Wednesday, May 20, 2015

Economics and the environment

As students begin to study the discipline of natural resource economics, there is often confusion about what the subject is about. This is especially the case when students are coming from backgrounds with only limited exposure to economics (e.g. Environmental Studies, where most student have had only one or two econ classes before this one).

Generally speaking, economists try to solve problems using a combination of theory, empirical analysis (data, statistics, math), and intuition.  For example, macro economists try to address issues such as how to keep an economy growing without significant inflation.  Micro economists might try to find the best way to maximize profit for a particular firm or industry. Natural resource economists try to solve problems associated with scarce natural resources.

Some examples from my work include:  How to maximize fishery value while balancing the competing needs of commercial and recreational fishers and maintaining a biologically sustainable stock?  How can Caribbean tourism grow without harming coral reef quality or marine turtle populations?  How can tourism serve to enhance the livelihoods of local populations?  How can governments in coastal areas respond to changes in the quality of natural resources?  What hunting regulations would maximize the net gains to society from white tailed deer populations?  Are tourists willing to pay fees to help finance conservation efforts?  What are people willing to pay to view marine turtles in the wild? Will people pay for marine turtle conservation, even if they never see a turtle in the wild?  How can these willingness to pay values be captured and used for conservation? 

Obviously, these are complex issues that require interdisciplinary effort. One of the things that I really love about what I do is that I work side-by-side with biologists, policy makers and resource users to address these problems. 

Something that should also be obvious is that these are potentially contentious issues. It is easy to get caught up in the emotion that surrounds any debate about environmental issues. Please remember that an economists job is to provide objective analysis (i.e. without personal opinion or bias).  

Below are links to two excellent essays that provide a nice perspective on the economic view of the environment.  The second essay covers non-market valuation, which we will cover in
detail later in the summer. It makes a good read now however, as it sets the stage for much of what we're covering at the beginning of the class (e.g. the economic view of value).

How do Economists Really Think About the Environment (Fullerton and Stavins, RFF, 1998)
Economic Values without Prices (Loomis, Choices, 2005)

What are your thoughts on economics and the environment?  At the beginning of the course, do you see a role for economics in the environmental policy debate? 


Jawad Dughmush said...

Economists help environmentalists understand the problem and help them find a solution. I feel as though economists provide the analyses and environmentalists provide the solutions.

Dr. Peter Schuhmann said...

Thanks for the reply Jawad! I think scientists and analysts from both fields find, provide and refine solutions. One of the things that I think is important to understand about environmental problems is that they are inherently multidisciplinary. It takes input from natural science, physical science, policy makers, governance specialists, statisticians and economists to work toward solutions. Everyone has a role to play. Too often we get stuck in our own discipline and fail to recognize other perspectives.

Ryan Lynch said...

I think that there is a connection between economics and almost ever discipline, especially those that require policy debate. Most of all politics has to do with money and the distribution of money, and the amount of fields in which this applies is virtually unlimited.