While the cave was empty, Heiko Gerhauser scribbled some interesting graffiti on the wall over at the Google Globalchange group. You should add it to your blog, Heiko:
I’ve noticed something interesting about the way trade-offs are
discussed in the environmental debate. Lomborg likes economic growth,
and wants low carbon taxes. He therefore argues that economic growth
is a necessary pre-condition for environmental improvements, and that
there are important trade-offs between high carbon taxes or Kyoto and
economic development, ie we can have either an inconsequential Kyoto
or clean drinking water for a billion.
On the other hand, conservationists who happen to like polar bear
habitat, or the preservation of ocean eco-systems, argue that, no
there are no trade-offs here, really, the preservation of eco-systems
is a necessary pre-condition for human welfare and economic activity.
If there are trade-offs, they are ones between laziness (not changing
to an energy efficient light bulb) or egomania (say wanting powerful
cars) and the end of the world, as we know it.
In other words, there either are no trade-offs, where we’d have to
give up one thing to have another, or they are so damn obvious that
any sane person would know what to painlessly make do without.
I do wonder how much of this is rhetorical, and how much it is based
in fact. Are there really no hard choices to be made?
To the Lomborgists I say, is it really true that we couldn’t afford
clean drinking water, if we do Kyoto? If it’s really such a good deal,
why not finance it from say reduced military or Western social
And can we really say across the board that there’s no trade-off
between economic growth and protecting species habitats?
To the conservationists I say, how do you know that ocean
acidification is a major menace to human welfare? You are sure that
it’s not wishful thinking driving your arguments, and that the desire
to protect habitat for its own sake is influencing your thinking on
how important these habitats really are for human welfare?
Couldn’t it be that we actually do have a choice between some
substantial extra human welfare, and major changes in eco-systems?
That it’s neither the case that extra growth will in and of itself
protect the eco-systems, or that eco-system impacts will be such to
make growth impossible?
‘Necessary preconditions’ are what Heiko is drawing attention to here, but also, indirectly, to two fundamentally different ways of seeing the world, founded on different perspectives. From an Economist’s point of view, a stable economy is the foundation of human happiness; all other issues follow from the basic premise that, without economic stability, no progress, development, wealth, health, or happiness is viable. From an environmentalist’s view, a stable environment is the bottom line.
Michael’s point is that Economics and economic systems are an artifact, created by us, and as such, can undergo paradigm shifts if we choose to develop them. Heiko’s draws attention to something which underlies a difference between two perspectives but also reveals something they have in common.
Before going on to my observation, though, I’d say here that, whilst I, too, like the way Heiko is thinking, I suspect he may be doing Lomborg a small injustice here, as the position outlined above does not really represent the ideas proposed, for example, in Lomborg’s book, or in the so-called ‘Copenhagen Consensus’. As I understand it, the argument goes that, in a world with finite resources, there are better things to do immediately to reduce risk and suffering than invest in climate mitigation strategies. Without going into the logical construction of the argument, or the justifiability of the assumptions on which it is based, it is easy to see the superficial attraction of some of Lomborg’s thoughts. But better people than I have covered the strengths and weaknesses of this position already; a google of ‘Lomborg’ gives a characteristic taste of what has already been written. Suffice it to say that the underlying idea that action must be founded on not damaging the economy is the object of Heiko’s attention.
And so we come to the dichotomy; do we preserve economy first, or environment first? Which is the foundation of our happiness? Several people have pointed out that the two are not mutually exclusive, in particular, since the Stern Report, that environmental concerns increasingly preserve wealth in proportion to the promptness of action and the time-scale of climate changes. This is arguing from the Economist’s perspective; claiming that the cost-benefit sum is already tilted in favour of action on climate mitigation.
Other people put economic consideration aside, on the grounds that, without an environment, no economic discussion is meaningful. Why worry about whether the mortgage is up-to-date if the house is on fire? Heiko questions the assumptions that environmental change is necessarily harmful, and also the assumption that action on climate change is necessarily harmful.
On the latter, even if you are an economist, the answer is at least debatable; it is possible to put an economic case for or against certain climate strategies (though it is becoming increasingly hard to justify a strategy of inaction, such as George Bush’s administration appears to be pursuing). On the former, there are important distinctions of perspective depending on what type of environmentalist you happen to be, in particular, whether you place an innate value on the natural environment in itself, or consider it from the humanist perspective of being ‘the place in which humans live’. ‘Hard’ ecology might argue that the biological systems have a value in and of themselves, and that our moral obligation is clear irrespective of the cost to us. ‘Soft’ ecology might accept Heiko’s question and address the issues, such as ocean acidification, in terms of their impact on human happiness or survival.
Interestingly, whether the view you take is that of the Economist or the (soft) Environmentalist, you are still attempting to address the same essential idea; what is in the best interest of people? In particular, you are probably also concerned about what is in our best interests to do now, for the best possible future. So, at bottom, both perspectives can have a common goal. So why are they so obviously at odds with one another? From where does the apparent conflict arise between the ‘market-based’ way of looking at things, and the ‘green’ way?
There are undoubtedly many distinctions, but for the time being, let us just focus on one, which I think is a core difference. Although Economics is in principle capable of considering matters from the long view, political economy has a shorter-term focus, and it is political economy which still drives policy. Then there is the matter that, what we are dealing with much of the time is not economics at all, but market-driven capital economy. What upsets the ‘green’ about the ‘market’ is the tendency of the latter to consider everything as either a liability or an opportunity. A marketeer will see a problem and ask; ‘what profit is there in this?’. A war is not a human crisis, but a market for arms sales and development. Carbon cap-and-trade is not a mechanism for controlling emissions, but an opportunity to make money from a disparity between demand and supply (of carbon credits), or a chance to invest in carbon futures. Climate change is, too, (see comments on UBS’s GMI weather funds), an investment opportunity. Everything seems to come down to the question of ‘how can I turn a buck from this?’; everything has a price, a trade-off, and a profit-margin. This is the way of looking at the world which is so irritating to an environmentalist.
The way of seeing the world as a series of opportunities for profit (by a minority) , to be exploited wherever possible, which in turn ‘generates wealth’ and thereby a ‘strong economy’ is at odds with the broad environmental conception of a ‘common-wealth’ of shared goods which is, as Lovelock would have it, ‘Gaia’; the ‘whole package’. Apart from anything else, this difference helps explain why ‘marketeers’ are generally perceived as right-wing, and environmentalists ‘liberal’ or ‘left-wing’; the foundation of one is the autonomous pursuit of happiness within the context of the preservation of rights and property, of the other, the shared pursuit of happiness within the context of balancing historical inequities and redistributing existing wealth or happiness more fairly. (yes, this is too broad a brush-stroke).
For useful progress to be made at the G8, or in any discussion where there appears to be an ‘environmentalist’ sitting across from an ‘economist’, what has to be overtly understood and clearly specified is what the measure is by which we are judging the success of a policy or strategy. Is the argument going to be about who who wins and who loses, about who pays and who benefits (think USA v China on emissions, here), or is it going to be about how to put the goddammed fire out? Jeffrey Sachs, Tom Athanasiou, Michael, many others, are already pointing us in an important direction; the kind of competitive, market-driven, adversarial, ‘I win you lose’ mentality which once characterised the ‘yuppie’ generation is a recipe for tragedy and disaster. And the alternative is not Communism.
More on this at another time.