Pricing the best game in town

The Earth Around Us - Blueprint for a Sustainable Economy
February 8, 2002

These are two very different books. The Earth Around Us is gentle and reflective, with a strong sense of place and a passion for the landscape and identity of different regions of the United States. Blueprint for a Sustainable Economy is technical and clinical and asserts the importance of environmental economics and monetisation (placing financial values on environmental assets) as a way of dealing with the complex choices and lifestyles of a society hell-bent on growth and consumption. Jill Schneiderman leaves the reader with a feeling of respect for nature and place in the US. David Pearce and Edward Barbier left this reader with a feeling of dread about the future of a world that has to be counted and measured in such mind-numbing detail. The technical detail and confidence in mechanistic weighing and counting leave no room for individuals and communities to display their sense of wonder and joy about place, tranquillity, nature or nurture. All will be well with the world, it seems, because we can put monetary values on environmental goods, feed these values into a reliable, well-oiled decision-making machine and make everyone better off. I think not.

The Earth Around Us has 31 contributions. They take their cue from science writer Rachel Carson's efforts to demystify science so that it can influence everyday life and vice versa. The contributions celebrate science's diversity, with a strong bias in favour of geology and geochemistry. They offer "poetic accounts of human thinking about our earth" and "direct and accessible stories of human actions and their aftermath on the planet". The book communicates extraordinarily well because the authors believe they have to connect with people if there is to be any chance of solving the planet's most difficult problems. Communication is doubly important because science is only part of the bigger picture: "Problems are multifaceted; solutions to them will require consideration of ethics and policy as well as judgement informed by cultural, political, social and historical context."

The book is divided into seven parts. Part one presents geological and human timescales as a canvas on which subsequent stories are painted. Part two tackles science, religion and values in an enjoyable and revealing way. Subsequent sections explore resources, the problems of human intervention, inventive solutions, whole-earth perturbations and global perspectives.

Any book of edited contributions produces peculiarities. A discussion of high-level nuclear waste disposal at Yucca Mountain rapidly loses the plot as the author invites us to contemplate an expansion of nuclear power because "that technology does not produce greenhouse gases". The idea that nuclear power can expand globally at a fast enough pace to replace fossil fuels is not one that withstands close inspection. The idea that we can create, manage, move around and store the huge volumes of radioactive waste is more untenable.

The concluding chapter, by Caryl Buchwald, declares that all problems boil down to three things "that are so important that not to know about them is to be profoundly ignorant of the dilemmas that modern people find themselves facing". These are: the fast-growing world population; the first and second laws of thermodynamics; and the fact that everywhere in the world we are perturbing large-scale geochemical cycles without anticipating what effects will result from our actions. But dropping consumption from the equation is intellectually flawed and dangerous. If the world consumes resources and energy at the rate of the average Californian, then that is an important problem of direct relevance to thermodynamics and perturbations.

These peculiarities do not detract from the overall importance of the book. A deep understanding of space, time and the uncertainties of large-scale human experiments with global systems is essential to the business of getting things right. Even more essential is the integration of ethics and values into scientific discourse, and of the wishes and preferences of consumers of science into science itself.

Pearce and Barbier take a different stance in their determination to assert the importance of environmental economics. The tone is set on the first page of the preface, where they complain about those who have disagreed with them in the past and claim that this is based, in part, on ignorance. The fact that they later concede that some criticisms do reflect "genuine worries" does not dispel the impression that this is seriously prescriptive economic science with no room for ethics, values, religion, love of place or anything that might have a valid claim to be part of the decision-making process.

The authors take us through familiar territory in defining and measuring sustainable development, valuing the environment, listing the causes of environmental degradation, solving environmental problems, examining business and the environment and explaining ecological economics. The book's central thesis is that the environment is suffering because environmental goods such as water, air, soil and biodiversity are not priced in a way that reflects their true value. The solution should be to work out the correct price and ensure people pay it. This "ecological taxation reform" is the foundation of much discussion worldwide. If we find an "environmental bad" such as waste, fossil-fuel consumption and air pollution, we tax the bad while making sure we reward the good, such as cycling, waste-water recycling, energy-efficient homes and waste reduction.

The book fails to discuss the problems with all of this. Take, for example, plans to expand the built-up area of Carlisle, which would take up large areas of greenfield land, drive a road through Hadrian's Wall, necessitate a bridge across the River Eden that threatens an otter colony, produce about 20,000 additional car trips a day and completely change the character of the city. All of these impacts can be "monetised" in the way that Pearce and Barbier describe, but how does that help the citizens of Carlisle come to terms with a development that, in their view, is unnecessary and damaging? The monetisation exercise arises from top-down science, which is value laden and fundamentally non-democratic. It is biased in favour of development and biased against a world view influenced by love of place and attachment to tranquillity.

This is not to say that the whole Pearce and Barbier thesis should be dismissed. The concepts and numbers can still be used; but environmental economists have to come out of their university departments and work with communities to refine their methods and convince residents that the numbers are helpful. A fifth terminal at Heathrow airport might or might not make a magnificent contribution to national, regional and local economics, but those who like monetisation have to convince residents of Hounslow and Hillingdon that the poorer performance of their children in noisy primary schools is a price worth paying for a future in which we can take several holidays a year in exotic places. Environmental justice is difficult to factor into a monetisation methodology, and as most environmental bads involve dumping the bad on somebody else, this is a problem for the victims if not for the economist.

The book exhibits some peculiarities that need more explanation. A reference to slash-and-burn farmers takes attention away from the more serious activities of, for example, the aviation industry. It is worrying that the authors mount an attack on an ill-defined group of critics described as "self-important" and "elites", while failing to mention the activities of the World Bank, multinational corporations and global advertising, all of whom have a non-democratic and damaging impact on the environment. The discussion of resource dependency in low-income countries fails to link global economics and the exploitation of these resources by rich countries.

The text is judgemental in a way that sits uneasily with the formal economic logic of monetisation and environmental valuation. We are told that, while there are difficulties with valuation, cost-benefit analysis is "the best game in town". But our transport systems already show the dramatic failures associated with this kind of analysis.

It would be helpful if ecological economics could deliver a new paradigm. If the insights and perspective of the economist could be linked to the open, ethical, transparent and community-involved perspective of the Schneiderman volume, we would be in with a chance. On current evidence we are a long way from that.

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

The Earth Around Us: Maintaining a Livable Planet

Editor - Jill S. Schneiderman
ISBN - 0 7167 3397 8
Publisher - Freeman
Price - £20.99
Pages - 455

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