E-Letter responses to:

p-forum: Gretchen C. Daily, Tore Söderqvist, Sara Aniyar, Kenneth Arrow, Partha Dasgupta, Paul R. Ehrlich, Carl Folke, AnnMari Jansson, Bengt-Owe Jansson, Nils Kautsky, Simon Levin, Jane Lubchenco, Karl-Göran Mäler, David Simpson, David Starrett, David Tilman, and Brian Walker ECOLOGY: The Value of Nature and the Nature of Value Science 2000; 289: 395-396 [Summary] [Full text]

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Published E-Letter responses:

Re: Costs of Environmental Protection

Tore Söderqvist   (17 October 2000)

Costs of Environmental Protection

Brian Czech   (17 October 2000)

Re: Costs of Environmental Protection 17 October 2000
Tore Söderqvist Beijer Institute, the Royal Swedish Academy of Sciences Respond to this E-Letter: Re: Re: Costs of Environmental Protection	Brian Czech suggests that efforts to protect environmental resources may have to be paid by activities that degrade the environment, resulting in a perverse, net loss of natural capital. His argument, that capital accumulation is a zero sum game, is both wrong and dangerous. The net loss situation that he envisions can be avoided precisely by incorporating in decision-making the returns to society from investments in natural capital. Economic valuation is one important tool for making these returns visible to decision-makers. The approach we advocate in our Policy Forum would lead, in general, to the opposite result than that suggested by Czech. Gretchen C. Daily, Tore Söderqvist, Sara Aniyar, Kenneth Arrow, Paul R. Ehrlich, Carl Folke, AnnMari Jansson, Bengt-Owe Jansson, Nils Kautsky, Simon Levin, Karl- Göran Mäler, David Simpson, David Starrett, David Tilman, and Brian Walker
Costs of Environmental Protection 17 October 2000
Brian Czech U.S. Fish and Wildlife Service Respond to this E-Letter: Re: Costs of Environmental Protection	In their Policy Forum, Daily et al. note that “the world’s ecosystems are capital assets” that have escaped valuation and have therefore been mismanaged. They acknowledge that valuation “is one tool in the much larger politics of decision- making,” but continue, “together with financial instruments and institutional arrangements that allow individuals to capture the value of ecosystem assets, however, the process of valuation can lead to profoundly favorable effects.” Notwithstanding the authors’ intent, the resulting focus on increasing value may be readily transformed in policy circles to a prescription of economic growth, especially as some societal costs are internalized by means of reforms such as carbon sequestration payments. In my book "Shoveling fuel for a runaway train: errant economists, shameful spenders, and a plan to stop them all," I explain that a major barrier to sound macroeconomic - and therefore environmental - policy is the lack of understanding of the origins of money. As Adam Smith pointed out, it is agricultural/extractive surplus and subsequent division of labor that makes money a meaningful concept. We can buy environmental protection, but only by liquidating natural capital (for example, prairies, forests, fisheries) to generate the funds; even “information” economies are built in proportion to such liquidation. The reinvestment in natural capital never equals the amount liquidated because of procedural inefficiency and profit-taking. Daily et al. do a vital service by reiterating the importance of the world’s natural capital to the human prospect; the next step is to focus on stabilizing the scale of human economy. John Stuart Mill developed such a focus with the “stationary state,” which was resurrected by Herman Daly in the form of the “steady state economy.” This time around, we should keep the message alive; posterity is running out of chances. References 1. B. Czech, "Shoveling fuel for a runaway train: errant economists, shameful spenders, and a plan to stop them all," (Univ. of California Press, Berkeley, 2000).