A quick statement on the applications of Environmental Studies to Economics.

From Rob Doggett 11/96

Because Economics has so much to do with questions of how we use and allocate resources and deal with inevitable questions of scarcity, any discussion of sustainability of resources will inevitably need to use the language of economics. In the class Bruce and I use some or all of the following topics to engage students in thinking about resource allocation and sustainability:

-Defining the long run and short run in terms of describing factor resource production. This is a key part of the debate over sustainability, for every constituency tends to define sustainability in terms of its present needs and immediate gratification. A joke seldom appreciated by environments goes as follows: "I have just cut down a magnificent redwood tree, and such logging is quite sustainable, not because we have an unlimited number of redwoods, but because the lumber will make up the frame of a house that will last quite a long time. I have therefore been sustained by it." In order to truly appreciate this joke you need to have been present in my fall econ section a few years ago when a small contingent of right-wing extremists (Doug Reed, Jim Allison, Jon Kesey) nearly took over the class. Fortunately, reason prevailed, but only because it got to be grade time... Seriously, though, the issue of what the time frame for economic development and resource allocation should be is one of the most profound facing economists, and it will continue to be so in the future.

-External costs are defined as costs of production not borne directly by either producer or consumer. The most infamous external cost is pollution, and it's the one that continues to trouble us the most. Bill Ruckleshaus referred to it in his lecture when discussing the ways that costs are borne, and of course the complexity of many questions of external cost (like superfund toxic waste sites, to give one example) continues to haunt us. There are also great local examples of externalities applied and come back to haunt us. Ken Behring, former owner of the Seahawks, bought a huge tract of land with the intention of developing it and turning it into a "model community." Not only did he have difficulty working around the stringent King County land use rules, but he also discovered (the most unkindest cut of all) that a number of the trees he'd counted on cutting down in order to maximize the view west couldn't be trimmed except through a lengthy permit process. View property sells for much more than 'regular' property. Voila. Behring had not counted on bearing the cost of cutting the trees, but the Kingco ordinances required him to do so. The development ended up being canceled. Behring has moved back to Southern California. My solution is that the county should build the new Seahawks stadium up on the Sammamish Plateau and kill two birds with one stone, but who ever listens to me?

-The Spotted Owl / Endangered Species Laws as models for discussing government regulation and incentives for changing behavior.

-In Economics we do some very interesting work near the end of the course on the political relationships of international economic systems, i.e., what effects do the absence of strict environmental laws in LDC's to the south and west of us have on the balance of trade deficit, the flow of jobs and goods and services in and out of our own economy? As I mentioned to Bruce, I'd love to be able to twist Bill Ruckleshaus' arm to get him to come out and speak to our senior Economics students about these issues. The only thing in his Bebie Lecture I took exception to (I didn't have my wits about me at the time or I would've raised the point during the Q and A) was his point that if we modeled sound sustainable environmental policies ourselves, then others, esp. in the poorer countries, would come around to our way of thinking. It's a lovely thought, to be sure, but, alas, one of the things history has taught us is that human interest is often so narrowly defined that it often takes a very long time for reason and public spiritedness to prevail. This doesn't mean that we should give up, but merely that the worst exploiters and ravagers of our shared environment will need to have more incentives to prod them into action than merely watching our virtuous behavior from a great distance.

Finally, Bruce and I would love to hear others ideas about how we might bring issues of sustainablity and the environment to the attention of our students. We all know about the tragedy of the commons. Let's try to help the next generation see ways of avoiding such dire straits. Yrs.