Is “environmental economics” an oxymoron after all?

posted on September 7th 2011 | 0 comments

Despite all the talk about environmentalists and economists needing to join forces, there’s one underlying, deeply inconvenient truth: Environmentalists and economists often see the world from two entirely different points of view.

Ecologists—and, by extension, many environmentalists—look at the world, and they see overlapping waves of growth and decline: Hare populations grow and grow until wolves come along and decimate the hare population. Soon enough, wolves themselves collapse, leading to hares growing once again. Populations oscillate around a stable equilibrium.

Economists look at the world, and they see growth: Every successful economic model for the last hundred-odd years shows things pointing up, forever. “Steady state” for economists implies a steady rate of growth.

Ecologists, let’s call them “pessimists,” point to humanity overstretching its ecological footprint. We’d need several planets to support our current lifestyle forever.

Technological optimists point to the disembodiment of value, producing more and more value with less and less stuff.

“Ecological economists” have worked hard to merge the two points of view. They have solid critiques of standard economics, but sadly, no clear solutions. Their models often point to the need for disembodying value in order to shrink our ecological footprint. That’s all good, but how do you actually get there, and how do you measure whether enough is enough?

Environmental economists focus on a much narrower question: how to ensure that everyone pays the full cost of their actions? We can’t all worry about humanity’s footprint on the planet whenever we go to the store. We can—and should—worry about whether we are paying the full price for whatever it is we are buying.