As Sharon Beder has argued, moreover, the appearance of economic and scientific neutrality that market-based solutions possess may in part further disguise their fundamentally political characteristics:
The portrayal of economic instruments as neutral tools removes them from public scrutiny and gives them into the hands of economists and regulators … A market system gives power to those most able to pay. (Beder 1996, p. 61)
Market advocates respond that individuals with even paltry means exercise significant power through market actions, especially when aggregated into large bodies of consumers. So, too, they argue that most environmental values are universally desired, and “we” lack only the means to efficiently achieve these global goals. Nevertheless, it is reasonable to ask whether current fundamental inequalities in income and capital should be the ground on which to construct environmental governance. Can markets produce not only efficient but also democratic relationships between people and the environment?
Finally, many observers insist that depending on markets to solve environmental problems is a problematic place to start considering the overall, and apparently unstoppable, growth of the global capitalist economy (see Chapter 6). As global trade continues to devour, mobilize, and dump resources, objects, and fuels at an accelerating pace, it becomes difficult to imagine how such energies could ever be harnessed and simultaneously controlled. And yet the language of “markets,” “free trade,” and “ecological economics” must be admitted to be the most dominant, widespread, and uncritically accepted ways of thinking about the environment in the early twenty-first century.
Thinking with Markets
In this chapter we have learned that:
A dominant school of thought holds that, as long as environmental goods and services can be sold or traded, scarcity will be diminished by economic forces through the market response model.
The market response model alleviates scarcity by creating incentives that either increase the supply of environmental goods and services or reduce demand for them.
Environmental externalities can be mediated, in this theory, through private contracts more efficiently than through regulation.
Many market-based mechanisms therefore may exist for solving environmental problems, including green taxes, markets for pollution, and green consumer choices.
Markets, however, can fail, raising questions about holding faith in them for consistently solving environmental problems.
Other problems face market-based environmentalism, including the fact that some environmental goods are difficult to value, that markets can be volatile and fickle, and that economic solutions are not necessarily democratic ones.
Questions for Review
1 Compare/contrast Julian Simon’s and Paul Ehrlich’s views on the general effects of human population growth on environmental conditions (include the term “scarcity” in your answer).
2 Provide an example of the “law” of supply and demand influencing the ways humans use or exploit a particular natural resource.
3 Which of the following environmental problems is better suited to solutions derived from the Coase theorem: a) land-use disputes on adjacent parcels of private property; or b) reducing water pollution across a region (explain)?
4 Review the market mechanisms available for environmental policy. Which require the most far-reaching levels of state enforcement?
5 How does the ecologically complex nature of a river (or any similar “piece” of nature, for that matter) make it difficult, if not impossible, to value in monetary terms?
Exercise 3.1 The Price of Green Consumption
Go to a grocery store or supermarket near you. Select four or five different types of products (for example: fruits, vegetables, packaged goods, meats, paper products, cleaners, etc.). Find a conventional version of this product as well as a “green” alternative. This may include an “organically” grown fruit or vegetable, a “free range” meat, “locally grown” produce, “green” or “eco-friendly” products, or products made from “recycled” or “recovered” materials, for example. What is the price difference (per unit where appropriate) between the “green” and conventional versions of each product?
What is the average percentage increase in cost of the groceries if your “green” products are selected instead of conventional ones? The average American family of four spends $8,500 per year on groceries (the average British family spends approximately $6,300). Assuming your percentage increase is typical and that all conventional groceries have “green” alternatives, how much more would the average family have to pay for only “green” groceries? Who can afford to pay such extra costs for groceries?
What is the benefit from this extra cost? Why are “green” alternatives more expensive to produce? Where does the extra money spent on each product go? How would you know? Where would you go to find out?
Exercise 3.2 Marketing Green Technology
In this exercise, you will identify a “green” innovation or new technology and consider ways to market it. First, name and describe an environmentally desirable technology or process that might be used on campus or by your friends or classmates. These might include devices like reduced-flow showerheads or efficient light bulbs, or it might entail a product that changes how people do things, like freely available shared bicycles. Next, consider how much this alternative might cost relative to current technologies or available alternatives. Is it a great deal more expensive or inconvenient? Why is this? Finally, develop a convincing marketing strategy for this product, which might include short text, photos, slogans, catchphrases, or even a jingle. This will necessarily include some information to prove that your innovation is actually an environmental improvement over the status quo. What would actually make such an alternative compelling, especially if it is more expensive?
Exercise 3.3 Thinking Economically
Imagine a scenic canyon, visited by many local people as well as tourists from beyond the local area. Consider a scenario in which a mining company has proposed to the local authority that it be closed to the public and put into the production of coal. Thinking in terms of economics as a way of adjudicating the relative value of one use of the canyon over the other, what would you need to know in order to make a comparison or assessment? What kinds of quantitative data would inform your decision, and where might they come from? What kinds of things might you need to know that are hard to measure? Once you have listed the kinds of information and data that might be available to inform this decision, do you think it would be sufficient to making this decision, why or why not?
References
1 Beder, S. (1996). Charging the earth: the promotion of price-based measures for pollution control. Ecological Economics 16 (1): 51–63.
2 Coase, R.H. (1960). The problem of social cost. Journal of Law and Economics 3 (October): 1–44.
3 Ehrlich, P.R. (1968). The Population Bomb. New York: Ballantine Books.
4 Field, B.C. (2005). Natural Resource Economics: An Introduction. Long Grove, IL: Waveland Press.
5 Harvey, D. (1996). Justice, Nature, and the Geography of Difference. Cambridge, MA: Blackwell.
6 Rees, J. (1990). Natural Resources: Allocation, Economics, and Policy. New York: Routledge.
7 Robertson, M.M. (2006). The nature that capital can see: science, state, and market in the commodification of ecosystem services. Environment and Planning D: Society and Space 24 (3): 367–387.
8 Sabin,