Environmental Economics

I consider myself an "anthropocentric environmentalist," which is a fancy way of saying that I care about environmental issues because I care about human flourishing. This doesn't come at the expense of economic reasoning, though, and economics leads us to surprising and often counterintuitive conclusions. Economics shows how appearances can be deceiving, and I find a lot of environmental initiatives are like rotten Granny Smith apples: They're green on the outside, but they're brown on the inside. Here's how and why. Private property is essential to a well-functioning social system because it allows that system to generate prices. Prices provide the crucial information people need to make rational decisions, but prices do not mediate all environmental conflicts because some things are not owned. When resources are not owned and therefore outside the price system, the information we would need to evaluate the costs and benefits of different environmental initiatives literally does not exist. I stress that it is not just that environmental issues are difficult or complex. The problem is that--given the absence of prices, profits and losses--we do not have the information we need to articulate what responsible environmental stewardship would mean, much less exercise it. Endless debates about land use illustrate this principle. Development is opposed by people saying that we owe it to our children to conserve our precious natural resources, but University of Rochester economist Steven Landsburg asks the right question. Who are we to say that our children will prefer an old-growth forest to the income produced by a parking lot or high rise?...Forbes