriguing:

Economics of the Finite Earth: A critique of the theory of environmental economics, its relation to economic growth and social stability, and its practical application to global warming

The talk will be based on his book that can be read HERE.

The very first line of the whole book inspired this post. Here is that line and the first few paragraphs as a taster.

Environmental economics is in a mess.

Economics more generally has, since the classics, been based on the assumption that a substance or resource that commands no price, is either of little relevance, or else is available in to all practical purposes, unlimited amounts. This has never been genuinely the case. The development of Western industrial and commercial affluence has invariably impacted on the established life stiles of others, from the Highland clearances to the colonisation of ‘empty’ countries in ‘terra nullius’. Now it is the planet itself, the integrity of the atmosphere and the oceans, the very basics of life that is under threat. Both water, surely the most basic and fundamental necessity, and the clean air we need to live a healthy life, remain locked in a convention that regards them as a limitless ‘free goods’, for everyone to take and deplete to their heart’s content.

We argue that appropriate fiscal measures to assign financial costs to environmental degradation, are the most cost effective way of safeguarding the earth. We also explore some of the technical means that might be used in that context, and the sociopolitical obstacles in the way of reaching an agreement on a course of action to this purpose. We take the necessity of measures to contain environmental degradation, and global warming in particular, for granted.

In addition, the practice of discounting, as almost invariably applied in cost benefit analysis, has no clear and consistent support in economic theory, and certainly not in relation to the containment of long-term environmental degradation. Three arguments, each of them flawed, are raised in the defence of the erroneous idea, that somehow, there are objective reasons for regarding the future as less important than our present affluence.

I believe that all will be welcome if you are in the University of Birmingham direction next Monday and fancy a limp sandwich and some environmental economics.

1 comment:

Robert D Feinman said...

I found your site by the citation on the Environmental Economics blog. I left a comment there, so I won't repeat myself, but I think it is useful to explain where one comes from when one just pops up.

My concern ever since reading Daly and a few others several years ago has been the lack of discussion of alternate economic systems beyond the present capitalist/consumerist arrangement taken as the norm by most people.

The ecological economists have defined the problems of living on a finite planet, and have even listed some goals for what a better future would look like, but have been unable to define an implementation plan.

I'm especially concerned with the power of those institutions which benefit from the status quo. I have a series of short essays on my web site where I discuss these issues, especially from the point of view of achieving a steady-state social system, but I've not been able to come up with a way to overcome institutional inertia either.

I was hoping that the recent rise of economic blogs would reveal some willing to discuss alternative social systems and this might lead to some new ideas. So far I haven't found any visionaries. Cassandras, yes, visionaries, no.