9 May 2016

A case for environmental desires

Camelia writes:*

In the 1930s two leading thinkers – Lionel Robbins in economy and Talcott Parsons in sociology – wanted to bring peace between their disciplines, which at that time were trying to ferociously incorporate one another. Parsons proposed a grand division of labor: the economists should keep going on the relationship between means and ends, whereas sociologists should investigate the matter of the ends themselves. But here’s the catch: he argued that institutions, as an embodiment of what each society deems valuable, should be dealt with by sociologists, not economists [pdf]. It took it economics 80 years to recover from this bad deal (though to what extent this deal was bad for the economists it is debatable), and today’s institutionalism is an attempt to bring back the serious concern of economists with values.

Environmental desires are not flickering preferences about whether to visit the seaside or the mountains over the spring break: they are values, beliefs, deep seated insights about the worth of nature and how this worth relates to other values in our life.

For instance, is the Earth a ‘dominion’ for us humans to use, in order to fulfill the wish of God? Guth et al. shows that the answer to this question – yes, if you are religious, conservative person with eschatological beliefs – influences your attitudes on environmental policies!

Environmental desires are not easy to spell out, even less to transform into monetary value. Moreover, libertarian economists say they are not necessary to spell out, as long the system of incentives is built to promote the right environmental outcome.

The environmental outcomes look promising, at least in the developed world: we recycle more, we pollute less, we see the word ‘sustainable’ in every new policy document, etc. The theory of the environmental Kuznets curve [pdf] suggests that the trend reflects something akin to an economic law: after the initial drop in environment quality caused by economic development, the population in a country reaps more and more benefits, satisfy their material needs and eventually starts asking for cleaner environments. Thus we shouldn’t worry too much about our environmental desires: they are there, ready to take the spotlight after we achieve sufficient economic development.

I can think of a reason why this would not be the case: the valuation of nature can change over time in the opposite direction because we lose exposure to nature. For instance, Adevi and Grahn (2011) show in a very interesting piece how adults are attracted to the landscape features they were exposed to as children. Thus people who spent some childhood summers in a farm will value higher the green lands. What about those who grew up in a tall building with no tree in sight – an increasing proportion of people in developing countries, where urbanization is very speedy – reaping the benefits of economic development? Will they value nature enough to ask for a better treatment of the environment, or will they be content with a more and more artificialized landscape?

And remember, Kuznetz was wrong before.

Bottom Line Environmental desires, like other values, should not be left for investigation only to sociologists. They should be taken seriously by economists, as in the long run they are of primary importance for environmental policy-making.

* Please comment on these posts from my environmental economics students, to help them with unclear analysis, alternative perspectives, better data, etc.