No. It may be a positive process from the point of view of accountants, or profit maximizers. But it’s not positive from the economic point of view. Economists have known for decades that externalities cause social costs to deviate from private costs. And they’ve known how to solve this - the most obvious way being to tax negative externalities, so that the private cost of doing them equates the social cost. Greg Mankiw - as mainstream an economist as you’ll find - has set up the Pigou Club, to advocate just this. The only question - which I suspect is the real point of dispute between Tim and Mr Juniper - is the technical and ethical one of what precisely the tax should be.
The impacts of releasing carbon dioxide through clear-felling an ancient rainforest are externalities not reflected in the price of beef, soya or timber. Because the externalities are excluded from how we calculate the overall impact of deforestation, it seems from an economic point of view to often be a positive process.
This is a howler. If there weren’t an oil spill, the money spent on detergents would be spent on something else. So oil spills aren’t a positive at all. Conventional economics has a term for this - it’s Bastiat’s broken window fallacy.
Even oil spills count positively in conventional economic calculations - for example, because of the money spent on buying detergents and hiring ships and people for clean-up.
He’s right - resource depletion doesn’t feature in conventional GDP measures. But no serious economist thinks maximizing GDP is a worthwhile goal. If we did, we’d work 24 hours a day.
The fact that natural capital is being liquidated to achieve "progress", or that some of the "growth" we are enjoying now will lead to very severe costs later on, is nowhere to be seen in the calculations of economic progress published by governments and international agencies.
Not in the national accounts, they don’t. But national accounts aren’t the only - or even main - object of economists’ inquiry. What also matters are individual transactions. And here, Mr Juniper could have an ally in mainstream economics. His claim that the value of ecosystem services to mankind is being overlooked is a conventional claim about the tragedy of the commons. Because the ecosystem is, in effect, commonly owned, everyone has an incentive to predate upon it and degrade it. And again, conventional economics has a solution - to give someone formal ownership of ecosystems, as has happened with some success in African wildlife. Deforesters and polluters would then have to pay to deplete ecosystems. So they’d only do so if the benefits to mankind exceeded the costs.
If anyone is missing the main point about the environment it has to be conventional economists. Nowhere in our national accounts do they count the fabric of our planet for anything.
Again, the question is not: environment versus economics? It’s the technical ones of how to create effective property rights, and how to price access to them.
Now, unlike many of Mr Juniper’s critics, I say all this in sorrow, not anger. Conventional economics - which is distinct from plundering capitalism - can be the ally of environmentalists, not its opponent.