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V. Debate On Environmental Valuation

The revival of interest in CBA, CV and valuation of so called public goods has centered on environmental and ecological economics. These tools, which have not proved of widespread practical use in the last few decades, have to be reassessed in relation to the revival of debate on valuation. This is well covered in the literature by several strands, the proponents of which do not interact productively. Some suggest economics is a specialized branch of ecology that deals with humans, the only species known to be capable of reasoning. The rest of ecology deals exclusively with the non-human world, where ethics and morality do not exist. Some say even if it were possible to close the gap between the constraints of economics and the discourse of ecology, not much would be achieved because of the profit motive and the markets' inherent antagonism to the future, especially given the uncertainty of ecological analysis. So the case for conservation relies on risk aversion, although the gap between economics and ecology persists because of bad economics (Rees, 1994, p.1650-1). Various strands in this debate need to be understood.

Political and ecological discourse

Even within ecology, discourses conflict. Much of the early eco-politics, with its hatred of profit and big business, has a foundation in socialism and neo-Marxism. But Marxism is too concerned with human values to protect the environment; whereas deeper, greener, unconstrained priority for the conservation of nature neglects social justice, even to the point of neglecting human survival (Castree, 1994, reviewing Pepper, 1993, p. 496).

The green discourse ranges from anarchical to mystical, driven by desire to intervene and to control global capitalist pressures. The agenda of eco-socialism is to change society to offer "a radical socially just, environmentally benign - but fundamentally anthropocentric perspective on green issues," (Pepper, 1993 page xi) Amen! Castree (1994, p. 497) reports that Pepper thinks Marxism might help "overcome the woolly-mindedness and incoherence," of much green thought; whereas anarchism "explains the weakness of such ecologism," (Castree, 1994, reviewing Pepper, 1993). This ecological discourse is pursued at too high a level of academic abstraction to guide planners and policy makers, never mind voters operating in a political context. But this debate seems to have one foot tentatively on the ground compared with the post-modern discourse, which substitutes perception for scientific reality, and blurs distinctions between the social, technical, and organic in the attempt to interpret nature (Willems-Braun, 1994, pp. 1803-1814).

Hajer (1995, p.39 )says "ecological modernization can be seen as an attempt to take the sting out of the tail of radical environmentalism". This is not a new concept, as might be implied by current debate (Cohen, 1997, reviewing Hajer, p.111). Hajer shows (Cohen, 1997, reviewing Hajer, p. 112) "how language is used to create knowledge claims" (shades of current management science!), which leads to eclectic political responses to environment issues. Cohen says it is not clear that ecological modernism has changed policy formulation "in a more than superficial way." Hajer, coming from the angle of post-modern discourse, calls for a "social learning process. . . within a legal framework," (ibid. 1997, p113). Beckerman (1997), with rigorous economic analysis, favors political consensus rather than the quantitative CBA and CV. This approach has been suggested by McFarquhar, (1996), and is discussed below.

What is clear is that the debate within ecology economics and ethics does not begin to integrate the analysis of social sciences in a way that can be helpful in practical politics. This impasse may be reduced by institutions operating in a more devolved political context. For a recent but inconclusive guide to the relation between environmental discourse and politics, see Garner (1995), Hajer (1995) and Jacobs (1996). See also Gare.(1995) for an exhaustive, and exhausting, review of postmodernism and the environmental crisis.


Anthropocentrism suffuses ecology debate and considers humans the center of the world. Only humans are of ethical value justifying preferential consideration. Hayward (1997, p.49-63), summarizing a number of writers, explains that human centeredness (HC) is unavoidable and unobjectionable; but that, in environmentalism, HC gives rise to the species debate. Speciesism occurs when humans favor their own species over others which have instrumental but not intrinsic worth. Neglecting the dignity of other species leads to human chauvinism. Speciesists may decide an animal lacks moral features qualifying for dignity. HC permeates the debate, which sets the criteria regarding both qualifying features and moral relevance.

Speciesism is difficult to avoid because attitudes develop in the mind of the beholder. But it can be avoided with increasing knowledge showing, for example, that fish are sentient. However, the process always involves "an ineliminable element of anthropocentrism," (Hayward, 1997, p. 56). Selection of non-human values by a human is arbitrary and insidiously anthropocentric. The anthropocentric trades human and arbitrary non-human values. Human chauvinism will not compare humans and non- humans: no evidence would establish equality in terms of moral concern. Since values, which determine ethical action, are the values of the valuer, any attempt at non-anthropocentric ethics depends on human values. Anthropocentrism does "not arise out of a concern of humans with humans but lack of concern for nonhumans," (Hayward, 1997, p. 58) often associated with a lack of concern for other humans! The conclusion is that criticizing anthropocentrism is counterproductive. It is not easy to do justice here to Hayward's seminal analysis concluding that anthropocentrism in ethics is less harmful than trying to avoid it.

For those interested in quantifying values in a CBA, the general debate will seem abstract and para-circular, to parody some of the language. The issue remains; can values be quantified usefully? Whatever the answer, Hayward concludes the debate should avoid anthropocentric considerations.

Opportunity cost (OC), willingness to pay (WTP) and environmental standards

Leaving, temporarily, the ethical for the quantitative, the debate on approximate estimation of environmental values is central. Bowers argues plausibly that environmental standards established as a result of political discourse avoid the valuation problem. In any case, "economics does not have much to say on... how policies are decided beyond some fairly arcane propositions of limited practical import," Bowers (1993, p. 93.). However opportunity costs are relevant for estimating the wealth generations forego in protecting the environment. These OC are not assessed in WTP surveys. But WTP is used to decide individual issues in planning, not general policies, and the aggregation effects are ignored.

Even ironic reports that, in the US, people say they are willing to pay $30 or whatever to preserve an elephant this week, $40 for a rhino next week, and so on until the money for WTP questionnaires runs out, do not deter the supporters of WTP surveys. Beckerman and Pasek (1997, p. 79) report that most critics of CV in environmental valuation, "fail to recognise the problem of resource constraints in environmental policy.... Or its full significance." No resource constraints means there is no problem, no need for economists! Bowers (1993, p. 93.) emphasizes the importance of the opportunity cost of protection, whereas WTP applies to a site or entity which is part of a potential policy. WTP, being disaggregated, does not apply to a policy; but rather to its component parts. Bowers reports, "it would be inconsistent to subscribe to a policy yet demand that each application of that policy is subject to separate decision with no presumption in favor of the policy." Moreover, WTP as a procedure leads to no policy ex post, since WTP sample populations differ in all respects.

More relevant is WTP for a policy. "Each application of that policy (cannot be) subject to separate decision," (ibid.). So, Bowers concludes that advocates of WTP "must be thinking of some alternative model of decision-making." To see WTP as a procedure for setting policy is to have no policy at all since aggregate outcomes cannot be guaranteed. Beckerman and Pasek (1997) remind us of the same issues in terms of the "embedding" objection to CVs as serial voting using WTP that ignores resource restraints (a habitat this week, a forest next, an endangered species the following). This highlights the weakness of WTP in dealing with recurring issues.

A further fundamental theoretical weakness of WTP is that it depends on treating all environmental problems as externalities. Conflict between polluter and polluted can be minimized by WTP where trade is possible, or by a Pigovian tax or subsidy where it is not. Both externalities and public goods considerations are often irrelevant or exaggerated. Most positive environmental externalities do not meet the Pigovian assumption of mutual recognition of effects by polluter and polluted, of location in time and space, and "cannot be simply viewed as Pigovian externalities," (Beckerman and Pasek 1997, p.96). On the other hand many quasi-public goods are easily located spatially, and rent could be collected (Foldvary, 1994). Is a tax to subsidize a public park or the opera justifiable in principle by WTP, or by isolated income redistribution objectives; i.e., by providing what people want but some cannot afford or by making the poor taxpayer subsidize pleasures of the rich?

Other difficulties of WTP are summarized in the literature. (Carson, 1991, Table 5.3). Some relate to the overwhelming influence of how a question is put and the fact that the respondent has no reference point. Where there is no direct consumer experience, there is no true contingent valuation (Bowers, 1993, p. 93). Bowers concludes that WTP is relevant in principle where there is no prior commitment to an overall standard; otherwise OC is the relevant valuation. In practice, lack of direct experience on the part of respondents and lack of conditions defining Pigovian externalities generally rules out WTP. No economic meaning can be attached to WTP (ibid. p. 99).

Long time advocates of WTP blandly reject this criticism that there is no " true " value or benchmark. See the survey by Freeman (1994). "If there was a benchmark the inference procedure (WTP) would not be needed," (Pearce, 1995, pp 1300-1337). But surely a benchmark constructed sloppily and dependent on dubious assumptions may be counter-productive for producing a valuation with which most parties might agree. The debate is about the potential contribution of economic techniques to what is essentially a political process. Exaggerated claims of the contribution of economic techniques, especially those found wanting over several decades, are counter-productive to their legitimate use to inform a political decision.

This was recently demonstrated in a BBC broadcast that discredited all attempts at valuation as absurd and odious (BBC Compass, 1997). Academics, politicians and planners are derided for valuing chalk downs at two pounds per British citizen or grizzly bears at $18.50 each in the United States (Sunday Times, 1998) In the same BBC broadcast, Professor Pearce emphasized the rapid increase in demand for CV estimates, and the desperation of planners and politicians for a figure (the impression was, for any figure) to "settle" arguments.

Plural values and valuation

Much of the recent debate has centered on the idea of plural values and what is elusively termed manufactured objectives. Remember, an economic goal is most easily conceived as the maximizing of one objective (function) subject to constraints. Plurality can be considered in terms of alternative "bundles" in the objective function to which specific weights are attached. A non-economic approach depends on intuitive weighting in a political decision context in which the economic assessment is sometimes peripheral, sometimes irrelevant.

Further, relative consumer preference is neglected in relative consumer expenditure. This arises because utility measures do not capture moral aspects of preferences (Beckerman, et al.1997, pp.65-86, Elster, J. and Hylland, A., 1986). In welfare economics this means there is no more reason to accept a given set of preferences in the environment than elsewhere where moral values are involved: Neo-classical utility maximization cannot include incommensurate plural values. Is there something different about the environment that attracts application of theories of plural values and critics of utilitarianism? Criticism centers on the notion that some values are incommensurate with those in CBA or CV. Respondents in CV surveys may say that no amount of money is sufficient to compensate for an environmental loss.

The difficulty is that respondents to CV surveys seem to relate to their role as consumers rather than citizens. But the environment cannot be valued as a marketable good (Beckerman 1995, p.69). For Beckerman and Pasek (1997), environmental goods are incommensurable if they cannot be included in CBA as a single metric. They accept that people exercise choice faced with genuine incommensurate options. This rejects the assumption in economics that choice implies maximization of some unique value.

Bowers (1993, p.99) concludes in his survey on valuation of environment, "where the environmental effect is not subject to direct consumer perception there is no true contingent valuation to which surveys can approximate and the valuations obtained are therefore an artifact of the survey process."

Perceptions of value and social relations

Moreover there seems to be little evidence of a moral system that distinguishes environment values from other values and which excludes trade off considerations (ibid p.72). But modes of valuation appropriate to the environment should be commensurate with other modes based on costs and benefits. Anderson (1993) and others say different values of environment may be founded in a complex of individual perception of goods (environmental) in relation to other people and to the situation in which the goods are perceived. So values differ with the individual's perception of the social and psychological relationships. This contrasts with the notion of narrative, essential in some strands of social science and founded in post-structuralist derivatives, not to mention the influence of Focault and Derrida. On the other hand the meta-narratives of science and religion are, according to Lyotard, no longer credible. So we have to fill the gap with our own narratives reflecting individual perceptions: More chaos theory and cyborgism - no more master plan. For a recent critique of the postmodernity versus antimodernity dispute, see Zimmerman (1994), who discusses deep ecology in relation to reformist environmentalism, Heidegger, the postmodernists, social ecology, transpersonal psychology, eco-feminism, chaos theory, evolutionary liberalism and cyborgism, new age and new paradigm counter culturalism (Gare, 1995, p.114). Confused? Where will it all end? Not likely in a functional conclusion, and more likely not ever

This general line of reasoning admits qualitative values that cannot be aggregated or capable of money equivalence. These would apply to some environmental goods that cannot, as a result, be substituted for other marketable goods. Motives are irrelevant in the purchase of market goods, but discourse may be relevant in decisions about environmental goods, which are public, and where consumption may be affected by relationships.

Beckerman and Pasek (1997) recognize that environmental goods may be different but not necessarily superior, so how is a rational choice to be made? Decisions are made frequently between incommensurates, by relaxing the strict constraints of rationale in neo-classical economics. Choice is based on a differentiated rationality that reflects social perceptions. Such "expressive rationality "eludes both comparability and commensurability," (Beckerman and Pasek, 1997, p.77). Choice involving environment goods can be inconsistent with a money numeraire but still be rational, even if no longer subject to the constraints of welfare economics.

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