Love Your Monsters_ Postenvironmentalism and the Anthropocene - Michael Shellenberger [32]
Environmental economists defined and measured welfare or utility in terms of preferences or, practically speaking, the amounts people are 1) willing to pay (WTP) for a good or 2) willing to accept (WTA) to relinquish it. They did not describe pollution and other assaults on the environment in terms of entropic forces wearing down the resilience of holistic and integrated evolutionary systems. They diagnosed environmental problems as market externalities, that is, as uncompensated effects of economic decisions on third parties whose interests — or whose WTP — those decisions did not take into account. Economist Robert N. Stavins wrote, “The fundamental theoretical argument for government activity in the environmental realm is that pollution is an externality.”50
Environmental economists had an advantage because they applied a framework that was already familiar in economic thought and therefore in policy analysis and political discourse. During the 1990s, environmental outfits and agencies staffed up with economists to attribute prices to externalities and discover market failures. Dueling cost-benefit analyses and opposing stories about WTP or WTA began to co-opt, infiltrate, and even replace moral argument and political persuasion.
In response, many ecological economists, including some who had criticized the framework of neoclassical welfare economics, adopted it. It was easy to argue that people are willing to pay a lot for nature and for the services it provides. Accordingly, ecological economists, rather than continuing to construe economic systems as embedded in ecological systems, reduced their ambitions to tweaking neoclassical cost-benefit models to assign higher existence values to nature and lower discount rates to its use.
For example, in the most cited and well-known paper written in ecological economics, Costanza and a dozen colleagues in 1997 applied what they considered to be the concepts of neoclassical utility theory to assign an economic worth of about $33 trillion — much more than the value of the product of the global economy — to what they called “The Value of the World’s Ecosystem Services and Natural Capital.”51
Ecological economists ended up fully embracing the slogan of mainstream welfare economics that protecting the environment is a matter of getting the prices right. A discipline that just a decade or two earlier had insisted the market was embedded in nature had learned how to embed nature into the market.
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Having caved in to the normative framework of WTP or cost-benefit utility theory, ecological economists have been unable to confront the reasons that led Herman Daly, among others, to reject the market mechanism as an approach to understanding environmental problems. There are exceptions. A few ecological economists chided their colleagues for “commodity fetishism” and called for “conservation based on aesthetic and ethical arguments.”52 They cited the article, “Selling Out on Nature” by Douglas McCauley in Nature magazine, which argued that “conservation must be framed as a moral issue,” because nature has “an intrinsic value that makes it priceless, and this is reason enough to protect it.”53 Costanza wrote in response, “I do not agree that more progress will be made by appealing to people’s hearts rather than their wallets.”54 Gretchen Daily, a prominent ecological economist, insisted that only by attributing instrumental or economic value to nature can conservationists influence public policy. “We have to completely rethink how we deal with the environment, and we should put a price on it,” she said.55
Ecological economics, when it embraced cost-benefit and market-based valuation, abandoned the ethos of much of the landmark