Common Tragedies

Thoughts on Environmental Economics

Words of truth and challenge

Posted by Daniel Hall on January 20, 2008

In my view anyone doing policy economics has an obligation to learn more about ethics — much more — than the guy in the street would know. Would someone doing experimental economics feel free of the obligation to learn some empirical psychology? Would someone doing trade feel free of the obligation to learn some trade law, some history, and some political science? No. What’s the difference? Economists like to separate the “positive” and “normative” aspects of what they do, but this distinction has not much impressed the moral philosophers who have looked at it nor has it impressed Amartya Sen. The very decision to use economic tools emphasizes some considerations and excludes others. The final policy analysis is not just pure prediction but rather it is also an implicit presentation and weighting of both different kinds of information and different values. So if you are doing policy economics, it is imperative that you think about ethics at a very deep level, and read widely in ethics. You are doing ethics whether you like it or not!

That is Tyler Cowen. He is writing in the specific context of trade — rather than environmental — economics, but the point is a broad one. (Indeed, he links trade to environmental economics in his closing paragraph.) I was struck forcefully by his words. It’s easy to fall into the trap of explaining what the most “efficient” policy is, and then try to duck the distributional questions. Or assume that they are left to be negotiated by “society.” More fundamentally, as Cowen points out, using economics as a tool of policy analysis means weighting values and considerations, thus implying a set of ethical choices.

I feel challenged to try to more explicitly identify the weighted “priors” I bring to any question in environmental economics. This doesn’t mean I’m throwing out benefit-cost analysis as a tool for making policy decisions, but it does mean I’ll try to identify more clearly what influence those priors have on my analysis and be more open to discuss how alternative values could result in different conclusions.

I also started thinking about what texts would be considered required reading in ethics for economists (and perhaps particularly environmental economists). Here is a list from Cowen. Do readers have any suggestions of their own?

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