Land, economic change, and agricultural economics

Agricultural and Resource Economics Review, Apr 2003 by Castle, Emery N

Discussion of this question not only would have directed attention to the appropriateness of benefit-cost procedures here, but also to laws and administrative procedures pertaining to such matters. A relatively new methodology was available, contingent valuation, which held promise for assigning monetary measures to passive use values. The ensuing debate had little to do with the social problem that needed to be addressed, the prevention of future spills. Economics is relevant to the solution of such a problem, but it is not primarily a problem of economic optimality. It requires a value judgment that oil spills are undesirable, and then investigation of the best way of preventing them.6

If resource and environmental economists embark on the kinds of policy research relevant to the difficult issues identified here, rather than the endless search for economic optimality, they will encounter a different set of problems. They will find it necessary to work closely with representatives of other disciplines. In this connection, I call special attention to environmental ecology and environmental biology.

There is growing tension between resource and environmental economists on the one hand and environmental biology and ecology on the other. This is not the kind of problem that will be settled in the usual forums of bringing disciplines together. Every thoughtful biologist, ecologist, and economist interested in the natural environment should, I believe, direct attention to this problem. I do not believe it is in the long-run interest of these disciplines to permit this situation to continue to deteriorate. These disciplines are important contributors to the scientific base of resource environmental policy. Yet many do not agree even on the extent, much less the nature, of environmental problems that exist. This situation would be of less concern if those involved were attempting to resolve their differences by methods of dispute resolution traditional in the scientific community.

The extreme (disgraceful?) reaction of some biological scientists to The Skeptical Environmentalist (Lomborg, 1998) in Nature appears to be more a manifestation of hostility than a difference of opinion within the scientific community (see Nature, November 8, 2001 and May 2,2001).7 Some biologists and ecologists apparently have similar impressions of economists. They are appalled at the notion that economic analysis would be considered an appropriate base for certain environmental decisions. To their mind, economic activity is the cause of the problem, and they want to go "outside the box" for a solution. They are suspicious of solutions which depend on criteria that come from "inside the box," and appear to believe economists are wedded to the market paradigm with a tenacity that cannot be explained in science alone. They may be as perplexed as we are in regard to an appropriate base for dialogue.

Not all biological scientists react in the way some have to The Skeptical Environmentalist. And the recent writings of Nordhaus and Lind demonstrate all economists are not wedded to rigid benefit-cost analysis. There may exist a basis for dialogue among representatives of both disciplines who recognize the need to identify limits to the applicability of every conceptual approach, even our own.8