Besides the ecological footprint you might also have heard of the carbon footprint and the water footprint. Only carbon footprint makes sense; I criticized ecological footprint in an earlier post, but I did not mention another problem that also holds for water footprint.
Why do I think carbon footprint makes sense? It’s about one environmental problem: climate change. It’s about one type of pollutant, greenhouse gases such as carbon dioxide and methane, and it doesn’t matter where you emit them. Whether you burn coal in Las Vegas, Shanghai, or Maasbree: the radiative forcing of the greenhouse gases you emit is similar.
How different that is with water. Growing fairly thirsty crops in Las Vegas is a much bigger problem than growing very thirsty crops in Maasbree, simply because there is much more water in the Dutch province of Limburg than in the American state of Nevada. In Nevada you would have to extract groundwater to irrigate your crops, and you would have to extract a lot of it because a big part of what you spray on your crops will evaporate before your crops can drink it. The groundwater aquifers you extract your water from will take a very long time to be replenished. In Limburg, on the other hand, you can use water from the Meuse (which is what Maasbree is named after), and even if you extract groundwater there is plenty of rain and river water to replenish it. Nevertheless, the water footprint will simply look at water use or the thirstiness of your crops, so growing very thirsty crops in areas where there is plenty of water is worse than growing somewhat less thirsty crops in areas where water is very scarce. Water depletion is a local problem: you can’t compare Dutch water to Nevadan water. This problem does not hold for greenhouse gas because a Dutch ton of CO2 has the same effect as a Nevadan ton of CO2.
Ecological footprint has the same problem. Here the unit is not tons of carbon or liters of water, but hectares of land. With land it is important to consider the opportunity cost: if, say, you would use it to store carbon, what uses of the land would you have to forgo? In other words: if you would not use it to store carbon, what else would you have done with it? And then it turns out that it actually matters a lot whether we are talking about highly productive land in a well-drained and fertile Dutch polder or some remote wasteland with no biodiversity to speak of. Ecological footprint aggregates all land used by a person, a city, or a product, including the hypothetical hectares one would need to store carbon. Whether it is office space in the centre of Hong Kong, a highly diverse rainforest in Brazil, the fertile polder of Het Groene Hart or the barren desert of the Sahara: land is land, according to the ecological footprint. But it isn’t, just like water is not water.
One of the greatest things about Wageningen is that you meet people from over the world. It’s a fairly small university, but it is very internationally oriented, so there is no escaping our international students and staff.
Feel free to join somebody else’s tune or song, but don’t overdo it, especially if you don’t know the song or tune.
Curious? We have a website where you can find all the details.
This is a text that I prepared last year for my lecture on stochastic dynamic programming in a course on the economics of natural resources. Dynamic Programming is one of the more elegant ways of presenting the problem of natural resource depletion: how much should we harvest now, and how much should we save for later? The problem is that most introductory texts in natural resource economics say little about DP, whereas the specialized texts on DP are too difficult technical.
I co-teach a course on marine resource management where I explain the basic principles of natural resource economics to MSc students with almost no economic background. I have not yet found a text that explains natural resource economics in an accessible manner to this audience. So far this document only features the basics of supply, demand, consumer surplus, and producer surplus, but I intend to extend it in the near future.
Feel free to download, use, comment, etc.
I am happy to say that James Delingpole and George Monbiot make my toes cringe in equal measure (don’t you think they even look alike?). Whether it’s about the leftist conspiracy to strangle the economy with cap-and-trade or the neoliberal commodification of our athmosphere by cap-and-trade, I always find it difficult to reach the end of their writings with the same blood pressure as when I started reading them.
This time it’s Monbiot who writes yet another econophobic rant against Payments for Ecosystem Services: pricing nature is wrong, PES is just a slippery slope towards privatisation of nature, without markets we wouldn’t be in this situation in the first place, blah blah blah.
It’s not the establishment of property rights, but their absence that is driving overexploitation of natural resources. Monbiot’s rejection of private property rights takes us back to the days when nature was a free-for-all, with all the depletion and extinctions that come with it.
Worstall’s second point is very valid, and I’m glad somebody is making it (although I doubt it convinces George “markets are evil and governments are saints” Monbiot). His first point, however, raises two question marks, making me feel somewhat like the proverbial two-handed economist.
On my left hand, I admit (albeit grudgingly) that Monbiot has a point: there are more reasons to preserve nature than just its contribution to the economy. It’s the classical dichotomy between utilitarian and deontological ethics: Worstall uses utilitarian arguments (show how important nature is and people will more likely preserve it), whereas Monbiot argues that it is simply morally right to preserve nature, because it has a value in itself regardless of how highly humans value it.
On my right hand (call it my Delingpole hand if you like), arguments like Worstall’s first point make me suspicious. Too much research in this matter is being done to “raise awareness”, “wake up the politicians”, or something like that. It makes for terrible, politically biased science that accepts any wild guess as long as it gives a big number. People still seem to believe the global ecosystem is worth $33 trillion, although any serious economist can tell you that this number as well as the method used to arrive at it (and, indeed, the sheer idea of calculating a total value of the entire ecosystem) is nonsensical: economist Michael Toman called it “a serious underestimate of infinity.” Moreover, when you price nature you should be aware that it may turn out not to be that valuable: perhaps it is still sensible to cut that forest and build a hospital instead. This is of course the outcome that folks like Monbiot dread; on the other hand, the folks who use the “raise awareness” argument gloss over it, or worse.
The bottom line is that economic valuation of ecosystem services is best done in the context of a concrete, well-defined policy question. Pricing nature improves that decision-making by making values visible that would otherwise be ignored, in a way that makes them comparable to goods and services that do have a market price. Prices can never tell the entire story (this is where I agree with Monbiot), but it is a laudable goal to make the cost-benefit analysis as complete as possible (which is where I agree with Worstall). But whatever you do, “raising awareness” is just about the worst reason to do it.