Download SzeghiEcological Economics Homo Economicus

Ecological Economics Homo Economicus, the Market, and Global Solutions
By Dr. Steve Szeghi, Professor of Economics, Wilmington College
Thoughts shared on UN Commission “Harmony with Nature – theme Earth Jurisprudence”
The Navajo (Dine) have a word and the word is hozho. There is no exact translation, but includes the
sense of harmony with nature as well as walking in beauty, the freedom to bask in the beauty that is the
earth and the sky. The question before us is how to comport our economics, specifically our ecological
economics to see the beauty about us, and to walk (to live our lives) that respect that beauty.
Our Economics
Theoretically the Economy is supposed to include absolutely everything that People value, absolutely
everything that human beings derive benefits from. Every benefit cost calculation should be done on
the basis of the full value of every benefit and every cost. But this is seldom done in practice.
A true ecological economics would value ecological systems, the environment, other species, and land
not merely on the basis of their “economic” or pecuniary value, but also on the basis of their full value
first to human beings, but it should not end there. The valuing of Nature should include more than the
full value that human beings assign to her. It should also include the benefits enjoyed by all other
species as well as all the elements of earth and sky, in other words the value of the rest of nature to
itself.
Although a true ecological economics would include far more than homo-centric calculus it would be a
wonderful start in the proper direction to get a full accounting of the value of the rest of nature to
human beings. Certainly part of nature’s value to people are the commercial uses to which the elements
of the natural world are put. But this should be done with a full accounting of the costs not the mere
benefits of this use. The possible future uses that are eliminated as a result of current use, must be
counted as a cost. The future costs or alternatively benefits should not be discounted as they are
typically done in benefit-cost analysis. Maybe something used today has a higher value future use.
Perhaps the value of oil used to make plastic in the future is greater than the value of it being burnt for
fuel today.
It should be kept in mind that both a high enough discount rate as well as a sufficiently long time
horizon allow future benefits and costs to essentially count for nothing in the standard B-C formula. If a
current practice results in the future mass extinction of species, even of human beings, as a result of a
current project or action, at a high enough discount rate that future cost would not count for much at all
in what is currently considered optimal. This is madness. We need to end the practice of discounting the
future if we are to ever get a true ecological economics off the ground.
In whatever time period we consider we must also fully value nature. It is another step in the right
direction to consider the alternative use values of all the elements of nature. As an example if a
wilderness or national forest area could be timbered today, we must consider the sacrifice of that
wilderness area as a cost. But how are we to measure the value of wilderness or forest to people?
Human beings enjoy wilderness and forests, they take vacations. They spend money in order to take
vacations in the National Parks, and that is sometimes estimated in value analysis. But what of the
experience itself? That is part of the value but is not usually counted. If a couple goes on a hike in a
National Park, we can count what they paid to get to the Park, we may count what they paid to travel to
the park, and the admittance fee, and the lodging rate but what of the hike itself? The value of the
experience itself is quite more than the costs to have the experience. A true ecological economics would
include the full value of the experience.
In addition to the value of nature to individual human beings, there may well be a value to the entire
human community or communities that exceed the sum of the values to individual human beings. The
standard utilitarian calculation completely misses the benefits or costs that accrue to the whole, to the
group.
But the value of wilderness and of forests and parks to people is quite beyond the benefits of the people
who travel to these places. It should also include all the benefits derived by all the people who never
travel there who enjoy pictures, or videos, or the sounds of nature recorded in these places. And then
there is also the value to people of just knowing these places exist, even if they never visit. We are a
long way away from fully valuing all the benefits that human beings derive from nature.
Going beyond homocentric valuation
In addition to the benefits of other species and nature to human beings we must also consider the
benefits of other species and nature to itself. So in addition to its value to humans, any other species
has a value to itself, but it also has a value to other species in addition to humans, a value to the
ecosystem. Eco-systems in turn have a value to each species within them including individual human
beings as well as the human community.
Finally a true ecological economics must go being valuing nature and other species. There is something
inherently flawed in looking upon other species and the rest of nature solely in terms of costs and
benefits of various uses. And this is so even if we include the benefits and costs of other species to
themselves.
We have relationships with ourselves, with other human beings, with other species, and with all the
elements of the rest of nature. The nurturing, cultivation, and maintaining of our relationships is not
only necessary for our happiness but also for the sake of our ethical sanity and spiritual health. The
egoistic calculation of costs and benefits, the rational calculus of homo economicus is an impediment to
true relationship. Relationship is founded in an appreciation and respect for the other. It is founded in
an awareness of the other, of the existence of the other, that the other has the right to existence. And
so our ecological economics must go beyond a mere analysis of what we should do based upon costs
and benefits even if it manages to be all inclusive. Ecological Economics must embrace the moral and
ethical dimension and that must be grounded in respect and reverence for the rest of nature, without
which true relationship will elude us.
How to Live in Harmony with Nature
Global solutions are of course essential in order to do all of the following:
-
Reduce our ecological footprint
Reduce carbon emissions
Enhance and enlarge critical habitat for other species particularly those endangered by human
economic activities
Maintenance and enlargement of Public Lands and their protections through Wilderness and
other designations
Incentives and fines to encourage certain ecology friendly uses of private land
Establishment and enlargement of wildlife corridors
Reforestation
The various nations of the world must come to some sort of agreement to establish these goals with
each country assigned specific goals and targets to hit. There needs to be flexibility and fluidity in how
each country hits and achieves their goals and targets, but we do need some sort of global agreement to
assign targets for each country to hit. Generally the greater the ecological and carbon footprint of a
specific country, the more ambitious should be its reduction goal or target. Also the wealthier a country
is the more ambitious should be its reduction goal. In addition, as a general principle a stick approach
should be used for countries with GDP/N above the global mean; and a carrot approach used for
countries with GDP/N below the global mean. Wealthier countries should be fined when not meeting
their goals and targets, and the fines should be steeper the more so a country is above GDP/N. In
contrast poorer countries should receive subsidies or payments in accordance with how well they are
meeting their targets. The more so a country is below the global mean GDP/N then the more substantial
should be the incentive or subsidy given to a country.
Command and control techniques will undoubtedly be part of a mix of techniques that various nations
choose in meeting their targets. Command and control techniques, such as mandates and regulations
are inherently practical and oftentimes work quite well. There are of course market friendly approaches
such as carbon or pollution taxes that work quite well for specific countries. But it should probably be
left to each nation to come up with the mix of and type of techniques that work best of that nation. But
on the global level we need specific targets and goals as well as an enforcement mechanism when those
agreed upon goals are not hit.
Ultimately we must realize that we do not own the Earth or the land but rather, that we are part of the
Earth. We belong to the land. We must see the earth, the rest of nature, not as merely something to
use, as a commodity but as a community in which we belong. We must seek to be in communion with
the earth, with the rest of the natural world. And ultimately as in a dream might we reach beyond even
communion to communication, as long ago when the bear and the coyote and the raven could talk to
human beings. We were richer then when we walked in beauty; and may we be again.