9 good reasons why environmentalist should call themselves economists

13/02/2012 / Kaj

Charles Secrett, well known environmentalist explains:

Let’s start with the apparently bad one … Economists!? Please god, no. A thousand times, no. Why on earth would environmentalists, who come in all shapes, sizes and disciplines, want to be named after the ‘dismal scientists’ (to paraphrase Thomas Carlyle)? We might as well call ourselves bankers.

But that might not be a bad thing either. If you choose your economic approach and type of bank based on society’s needs and evidence of what works best for the real world. Zealot monetarists from the Chicago School, living in the never-never land of rational free markets, ivory-tower academics reducing the all-too human complexities of producer-consumer-investor behaviour to arcane mathematical formulae, or algorithm driven spiv-speculators playing very dangerous games on their super-fast-super-connected-super-computers, do not the tribes of economists or bankers make.

Though they do tend to win most of the prizes, the ears of politicians and press attention.

There are many truly great ‘green’ economists from E.F Schumacher to Amartya Sen (the Nobel Committee got one right at least), who recognise the full productive value of delivering sustainable development (sustainability) in the round, generating honest capital and maximising human well-being. We can call this environmental or green economics. Just as there are great green banks like Triodos and the Cooperative, which show how responsible, productive wealth creation goes hand-in-hand with environmental safeguards and social good (and which made strong profits throughout the latest credit-debt crisis).

Read all 9 good reasons in this link.

This article was first published by Charles Secrett, Founder of the Robertsbridge Group in February 2012. Charles Secrett is also Chair of  The Triodos Bank Renewable Energy Fund. Some of his earlier work:  Advisor and Programme Director (Sustainable Cities), Respect, Special Advisor on Climate, Environment and Sustainability to the Office of The Mayor of London and Visit London and Executive Director, Friends of the Earth(FOE) (England, Wales and Northern Ireland).

 

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  1. I previously commented on LinkedIN and it seems best to have it posted here.

    I wondered if there is a danger with ecosystem assessment that it sustains an economic hegemony on how we value things, and what we value (i.e. it has monetary worth, therefore it is valuable and vice-versa)?

    I can see the value as a tool, such as DEFRA has employed, to show a rational case for the protection of ecosystem services, biodiversity and natural assets. Yet, it rather feels like the continuation of a dogma that allows markets to assess the best way forward, that allows ecological debt to be traded for profit, and that GDP alone is the measure of quality of life and progress. Perhaps I view it as a starting point for dialogue with economists, but with a view to changing our value framework and our medium for worth, material exchange, and policy formation.

    There’s a quote from EF Schumacher, whom the article cites, that I think is worth remembering.

    Small Is Beautiful (p.43):
    “In the market-place”, for practical reasons, innumerable qualitative distinctions which are of vital importance for man and society are suppressed; they are not allowed to surface. Thus the reign of quantity celebrates its greatest triumphs in ‘The Market’. Everything is equated with everything else. To equate things means to give them a price and thus to make them exchangeable. To the extent that economic thinking is based on the market, it takes the sacredness out of life, because there can be nothing sacred in something that has a price. Not surprisingly, therefore, if economic thinking pervades the whole of society, even simple non-economic values like beauty, health, or cleanliness can survive only if they prove to be ‘economic’

    Regards,

    Jonathan

  2. The article makes quite clear that there are many ways to value nature, including non-monetary ways. Monetary valuation of nature is a political and economic necessity, unfortunately, if we want to have the best chance of ensuring that critical natural capital is not lost or permanently degraded – but it is not an absolute valuation technique.

    In the functioning albeit often very imperfect market, in which all nature and all human activities now exist, where there are tremendous economic and financial pressures to develop ecosystems, habitats and species populations, policy-makers insist on some equivalent financial or economic assessment of the market value of ecosystems and their services in order to assess what is under threat and what might be lost to development, pollution, resource waste etc: and, so make decisions on what to save, protect, conserve, sustainably use. Sometimes, policy-makers do use non-monetary values to protect nature and prohibit damaging developments, yes, but not very often. Outside of significant public outcry or voter pressure to conserve, cost-benefit analysis is the basic standard by which most decisions of this type are made. And, of course, it doesn t always work in favour of conservation.

    We may decry this reductionist approach, and wish that policy-makers and society at large could ensure that nature is appreciated and protected solely for its non-monetary values (e.g. of the types spelt out in Box 1), but it is an inescapable reality of contemporary politics and economics that money matters – even where nature unspolit is concerned. And so this reality of decision-making in both the public and private sectoirs has to be dealt with head on.

    Fortunately, valuing nature’s sevices and goods by assigning a price or cost to their loss or productive degradation – even where these services are not replaceable, and therefore in effect potentially invaluable – does demonstrate just how important (ie valuable) such natural assets are in economic and financial terms. We can load the cost-benefit equation with real economic and financial benefits of conservation, and costs from destruction and degradation – and so make protection and conservation much more likely. This type of cost-benefit is also helpful in being able to make polluters pay for their damage that they do to others from their activities by assigning appropriate regulatory or tax penalties not to continue. Moreover, we can also show investors and shareholders, as well as company managers and policy-makers, just how distorting markets can be in the normal valuation of productive human assets, like companies, where those valuations do not take into account the environmental damage done by the company and therefore the risk of regulatory or other policy penalty cutting away at current market values of such a company. This makes it more likely that investor and shareholder pressures will arise to persuade the company to stop what it is doing.

    So, taking a pragmatic approach, we either use this technique in the market world we live in to our advantage – or we accept that the only alternative is to change the whole basis of market oriented political economy! I know which is possible to do in the time available. As far as I am concerned, the only danger that arises from this cost-benefit approach is if we were to assert that it is the only way of valuing nature. Then we would truly be improverished.

    Charles Secrett

  3. Gary Terry

    Charles, recognition of Jonathan’s contribution would have been appreciated as we wouldn’t want anyone to think you were self serving which is how these messes usually occur.
    Thank you Jonathan for pointing me to this article much appreciated.
    Charles you should be sharper then this you can call it “taking a pragmatic approach” all you like its still a position one which you didn’t need to take. I educate my associates on never taking a position because it is not possible for them to know everything and that collaboration is the key to learning what you thought you knew when you actually didn’t.
    Charles says: “we either use this technique in the market world we live in to our advantage”
    This is a simplistic view as the fortune 1000 companies and their embedded supply chains are complex to say the very least and that’s without adding in the multipliers and as soon as you use the term “advantage” you end up no better then the very companies this conversation is based on, its the path of least resistance a better word would of been opportunity because to be honest that’s exactly what it is to those of us that create.
    Charles says: “or we accept that the only alternative is to change the whole basis of market oriented political economy!
    Now you may say “I know which is possible to do in the time available” REALLY! How is that even possible? Why would you even take a position on it again there was no need to, if you were open to collaboration (which you could be) then you would know there are hundreds of options and hundreds of different ways of formulating those options.
    Charles says: “persuade the company to stop what it is doing” this is typical big stick mentality Bernays even, it’s never sustainable as the re actions and/or effects are never calculated because if they were even the most ardent supporter of it would see how negative and detrimental the policy would be long term and lets face it there is always a better way you just have to find it.

    In Closing:
    Charles let me say this, I am sure you are a great guy, and are doing allot of great things in your small little way and I won’t get into the (Triodos Bank Renewable Energy Fund still being based on the fiat currency system, correct me if I am wrong) however these issues that I have addressed in short make it more difficult for guys like me and where I sit. Let’s just say it does not help me. Enough said its Sunday morning and I am about to read my Sunday paper.

    Regards,
    Gary Terry
    Chairman:
    Global Energy Reserve
    support@chuptu.com
    Contact me anytime if you wish to collaborate.

  4. Dear Kaj,

    Thanks for the post, there are some good points made here but, to my mind we really should be approaching this from the other way around – encouraging economists to call themselves environmentalists or ecologists!

    The roots of the word “economy” in Ancient Greek is “household management” – economy is a subset of ecology, strictly speaking a subset of human ecology, not the other way around.

    A quote I will always remember from my Professor of Human Ecology at University was this:

    “Ecological management is merely long term economic planning”.

    Economics is a tool for the pricing, planning and distribution of resources – as such it is important not to mistake the map for the territory!

    We have more to say on the competing notions of reality inherent in economics and in environmentalism in the following post, I hope it is of interest:

    http://www.terrafiniti.com/blog/living-in-a-material-world/

    Best regards,

    Joss

  5. Vasco Schmidt

    there is alot of wise thoughts in this article. Really recommend a book I read last weekend: The economics of good and evil by Tomas Sedlacek, who is known as a ‘philosopher amongst bankers’. Briefly, S. refers alot to philosophy and values needed as solid foundations for economics. He also explains why Adam Smiths works are widely misunderstood. A rather interesting approach in economics. An attempt, to say the least, question the way we think, live, and work. It is really worth the read. Regards, V.

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