Debates missing life

Environment and Development Economics
October 8, 1999

This journal was launched in 1996 with a powerful statement of intent from Hirofumi Uzawa, emphasising the degradation of natural and social environments associated with Japan's economic progress in the past 40 years and the degree to which ordinary people were suffering. It led to the conclusion: "I could not avoid the feeling that something serious was amiss in the orthodox doctrine of economic theory with which I had been working for so many years."

This statement gets to the heart of the development/environment debate and identifies the central paradox of development gains measured in traditional economic growth criteria going hand in hand with deterioration of living environments, widening social and economic inequality and increasing insecurity. If a journal can tackle this mismatch of theory and practice and relate to the reality of life in urban and rural areas of poor countries, it will have made a key contribution to economics and to the life chances of disadvantaged people.

The editorial policy of the journal rightly emphasises interactions between environment and development issues and the need to put high-quality information in the hands of decision-makers. While laudable, this misses the crucial areas of political development and the impacts of powerful multi- or trans-national companies on the economies of poor countries. It is clear, for example, in West Bengal and in Calcutta that there is an accelerating process of environmental deterioration that imposes itself on the very poor and is linked to rapid economic development without concern for the environment. The decision-makers are very well informed of the consequences of their decisions: the loss of land in the east of Calcutta to urbanisation is destroying a unique wetland habitat, and the food production potential of the city region is in steep decline. It is simply in decision-makers' interests to expedite financial deregulation rather than to oppose the trend, and there are huge profits to be made from land transfers. The environment, including the whole life-support system of Calcutta, is under threat from a process that meets all the criteria laid down by financial institutions and international development agencies.

This journal does not address the political, power-based processes that cause environmental destruction and colonise the development trajectories of poorer countries. There is not one article on the World Bank nor on the activities of one of Japan's main funding agencies. A whole dimension that fuels the engine of global environment and development has been missed.

Indeed there is not a single article about globalisation's impact on the capacity of local economies to build resilient local employment. There is no mention of the subtleties of relationships between strong states such as Nigeria and large companies such as Shell, which have contributed to massive environmental problems and human-rights abuse in Nigeria's Ogoni region. These are uncomfortable subjects that risk the wrath of companies such as Shell, which funds major academic programmes on sustainability and development. They are, nevertheless, central to an understanding of environment and development. If a rickshaw puller in Calcutta or a small farmer in the oil-rich Ogoni region is poorer, sicker, more insecure or more repressed as a result of economic change, that change is more accurately described as a redistribution of power and wealth in favour of the rich than as "development".

The journal does contain high-quality material. The discussion by Kenneth Arrow and his colleagues on "Economic growth, carrying capacity and the environment", in volume one, number one, reveals the importance of this subject. In language that would not appeal to decision-makers, the authors state: "economic liberalisation and other policies that promote gross national product are not substitutes for environmental policy". Their conclusions go some way towards explaining why poor people end up with worse living environments as a result of economic growth. They also neatly side-step the question of whether or not poor people end up poorer as a result of economic growth.

The journal's "Policy forum" section is a refreshing format for this kind of debate. Following Arrow's article are eight shorter commentaries. Colin Clark advances the notion that "ecologically based principles of tariffs and trade" are important in making environmental progress and, further, "ecological resilience and sustainability will have to replace growth and liberalisation of trade as the main objective of these new agreements". Herman Daly follows Clark with ideas of his own about extending the Arrow analysis (which he thinks not particularly new) by being more explicit about the links between free trade and environmental degradation. This is very helpful as well as being unpopular with the World Bank.

The journal addresses two very significant issues. In volume two, number two, cost-benefit analysis is analysed, and in volume three, number three, climate change gets the same treatment.

Cost-benefit analysis (CBA) still excites extremes of agreement and disagreement in the academic and policy world. Its treatment in this journal is very professional but misses the humour and pathos of the subject, which reached a high point in the 1970s when John Adams of University College London showed that the "best" location for London's third airport was Hyde Park. Adams applied the full rigour of CBA to produce a result that very few could accept. The discussion by Arrow (again) and his colleagues of CBA's role in environmental, health and safety regulation goes round in circles and ignores ethical issues.

The journal's attention to CBA in a poor-country context is very welcome and overdue but proceeds when the main issues are still unresolved or denied in Washington DC, London and Brussels. Who is valuing what when tens of thousands of local residents are compulsorily removed from their homes because of a dam in India? Who is valuing what when flyovers are deemed to be the solution to Calcutta's transport problems when only a tiny percentage of the population have access to cars and no one is interested in the conditions under which people walk, cycle or use the trams? The decisions, as always, will be cloaked in the respectability of a CBA or similar assessment, but the outcome is already known and does not depend on the spurious objectivity of CBA.

The discussion on climate change sets a high intellectual and policy standard in what is still a controversial issue. The scene is set by Bert Bolin, former chairman of the Intergovernmental Panel on Climate Change, which is followed by 11 commentaries. Bolin doubts the value of CBA in dealing with climate change; David Pearce (one of the commentators) disagrees. All the commentaries on Bolin offer additional insights and arguments around the fraught subjects of costs and benefits, carbon reduction, burden sharing, mitigation and the implications for poorer countries of carbon reduction. The even more fraught subject of the link between consumption and carbon emissions does not figure in the discussion.It is quite clear that the population of US, Europe and Japan can deliver reductions in carbon emissions that are far greater than those currently agreed. It is also clear that this would produce a number of other benefits (for example, cleaner air, less polluted water, healthier children, and more local employment). The complexity of climate-change discussions sometimes looks like a device for avoiding the unpalatable discussions that would surround excess consumption in the North and under-consumption in the South.

Environment and Development Economics is to be congratulated on attracting high-quality material and developing a lively debating style that sets it apart from conventional, rather stuffy academic journals. Its failings are the failings of economics as a discipline and academic life as a compartmentalised world. The issues at the centre of the journal's mission require economics to be tempered by ethics and academic discourse to be tempered by a dose of the reality in which most important decisions are made. A few articles by concerned groups of citizens in Calcutta or Port Harcourt would reveal the harsh reality of everyday life in poor countries and the degree to which this is deteriorating as fast as our academic understanding is increasing.

John Whitelegg is professor of environmental studies, Liverpool John Moores University.

Environment and Development Economics: (four times a year)

Editor - Charles Perrings
ISBN - ISSN 1355 770X
Publisher - Cambridge University Press
Price - £84.00 (institutions), £44.00 (individuals)
Pages - -

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