How can economists best make Gaia happy? By "getting the prices right" on environmental issues like pollution, deforestation, resource depletion and species extinction, thus ensuring sustainable growth in a resolutely market economy? Or by concluding that economic growth as we know it may not actually be sustainable, and humans must radically rework existing socioeconomic structures?
Very roughly speaking, these two poles of thought represent two schools within the sphere of all economists who focus on environmental issues: environmental economics and ecological economics. I am chagrined to note that until last week I didn't even realize that this division formally existed. But then a pair of environmental blogs I've been following of late referenced a study by two German economists who surveyed German environmental and ecological economists to find out what their areas of commonality and difference were on the all-important issue of sustainability.
The economists performed a "cluster analysis" by asking their survey subjects to disagree or agree with such statements as "Creating private property rights over the environment can largely solve the problem of overusing the environment" or "The maintenance of nature has a value in itself, independently of its value for humans." And while there was a certain amount of overlap -- nearly everyone agreed, for example, that "sustainability" was a goal to strive for -- there were also clear demarcations between the groups.
Ecological economists believe that the economy is "dependent for its existence on the ecosystem" and that the value of nature can't be monetized. Humans aren't the center of the universe, they contend, and human values need to change: "ethical dimensions should be part of economic thinking about sustainability." Achieving sustainability means recognizing that the ecosystem can't handle endless, unlimited growth, and that people must live within its means.
Environmental economists reject "fundamental changes of the economic system and restrictions on material consumption." If the right prices are set for environmental goods, i.e., if such things as the climate-change costs of carbon emissions are incorporated into the corporate bottom line, then growth can continue merrily along. Environmental economists fit squarely into the neoclassical economic tradition -- markets know best.
But perhaps the most intriguing difference has to do with something that I had hitherto not associated with environmentalism, per se -- the distribution of wealth in society. Since ecological economists believe that unlimited economic growth is impossible, they naturally don't believe that future growth is the answer to resolving the problems of poverty and inequity that exist now (and contribute to ecological degradation). So they, or at least some fraction of them, argue that wealth redistribution must occur now. Environmental economists reject this crazy talk as unrepentant Marxism. And indeed, if you read the comments at some of the environmental economics blogs that have discussed this paper, you will find that the culture wars are alive and well in this domain. Ecological economists, sniff the environmental economists, are just postmodern wackos, why, they aren't really economists at all.
In a paper tracing the development of ecological economics from the late 1980s to the early 2000s, Danish ecological economist Inge Ropke lends some ammunition to those culture wars. She notes that the interdisciplinary approach pioneered by the early ecological economists proved attractive to "socioeconomists with a background in institutional, evolutionary and Marxian economics, political economy, economic sociology, [and] economics of innovation."
From a distance then, ecological economics looks like something of a grab bag, a place where long-standing political critiques of how human society is organized merge with idealized conceptions of the proper human place in the natural ecosystem. But there is a fundamental worldview: For ecological economists, pollution and species extinction and climate change are consequences of capitalism. For environmental economists they are bugs in the system that can be fixed with some clever tinkering.
Where does How the World Works stand on these dividing lines? I'm going to cop out, and take heart that the clusters that emerge from the German data do not reveal sets that are 100 percent incompatible. Instead, there are regions of fuzzy overlap, suggesting that, in Germany at least, there are economists who believe we can tinker with the system in ways that achieve sustainability and social equity.
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