THE SUSTAINABILITY PRINCIPLE
Pricing environmental goods
The market value accorded to parts of the environment clearly depends on who is doing the valuing and how it is done. CBA 'privileges some forms of expertise at the expense of others'.
The economists who carry out the willingness-to-pay surveys become the central experts, while those who have knowledge of local environments and how they might be threatened are sidelined and may not even have a chance to inform the wider public of these threats because of the way in which public debate and discussion is curtailed (Corner House 1999).But how can economists, or the laypeople they survey, know how to accurately value an ecosystem when they don't even know all the functions it performs? Consider the functions that a simple tree performs (see table 8.1) and how much more difficult it is to know the functions of a complex ecosystem. Willingness-to-pay surveys take account of the functions of parts of an ecosystem only to the extent that the people surveyed are knowledgeable about them and are influenced by this knowledge in their responses.
Individual preferences are shaped to a large extent by the information available to people about the consequences of their choices - and that information is usually partial, often distorted and mostly shaped by the media. Those surveyed may think a wetland area is unattractive and not worth anything, and thus be unwilling to pay to protect it, even though the wetland has important ecological values - which they are unaware of.
Table 8.1 Some of the tasks performed by trees
stabilising the soil cooling the air intercepting the rain reducing fuel costs increasing property values providing beauty giving privacy encouraging recreation improving personal health providing habitat for birds preventing salination
recycling nutrients modifying wind turbulence absorbing toxic substances neutralising sewage enhancing social awareness cutting noise promoting tourism reducing stress providing fruit for humans regulating the water table providing shelter
Source: (Beckham 1991: 16)
What is more, many people, when asked about what they are willing to pay to protect the environment, give an amount that they would make as a donation to a good cause rather than the amount they actually think that part of the environment is worth.
This is probably why surveyors 'found that people were willing to pay the same amount for saving 2000 birds, as for 20,000, or 200,000' (Ackerman amp; Heinzerling 2004: 163).Each of the methods of valuation used by economists provides only a partial measure of environmental value. The use of proxies such as travel costs, for example, assumes that people only travel to an area if the cost of getting there is less than the benefits they get from being there. It also assumes that use of the area for recreation constitutes its sole value, and that the cost of travel reflects how much people are prepared to pay for its preservation. However, an area may be valuable for other reasons; and people may be restrained from going there more frequently, not because of the cost of travel, but because of other commitments. For all these reasons, the true value of the area to the community and to the health of local ecosystems is undervalued by such methods.
Will market pricing save the environment?
Those in favour of valuation admit the difficulty of getting an accurate dollar value, but answer that 'even a partial valuation in monetary terms of the benefits of conserving biological resources can provide at least a lower limit to the full range of benefits'. They are therefore 'important in crystallizing those issues involving implicit value judgements that may otherwise be ignored' (McNeely et al. 1990: 26-7).
David Ehrenfeld (1988: 213), a US professor of biology, points out that attaching a dollar value to a species still does not guarantee its survival. He points to a study done by a mathematician in 1973 which showed that: it was economically preferable to kill every blue whale left in the oceans as fast as possible and reinvest the profits in growth industries rather than to wait for the species to recover to the point where it could sustain an annual catch.
Some environmentalists favour the idea of pricing the environment, believing that decision makers will not protect it unless they can see how much it is worth.
They hope that by incorporating environmental costs into national accounts figures and CBAs, more notice will be taken of the environment. British environmentalist Jonathon Porritt (quoted in Lohmann 1991: 194) argues that 'when you are talking to the people who are really in the business of destroying the environment, you have to use concepts that will allow them to begin to understand what we're saying'.Larry Lohmann (1991: 194) responds to Porritt by pointing out that more environmental battles are won by local people chanting and demonstrating in their own language, and forcing leaders to listen to them, than by people 'who allow their views to be phrased in consultants' cost-benefit terms'.
Other environmentalists argue that adapting CBA and national accounts to include environmental values will not change the power structure, and that it will not be environmentalists who put monetary values on the environment but economists employed by industry and government. Also, while CBA may save individual areas of the environment that are threatened by less profitable developments, they are only saved until a more profitable development comes along. In the meantime, other parts of the environment are progressively traded off for economic benefits.
Substitutability
Whereas profits can be made from a variety of activities, the loss of environmental quality cannot be so easily replaced. CBA, by converting environmental values into monetary terms, assumes that all 'goods' are interchangeable and replaceable without overall loss of welfare. It assumes that a community can continue to use up its natural resources and degrade its natural environment just as long as it is increasing its wealth and infrastructure by an equivalent economic value. The fact that a region is becoming a more sterile, artificial and dangerous place in which to live is supposedly compensated for by the comforts and entertainments residents are able to buy.
Similarly, an adjusted GNP figure is merely a way of measuring weak sustainability.
It assumes that as long as total capital, human plus natural, is increasing then welfare is increasing. But this allows for the gradual deterioration of the environment as long as the total capital stocks are increasing. As was seen in chapter 4, however, there are several reasons for maintaining a certain level of 'natural capital', including the irreversibility of much environmental depletion; the fact that such substitution reduces the resilience of natural systems; our inability to know which parts of the environment can be replaced, and the long-term consequences of continual degradation.The strong sustainability position, which is the precautionary position, is that some environmental values are not replaceable and their loss should not be weighed against economic benefits. This is incorporated into the US Endangered Species Act, which accords endangered species an 'incalculable value' (de Sadeleer 2002: 171).