Addendum to On Economic Valuation and Sick Mothers

I just found the panel discussion mentioned in my recent post on YouTube. For those interested in arguments pro and contra economic valuation: enjoy.

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On Economic Valuation and Sick Mothers

I have spent most time this week at the Fourth International Conference on Degrowth for Ecological Sustainability and Social Equity, which takes place in Leipzig. In one of the sessions today, my doctoral father had the pleasure(?) to defend the economic (valuation) approach to environmental problems in a panel discussion. Most arguments used in this discussion against the economic approach were, I say it frankly, nonsense. Either they resulted from misunderstanding or from confusion or they just didn’t have anything to do with the issue. The only two valid arguments I was able to filter out were: a) that economists often treat ecosystems atomistically in that they value single ecosystem services and then just “add them up”, which is a practice I am very concerned about, too, and b) that the economic approach hasn’t achieved anything so far (which is debatable, but still a valid critique, as there is no systematic assessment of this issue to be checked against). Today, however, I would like to respond to one of the misconception-based arguments, for I think that it shows in an impressive way what economics is (not) and why we need economic analysis. Continue reading

What’s So Good About Biodiversity?

Sometimes, there are books you wish you wouldn’t have read. Mostly, these are bad books. Recently, I read a quite good book that I nevertheless first wished had escaped my attention. It’s Donald S. Maier’s What’s So Good About Biodiversity: A Call for Better Reasoning About Nature’s Value. It’s shaken up my view of why biodiversity is valuable (although not as much as initially thought). As I had to think a lot about Maier’s provocative and very polemic argumentation, for it has posed a challenge to the core of my PhD thesis, I would like to attempt a “self-therapeutic” review of his book’s first part, in which he attacks the status of biodiversity as carrier of nature’s value (I haven’t yet read his exposition of an own account why nature is valuable). Continue reading

Is Economic Valuation a “Neoliberal Road to Ruin”? A Response to George Monbiot

George Monbiot is actually an environmental journalist I esteem highly. But I do not agree with his aggressive criticism of what he calls a “neoliberal road to ruin”, which I would prefer calling economic valuation of environmental goods and services [the linked article is a transcript of Monbiot’s talk, which you can see below]. While he does make important points, I see his criticism as mistaken in many respects. In what follows, I would like to respond to some of the points he made. Continue reading

The Economic Value of a Statistical Life

A human life is worth $4 million to $9 million. At least according to an authoritative meta-analysis of economic studies that estimate the so-called “value of a statistical life”. This is one of the most controversial issues in modern economics, which has met with vast criticism. Particularly, it has been argued that one cannot attach a price-tag to the life of a human being. In what follows, I would like to argue that a) this criticism is largely based on a misconception of the estimates; b) economists can only blame themselves that the misconception actually arised; and c) the calculation of the value of a statistical life is not sensible, albeit for reasons different from the ethical ones that are commonly used to argue against it. Continue reading

It’s Deliberation, Stupid!

Economic valuation, attaching price tags to nature, is considered wrong by many people. The reasons are divergent, ranging from complete rejection of the idea that the value of nature could be reduced to a price to critique of specific valuation methods, especially those based on questionnaires in which people are asked about their willingness-to-pay for an environmental good in a hypothetical market. Except for the general rejection of the economic approach, which I can understand but do not accept, many of the criticisms can be approached and incorporated. A particularly promising path towards “better” economic valuation is the still seldom applied class of deliberative valuation methods. Continue reading