Transcript Document

The Environment
Public and private goods
 Private: my enjoyment precludes your
enjoyment
– Examples: car, pencil, pint of beer
 Public: my enjoyment doesn’t preclude
your enjoyment
– Examples: beach, park, air, water
Internal and external costs
 Internal costs: borne by agents of action
– Examples: buildings, materials, supplies, labor,
marketing
 External costs: borne by others
– Examples: air and water pollution, noise,
government subsidies, erosion
 External costs = harms to others
External costs on private goods
 Person harmed may pay costs, complain, or
sue for damages
 Someone has an incentive to do something
about the harm
 By holding someone responsible
 Parties may negotiate to have agent pay
cost, making it internal
External costs on public goods
 Nobody harmed can sue for damages
 Nobody has incentive to do anything about
the harm
 Nobody is held responsible
 Nobody is in a position to negotiate to make
agent pay costs
Tragedy of the commons
 People have incentives to
impose costs on public goods
(“the commons”)
 People have no incentives or
standing to make agents pay
costs
 So, public goods inevitably
deteriorate
Liberal solutions
 Regulation: Empower government to
protect public goods from external costs
– Preventing their imposition
 Enforcement of rules
 Taking over decision-making
– Making agents pay costs
Conservative solutions
 Privatization: Make public
goods private, so people have
incentives to protect them
 Coase’s theorem: if
transaction costs are zero,
negotiations among private
parties yield optimal use of
public goods
 So, auction public goods, or at
least rights to impose costs on
them
Liberal Arguments
The Case for Government
Regulation
Costs and benefits
 Problems in computing costs
and benefits
– Not always conflict between
environment and the economy
– How to put value on a life?
– Uncertainty of estimates—
harms and probabilities
– Behaviors OK for one become
dangerous for many
– How much risk is OK? People
differ
Private computations
 Private computations of costs and benefits
are untrustworthy
– People act out of self-interest, not for the
good of society
– People undervalue public goods
– Randomness of harm leads people to
undervalue them (cf. highway deaths)
– Cognitive blindspots: We’re not attuned to
subtle, long-term effects
Private decisions
 Private decisions are
untrustworthy
– The market prefers short- to
long-term horizons for returns
– The market prefers large- to
small-scale investments over
long periods
– Initial investments may be too
large for any private agent to
make
Market failures
 Prisoners’ dilemmas: each can act to
maximize his/her own welfare, given
what others do, and produce less than
optimal outcome
 Individual maximizing —/—> group
maximizing
 Environmental examples: walking on
grass; driving; air and water pollution
 Negligible costs add up
Market failures
 This can happen even if each
acts, not from self-interest, but to
promote the good of the whole
 Utilitarianism is indeterminate—
what happens if we each try to
maximize good doesn’t
necessarily maximize good of
the whole
 Maximizing good requires
coordination
Government solutions
 The government is uniquely able to
make environmental investments
that are
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Small-scale
Long-term
Capital-intensive
Directed at the public good
 Must act to increase humanity’s
margin of error
Conservative arguments
Against government regulation
Tradeoffs
 Tradeoffs: other values matter too
– Prosperity
– Economic growth
– Employment
– Farming
– Leisure
– Pleasure
– Liberty
Environmental Improvement
 Necessity: the environment is
steadily improving
– As people become more affluent,
they choose environmental
goods over other kinds of goods
– Market economies produce
cleaner environments over time
Global Warming
Virtues of markets
 Rent-seeking: seeking a
reward not justified by effort
 People are lazy: Everyone
seeks rent
 In a market economy, there is
competition
 Anyone seeking rent may be
undercut by someone seeking
less rent
 So, market economies
minimize rents
Resource Allocation
 Market economies minimize rents
 Market economies allocate resources to
those who can make the best use of
them
 Market economies allocate resources
optimally
 Coase: if no transaction costs, amount
of pollution would be optimal
Market failure?
 Market failure: sometimes individual
maximizing —/—> group maximizing
 Market allocations aren’t always optimal
 Transaction costs aren’t zero
 Tragedy of the commons arises
 But government regulations face same
problem
Regulatory failure
 Barnett’s lunch law; my corollary
 Added spending and regulation may
produce benefits, with seemingly
negligible costs spread over many people
Tragedy of the Congress
 But small costs add up (Dirksen: “A
billion here, a billion there, and pretty
soon you’re talking about real money!”)
 The costs are imposed on other
people
 Tragedy of the Congress: We
don’t get optimal amount of
government spending and
regulation; we get too much
Individuality
 Regulation requires rules, to be applied
to all similarly situated agents
 But often it is optimal to allow some to
pollute
– General: auto or power plant emissions
– Special circumstances: economic or other
benefits
Distributed knowledge
 People make decisions every day about
tradeoffs between various kinds of goods,
including public goods
 They also negotiate about external harms
 Government officials can’t know enough
to substitute their judgments for those of
millions of people
Why? Public choice theory
 Governments don’t act to
promote the public good
 Bureaucrats act to promote their
own good
 They insulate themselves from
competition, accountability
 They have little incentive
– To resist special interests
– To consider private costs
– To resolve issues efficiently
Undermining accountability
 No citizen has time to analyze every issue
 Those with large interests at stake exert most influence
 Voters assess candidates on the basis of thousands of
issues, making most risk-free for officials; many are not
elected
 Environmental issues concern the future; political rewards
and punishments depend mostly on present effects
 There is no tangible measure of efficiency
Political rent-seeking
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If government decides, there is no competition
Nothing to minimize rents
Decisions are inefficient
Decisions are political
Public goods may be neglected or harmed
Public goods may be protected at excessive expense
Incentives
 If government makes decisions, then people have
incentives to invest time, money, etc., in influencing
political decisions
 Those resources could have been invested in improving
the environment or producing goods and services
 People have greater incentives to weigh tradeoffs than
officials do
 Government regulation makes us all worse off
Case studies
 Internationally
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Soviet Union
Eastern Europe
China
India
Kyoto treaty
 United States
– Hudson River
dredging
– Western forests (fires)
– National Parks
– Ethanol subsidies
– CAFE standards
Kantian Arguments
Who deserves respect?
 Everything has a price or a
dignity
 Human beings do not have a
price; we have dignity
 What about
– Animals?
– Plants?
– Natural formations?
Land ethic & deep ecology
 We must see nature itself as having dignity
 Self-realization: spiritual growth— self —>
other people —> other animals —> nature
itself
 Biocentric equality: All organisms have
equal intrinsic worth and so equal rights to
live and flourish
Criteria for dignity
 All life forms deserve
respect
 But they lack autonomy
 What are the criteria for
having dignity?
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Humans
Animals
Plants
Rocks
Predators
 Many life forms harm other life
forms in order to live
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Carnivores and omnivores
Herbivores
Parasites
Bacteria
 Must minimize harms to other
forms
Basic principles
 Biodiversity is intrinsically and instrumentally
valuable
 Humans may reduce biodiversity only to
meet vital needs
 Flourishing of nonhuman life requires
human population decrease
 Present human interference is excessive
Basic principles
 Policies must be changed to
reduce human interference
 We must appreciate quality of life,
not strive for higher standard of
living
 We face a crisis: population
growth, extinction of species,
ozone depletion, global warming
Ecofeminism
 What gives us a right to dominate nature?
 What allows us to treat nature as having a
price rather than a dignity that requires
respect?
 Logic: cognitive superiority —> moral
superiority —> right to subordinate—
assign a price
The logic of domination
 Argument
– We can change our environment
– Plants and rocks can’t
– What can change its environment is
morally superior to what can’t
– Moral superiority justifies subordination
– So, we have a right to subordinate plants
and rocks
Nature <—> Women
 Similar reasoning justifies domination of
women
– Women identified with nature
– Men with humanity as a whole
– What is identified with humanity is morally
superior to what is identified with nature
– Moral superiority justifies subordination
– So, men have a right to subordinate women
A faulty premise
 Feminists reject that conclusion
 If the conclusion is false, then
– The argument is invalid, or
– At least one premise must be false
 One false premise: moral superiority
does not justify subordination
 But then the argument about nature falls
too
Ecology <—> feminism
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These arguments stand or fall together
So, environmentalists should be feminists
Feminists should be environmentalists
We must rethink our relation to nature
We should relate to nature without
subordinating it
Conservative arguments
Against government regulation
People over penguins
 Only people have
dignity. Arguments:
– Common sense view
– Only we can live
according to a rational
plan
– Only we count as moral
agents
– Only we have
autonomy
People over penguins
 We depend on the health of
other species; we mustn’t
destroy them
 We share interests with other
species (e.g., clean air and
water)
 Penguins can’t vote; no one has
the right to speak for them
 No value without humans
The Environment
Resources
 We have the right to use what we need for our
own
– Survival
– Biological welfare
– Rational agency
 But we must not go beyond that
 We have no right to domination for its own sake
 We must not do anything that would threaten our
own survival, biological welfare, or rationality
Virtue as a mean
 Environmental concern is a virtue
 We can have too little or too much constraint
on our desire to use resources for our own
purposes
 Too little:
recklessness
 Virtue:
responsible stewardship
 Too much: inefficiency, ineffectiveness
Responsible stewardship
 We must constrain our own drives to
– Pursue wealth and convenience without regard
to environmental consequences
– Impose costs on others
– Impose costs on the commons
– Exploit the environment for present benefits,
without concern for the future, especially future
generations
Tradeoffs
 Other values matter too
– Prosperity
– Economic growth
– Employment
– Agriculture
– Leisure
– Pleasure
– Liberty
Necessity
 The environment is steadily improving
– As people become more affluent, they choose
environmental goods over other kinds of goods
– Market economies produce cleaner environments over
time
– Water and air quality have improved
– Human health is better than ever
– Nevertheless, there remains much room for
improvement
Complexity
 Regulation requires rules, to be applied
to all similarly situated agents
 But often it is optimal to allow some to
pollute
– General: auto or power plant emissions
– Special circumstances: economic or other
benefits
Distributed knowledge
 People make decisions every day about
tradeoffs between various kinds of goods,
including public goods
 They also negotiate about external harms
 Government officials can’t know enough
to substitute their judgments for those of
millions of people
Tradition
 Burke: given complexity, competing goods,
– We must seek balance, compromise
– Judged on the basis of experience
– Without relying on universal rules
 The social arrangements that evolve for
doing this are likely to be better than any we
consciously devise
 They embody distributed information and
wisdom over time
Why? Public choice theory
 Governments don’t act to promote the
public good
 Bureaucrats act to promote their own good
 They insulate themselves from competition,
accountability
 They have little incentive
– To resist special interests
– To consider private costs
– To resolve issues efficiently
Undermining accountability
 No citizen has time to analyze every issue
 Those with large interests at stake exert
most influence
 Voters assess candidates on the basis of
thousands of issues, making most risk-free
for officials; many are not elected
Undermining accountability
 Environmental issues concern the future
 Political rewards and punishments depend
mostly on present effects
 There is no tangible measure of efficiency
Political rent-seeking
 If government decides, there is no
competition
 Nothing to minimize rents
 Decisions are inefficient
 Decisions are political
 Public goods may be neglected or harmed
 Public goods may be protected at excessive
expense
Incentives
 If government makes decisions, then people have
incentives to invest time, money, etc., in
influencing political decisions
 Those resources could have been invested in
improving the environment or producing goods
and services
 People have greater incentives to weigh tradeoffs
than officials do
 Government regulation often makes us all worse
off
Case studies
 Internationally
–
–
–
–
–
Soviet Union
Eastern Europe
China
India
Kyoto treaty
 United States
–
–
–
–
–
Hudson River dredging
Western forests (fires)
National Parks
Ethanol subsidies
CAFE standards