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Economics is the study of decision-making in the presence of scarcity. Scarcity exists. Tradeoffs exist. The tradeoff between money and natural environments exi

by uvdiv 16y ago

Economics is the study of decision-making in the presence of scarcity. Scarcity exists. Tradeoffs exist. The tradeoff between money and natural environments exists, and making choices by definition involves making comparative value judgments. It's willful ignorance to deny this. "The utilitarianism also troubles some environmentalists: What happens when the filtration plant becomes cheaper than conservation easements?" Or in less loaded language (and generalizing the monetary cost to encompass all ethical and aesthetic utility functions): what happens if building a filtration plant is a better choice than conserving a watershed? Is this thought unspeakable? If that is never a better choice, than environmentalists having nothing to worry about; and if it could be a better choice, than refusing to consider it is irrational and destructive. This is the unpleasant reality: there is a tradeoff between environmental protection and human labor. When conservation is monetarily the more costly choice, conservation means people are forced to spend more labor to obtain the same resource. A more expensive water supply means more hours of work expended to pay utility bills. You make comparative value judgments here whether you acknowledge it or not: to make an ethical proclamation saying environments are "priceless" is to simultaneously value human labor as worthless.

rayiner 16y ago
> what happens if building a filtration plant is a better choice than conserving a watershed? Is this thought unspeakable? If that is never a better choice, than environmentalists having nothing to worry about; and if it could be a better choice, than refusing to consider it is irrational and destructive. In any case, the worry of environmentalists is far in the future. Today, we generally make our economic decisions by pricing the ecological value of the environment at $0. Say a developer wants to buy forested land for $10m and create a housing complex worth $30m. We consider that an economically beneficial transaction, resulting in $20m in net benefit. But that's not the actual calculus. What if the forest is providing $50m in ecological services? Carbon sequestration, groundwater purification, prevention of soil erosion, etc. Our error results from treating the $10m price of the forest as the actual cost of constructing the housing complex. That is, of course, not true. The $10m is simply the value of one slice of property rights: the right to exclusive possession of the land. It's not the net value of the land. When the developer comes in and builds that housing complex, it does so not because it's economically efficient overall, but because it is advantageous to the developer. It yields $20m in net benefit for the developer, even though it costs society as a whole $30m. Environmentalism, in my opinion, fails in not couching its arguments in this manner. People aren't sympathetic to arguments that a $30m housing complex should be stopped in order to preserve the beauty of the forest. They are likely much more sympathetic to the simple fact that in return for that developer profiting $20m from the destruction of the forest, the surrounding community will have to spend $50m in air and water purification, wastewater treatment, erosion control, etc.

by uvdiv 16y ago

rayiner 16y ago

> what happens if building a filtration plant is a better choice than conserving a watershed? Is this thought unspeakable? If that is never a better choice, than environmentalists having nothing to worry about; and if it could be a better choice, than refusing to consider it is irrational and destructive. In any case, the worry of environmentalists is far in the future. Today, we generally make our economic decisions by pricing the ecological value of the environment at $0. Say a developer wants to buy forested land for $10m and create a housing complex worth $30m. We consider that an economically beneficial transaction, resulting in $20m in net benefit. But that's not the actual calculus. What if the forest is providing $50m in ecological services? Carbon sequestration, groundwater purification, prevention of soil erosion, etc. Our error results from treating the $10m price of the forest as the actual cost of constructing the housing complex. That is, of course, not true. The $10m is simply the value of one slice of property rights: the right to exclusive possession of the land. It's not the net value of the land. When the developer comes in and builds that housing complex, it does so not because it's economically efficient overall, but because it is advantageous to the developer. It yields $20m in net benefit for the developer, even though it costs society as a whole $30m. Environmentalism, in my opinion, fails in not couching its arguments in this manner. People aren't sympathetic to arguments that a $30m housing complex should be stopped in order to preserve the beauty of the forest. They are likely much more sympathetic to the simple fact that in return for that developer profiting $20m from the destruction of the forest, the surrounding community will have to spend $50m in air and water purification, wastewater treatment, erosion control, etc.