Kim: there is most certainly a divergence in societal policy between the Laws of Nature (as represented in Earth System Science) and Economic Laws. The "free market" is lauded as being the most efficient (and therefore the best) mechanism to promote social progress. But is efficiency necessarily a good thing? In nature, certain geologic phenomena are extremely efficient in moving large amounts of mass and energy: hurricanes, floods, landslides. When humanity gets in the way we call these catastrophes. Human interventions in natural processes can also lead to greater efficiencies: urbanization and emplacement of storm drains, decrease in wetland area to accomodate accelerated growth, which ultimate conspire to result in efficient transfer of water to channels beyond their capacity, which we then recognize as floods. The same catastrophic results might be recognized in the tendency of financial institutions to amass huge resources in some specific sectors of the economy without some sort of buffering or regulatory mechanisms.
In "Free Market Environmentalism" (Anderson and Leal, 1991, Palgrave:New York, ISBN 0-312-23502-X), the case is made that the free market and personal property rights provide the best way to ensure protection of environmental quality: personal stewardship of the land is always preferred to governmental oversight prescribed through legislation or administration. The problem with the free market is that the laws of supply and demand don't apply well to a) limited resources that are essential to life, and b)time spans that are longer than human memory. Supply and demand says that we will never run out of a resource. Once it gets too costly some other commodity will arise to replace it. That works fine for widgets but not for potable water--we simply can't make more (to increase supply and decrease cost) or find a substitute. Nor can pressures put on a natural ecosystem respond fast enough to respond to immediate human needs. In the Northern Rocky Mountains we are currently experiencing an infestation of pine bark beetles due to a decade of drought, high summer temperatures, and lack of "deep freeze" intervals in the winter that can kill the beetles. The result is that hundreds of years of forest growth will be lost in a conflaguration of wildfires that will obviously have detrimental impacts on communities throughout the Rockies. The recovery of this landscape will be far too slow to accomodate society's need for forest products, to protect watersheds, and the desire to live in aesthetically pleasing locales. The time scale in which the economy moves (measured in seconds in this global digital age) is orders of magnitude removed from the rates in which natural processes work.
The other problem with Free Market Environmentalism has to do with the precept that personal property rights trump all others. What is missing in this argument is personal responsibility in managing personal property. Anthropogenic causes can often lead to natural effects, e.g. a leaky septic system on one property will cause effluent to flow down gradient and into another piece of property; disturbing the dynamic equilibrium on a shoreline by building groins or jetties will cause erosion on one property and deposition on another. Natural processes do not respect artifical property boundaries (nor geographic boundaries between cities, counties, states, or countries). Without system-wide management, i.e. through regulatory actions to ensure that there is equal protection under the law for all, individuals would otherwise be free to do whatever they please on their land to the possible detriment of all.
Further, the profit motive of corporations is contributory. Yes, there is a fiduciary responsibility to work towards profits for the investors. But, it all depends on how you do the accounting. It is indeed cheaper on one scale for a factory to dump wastes into the river and not pay for appropriate disposal. That's one way to maximize profits for investors. But what is the cost to the larger community in terms of public health, worker safety, ultimate costs incurred by the government to mitigate hazards to the community, loss of recreational opportunities to the community, and other intangible costs such as loss of habitat, diversity of species, etc.?
An Earth System perspective would help economists understand concepts related to closed system (finite resources), natural processes that proceed on time scales beyond human memory that ultimately effect society, processes that are indifferent to who "owns" a piece of property as defined by artificial boundaries, and the long-term, ultimate costs of economic decisions that impact the larger population and planet.
In "Free Market Environmentalism" (Anderson and Leal, 1991, Palgrave:New York, ISBN 0-312-23502-X), the case is made that the free market and personal property rights provide the best way to ensure protection of environmental quality: personal stewardship of the land is always preferred to governmental oversight prescribed through legislation or administration. The problem with the free market is that the laws of supply and demand don't apply well to a) limited resources that are essential to life, and b)time spans that are longer than human memory. Supply and demand says that we will never run out of a resource. Once it gets too costly some other commodity will arise to replace it. That works fine for widgets but not for potable water--we simply can't make more (to increase supply and decrease cost) or find a substitute. Nor can pressures put on a natural ecosystem respond fast enough to respond to immediate human needs. In the Northern Rocky Mountains we are currently experiencing an infestation of pine bark beetles due to a decade of drought, high summer temperatures, and lack of "deep freeze" intervals in the winter that can kill the beetles. The result is that hundreds of years of forest growth will be lost in a conflaguration of wildfires that will obviously have detrimental impacts on communities throughout the Rockies. The recovery of this landscape will be far too slow to accomodate society's need for forest products, to protect watersheds, and the desire to live in aesthetically pleasing locales. The time scale in which the economy moves (measured in seconds in this global digital age) is orders of magnitude removed from the rates in which natural processes work.
The other problem with Free Market Environmentalism has to do with the precept that personal property rights trump all others. What is missing in this argument is personal responsibility in managing personal property. Anthropogenic causes can often lead to natural effects, e.g. a leaky septic system on one property will cause effluent to flow down gradient and into another piece of property; disturbing the dynamic equilibrium on a shoreline by building groins or jetties will cause erosion on one property and deposition on another. Natural processes do not respect artifical property boundaries (nor geographic boundaries between cities, counties, states, or countries). Without system-wide management, i.e. through regulatory actions to ensure that there is equal protection under the law for all, individuals would otherwise be free to do whatever they please on their land to the possible detriment of all.
Further, the profit motive of corporations is contributory. Yes, there is a fiduciary responsibility to work towards profits for the investors. But, it all depends on how you do the accounting. It is indeed cheaper on one scale for a factory to dump wastes into the river and not pay for appropriate disposal. That's one way to maximize profits for investors. But what is the cost to the larger community in terms of public health, worker safety, ultimate costs incurred by the government to mitigate hazards to the community, loss of recreational opportunities to the community, and other intangible costs such as loss of habitat, diversity of species, etc.?
An Earth System perspective would help economists understand concepts related to closed system (finite resources), natural processes that proceed on time scales beyond human memory that ultimately effect society, processes that are indifferent to who "owns" a piece of property as defined by artificial boundaries, and the long-term, ultimate costs of economic decisions that impact the larger population and planet.
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