The Environment

1. The Environment

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. Liberal Arguments The Case for Government Regulation

10. 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

11. 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

12. 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

13. 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

14. 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

15. Government solutions • The government is uniquely able to make environmental investments that are • Small-scale • Long-term • Capital-intensive • Directed at the public good • Must act to increase humanity’s margin of error

16. Conservative arguments Against government regulation

17. Tradeoffs • Tradeoffs: other values matter too • Prosperity • Economic growth • Employment • Farming • Leisure • Pleasure • Liberty

18. 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

19. Global Warming

20. 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

21. 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

22. 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

23. Regulatory failure • Barnett’s lunch law; my corollary • Added spending and regulation may produce benefits, with seemingly negligible costs spread over many people

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. 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

32. Kantian Arguments

33. 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?

34. 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

35. Criteria for dignity • All life forms deserve respect • But they lack autonomy • What are the criteria for having dignity? • Humans • Animals • Plants • Rocks

36. Predators • Many life forms harm other life forms in order to live • Carnivores and omnivores • Herbivores • Parasites • Bacteria • Must minimize harms to other forms

37. 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

38. 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

39. 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

40. 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

41. 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

42. 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

43. Ecology <—> feminism • 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

44. Conservative arguments Against government regulation

45. 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

46. 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

47. The Environment

48. 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

49. 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

50. 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