Posts Tagged ‘George monbiot’

George Monbiot’s latest rant against pricing nature is mis-informed to the extent of being counter-productive to environmental protection. His lack of understanding is compounded by his prejudices against economics.

The opening quote by Rousseau is attractive and a view I sympathise with – we are borrowing the planet from future generations. But Monbiot’s interpretation of it is that all property rights are wrong. He’s forgetting they are the basis of the incredibly prosperous society he benefits from living in.

The view that “nature is being valued and commodified so that it can be exchanged for cash” could be more sensibly given as “nature is being valued and commodified so it isn’t ignored and trashed, but instead people are charged for using it, which means they won’t waste it”.

A fundamental misconception is that this valuation/ commodification is akin to ‘privatisation’. It isn’t, privatisation means a change from public ownership (by the government) to private ownership. Trying to identify how valuable something is doesn’t mean you want to change who owns it.

The article then contains a series of other inaccurate statements, such as:

  • Characterising the “rain and the hills and the rivers” as ecosystem services. They are not. Ecosystem services are the processes that take place in these environments and benefit us all (or not if we destroy our hills with overgrazing because we didn’t value all of their services).
  • Suggesting that biodiversity offsets could be used to compensate for damage to ‘a rare meadow’: offsets, as currently proposed in the UK, would not weaken existing protections because ‘rare meadows’ are designated habitats (SSSIs) which can be classified as ‘not offsetable’.
  • Suggesting that a landscape’s “intrinsic value has already been calculated”: this is an oxymoron. As an environmental economist I recognise that nature has intrinsic value, and furthermore that this is a moral value, not one based on human preferences or measured by money (what environmental economics aims to value based on human preferences is change – the extra benefit provided by protecting the environment and the extra cost of destruction).

The environmental movement needs passionate and articulate leaders, like George Monbiot can be. But leaders need to have their facts straight; if not they will undermine the very cause they are trying to promote.

Like George, I am suspicious of the motivations of the city, and yes, these powerful economic forces, with nature valued at zero, have brought about its destruction. If we abandon the market economy, we need an alternative: can’t think of one? Neither can I. So my suggestion is that we redirect this powerful human force, the market economy, towards saving nature.

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Valuing the environment is a strange notion from a strange discipline isn’t it? Economists are already rather unlovable creatures and now they think they can tell you what the view of the park from your bedroom window is worth. The instinctive reaction to economic valuation of the environment is common and understandable and we’ve heard the phrase, “the price of whatever it is and the value of a something” so many times that the words seem to have lost all meaning. So it should be unsurprising that George Monbiot would call environmental economists involved in the National Ecosystem Assessment (NEA), “well meaning dolts” (we’ve heard worse).

But please, give us a couple of minutes to begin to argue in support of valuation. Although we weren’t directly involved in the NEA ourselves, we have been involved in economic valuation, which has been debated for at least 30 year and has an enormous literature. We aren’t confused by a world without numbers, we just think, well actually we can prove that the numbers help… A LOT!

Despite what Monbiot has implied, economists’ work is not about valuing nature in its entirety in absolute terms. We appreciate that this does not make sense – without nature we cannot exist! Valuation is about the relatively small changes in the environmental resources and the services they provide as a result of the decisions (investment, policy, consumption) made.

It is not economists who put values on the environment. We collect data about implicit and explicit valuations undertaken by individuals, businesses and governments every time they make a decision that will have impacts on the environment.  The warning that economic valuation will result in the swapping of nature for money ignores the fact that this is already inherent in many decisions. For example, destruction of the rainforest occurs largely to rear cattle and grow soybeans not because someone attempted to value the rainforest, but rather the opposite. It occurs because those who make such decisions take the monetary profits into account but ignore the just as real economic costs of deforestation. Economic valuation intends to correct this imbalance in decision-making.

In coming out in support of nuclear power Monbiot has implicitly carried out his own cost-benefit analysis – valuing the risks associated with nuclear power less than the risks associated with continued dependence on fossil fuels and the impact they have on our climate (these, however, are Monbiot’s own values; as environmental economists, we’d suggest he undertake an explicit cost benefit analysis which takes everybody’s values into account).

Environmental campaigning and ethical and moral arguments in favour of the protection of nature continue with or without economic valuation. But do governments and businesses listen? Policy decisions that have environmental impacts are more arbitrary when environmental valuations are excluded. Monbiot also states that, “The environment department rightly points out that businesses and politicians ignore the uncosted damage their decisions might inflict on the natural world and human welfare.” Experience shows that in this context there does not seem to be a better alternative, and Monbiot does not provide one either. Just one example of how economic valuation can be effective comes from our own work on the valuation of the ecosystem services provided by forests. This cost benefit analysis provided a case against the sell-off of the public forest estate.

Which is why it is sad and more than a little hypocritical of Monbiot to make assertions that “the business case… almost always comes out right” without presenting any evidence, aside from a hypothetical exercise in coal mining with no basis in reality. The Exxon Valdez oil spill in the late 1980s provides a famous example in which the business most certainly did not feel as if the valuation was on their side. The conservative estimate of the compensation with which Exxon should be charged was calculated at US$4.85 billion in the early 1990s. Net income in 1990 at Exxon Corporation, (then world’s biggest oil company), was $1.12 billion[1]. They have been fighting this judgement ever since.

In 2001 Sunstein (current Administrator of the White House Office of Information and Regulatory Affairs) stated that: “Assessments of costs and benefits have, for example, helped produce more stringent and rapid regulation of lead in gasoline, promoted more stringent regulation of lead in drinking water, led to stronger controls on air pollution at the Grand Canyon and the Navaho Generating Station, and produced a reformulated gasoline rule that promotes stronger controls on air pollutants.”[2]

There are lots of other issues far more complicated than those brought up by Monbiot. However, rather than being pure reductionist gobbledegook, environmental economics is an established field. We assure you that all of the problems you might be able to think of with what we do have been thought about long and hard and work continues to improve our practice. You may still have many objections to this issue but let us at least reassure you that we aren’t aliens. All (well most) of us would rather be outside than reading a spreadsheet, and we don’t think that numbers can describe the love we all have for the natural world. If you want to continue the conversation we would love to hear from you. Comments below, as always!

Angus, Nursie, Daisy and Betsy.

You can find another rebuttal of Monbiot’s piece by Professor Henry Overman of the LSE Spatial Economics Research Centre here.


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