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U.S. EPA.Headquarters Library
Mail code 3201 .
1200 Pennsylvania Avenue NW
.Washington DC 20460 .
Colloquium on Economics, Ecology,
and Sustainability Policies
Janiian 10, 1995
Washington, D.C.
Hosted by the Environmental Law Institute
for the U.S; Environmental Protection Agency's
Office of Policy. Planning, and Evaluation
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AGENDA
' . Colloquia on Sustainable Development in the United States
, COLLOQUIUM I:. Economics, Ecology, and Sustainability Policies
January 10, 1995 \
. Washington, DC ., .- . ,
MODERATOR: A. Myrick Freeman
, •' Professor, Department of Economics
Bowdoin College . .
8:30-8:45 Welcome and Introduction '
David Gardiner . .
Assistant Administrator . .
Office of Policy, Planning, and.Evaluation
.U.S. Environmental Protection Agency -•-,,'',-.
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Introduction to the conference and it!-s principal goal — the search for common'
ground between the disciplines of economics-and ecology on concepts of
sustainability and how different ideas from these fields might be integrated to-
. guide U.S. environmental policy toward sustainability. .
. 8:45-9:30 Survey Paper: Ecological and Economic Perspectives on Sustainability.
• . ' ^ * '
. . . , Bryan Norton , Michael Toman
, •' . Professor ,1 ' Senior Fellow
Georgia Institute of Technology Resources For the Future
School of Public Policy
The goal of the survey paper is to lay out,a framework for discussing
, , sustainable development, drawing from both economic and ecologic
disciplines. The talk will challenge participants to look for interdisciplinary
' / . consensus on basic concepts, with'particular emphasis on those concepts that
• will focus U.S. policy in a more sustainable direction. .
9:30>10:00 Discussion
10:00-10:15 Break ^
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10:15-iO:45 Key Concepts Of Sustairiability ,./',' ^
C.S. Rolling !
' • ' ! . Professor
University of Florida v
Department of Zoology
This presentation will address key physical parameters of sustainability:
thresholds, substitutability, and system discontinuities. Each of these concepts
is important from both an ecological and economic perspective, although there
are differences hi how these concepts are defined and applied within each
_ • disciplined The presentation will focus on outlining these theoretical
differences and the corresponding implications for empirical specification of
sustainable development parameters. ' , • ••
10:45-11:45 Focused Responses, _
• Richard Bishop
. Professor, Department of Agricultural.Economics
University of Wisconsin .
•. Stuart Pimm
Professor, Department of Zoology , . ' .
University of Tennessee ,
••• Thomas Tietenberg . - •-," .:. •
, Professor, Department of Economics -
Colby College - . ^
11:45-12:30 Discussion
12:30-1:30 Lunch
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1:30-2:00 Measurement of Sustainability: How Economists Can Help
/ ,
; Robert Repetto
Vice President and Senior Economist
World Resources Institute
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This presentation will focus on techniques for establishing quantitative
measures of sustainability. The potential of various monetary and non-
monetary indicators as operational measures of sustainability will be explored.
•. ' " The presentation will address how these methods may be used to empirically.
determine the degree of sustainability of an activity or outcome. •
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2:00-3:00 Focused Responses
Robert Costanza , •••..•">'-
Director, Maryland International Institute for Ecological Economics
Center for Environmental and Estuarine Studies
University of Maryland . „._•'',
Robert Ayres ( • .
Professor of Management and.the Environment .
Institute for Business Administration -
f
Raymond Prince ' - :: ,
Economist , . '
Office of Environmental Analysis and Sustainable Development
Department of Energy • . - '
3:00-3:30 Discussion
3:30-3:45 Break
DISCUSSION FACILITATOR: Robert Coppock
Director, The 2050 Project
s World Resources Institute
3:45-4:30 Discussion on Areas of Commonality or Consensus
4:30-5:30 Guidance for Implementation Roundtable Participants
. " . ; Sirice the ultimate goal of this workshop is to provide direction to .policy
makers on sustainability policy, participants will seek to establish consensus on
.desired policy endpoints or intermediate points. The goal of this guidance is
to provide policy implementation experts with direction on developing specific
.recommendations for EPA, and other federal agencies, on how to incorporate
concepts of sustainability into new and existing programs and policies.
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SUSTAINABILITY:
Ecological and Economic Perspectives*
Bryan G. Norton
School of Public Policy
Georgia Institute of Technology
A-Janta, GA
Michael A. Toman
Resources for the Future
1616PSLNW
Washington, D.C .
Decembers, 1994
*A background paper for the Colloquium on Sustainability in the United States, January 10,1994.
Research underlying this paper was partially supported by a grant to Resources for the Future from
ths Office of Exploratory Research, United States Environmental Protection Agency. <
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TABLE OF CONTENTS
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1 Introduction: Eeolpgists, Economists, and the Search for Sustainable Policies... 2
II. Reversibility and Substitutability , .4
III. Values and Accounting ......; ....;....; ; ; 14
1. What Is the Nature of Possible Obligations to the Future? 15 ,' •
.2. Intergenmtional Equity: A Decomposition of the Problem ,18
A. The Identity Problem ; 20
B. The Distance Problem.......:...^ „... 21
. C. The Significance of Effects Problem.'...:..............! 22
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IV. A Two-Tier Decision Process/Model.....> .". 24
V. Conclusion..^ '. :....29
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Appendix A: Economic Theories of Resource Use, Economic Growth,
.and Intergenerational Equity....... ;. 31 x
Appendix B; The Endogeneity of Preferences... .....:....... .......39
References ;.... .;.....; ;...... 46
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I. Introduction: Ecoldgists, Economists, and the Search for Sustainable Policies
, Government decision makers are more and more often being told to "act sustainably" and, .
to pursue policy.paths toward "sustainable development". These admonitions and instructions
appear to express a significant societal commitment to alter current practices. And yet these widely
supported admonitions provide little guidance to policy makers and other actors, because the term,
"sustainable" embodies deep conceptual ambiguities.1 ! These ambiguities cannot be easily resolved
because they rest, in turn; on serious theoretical disagreements that transcend disciplinary
boundaries. In particular, economists and ecologists employ different conceptualizations for .
"••'•'. - " , • '
explaining the interactions of humans with their environment. Nor are these differences easily
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ignored because they pervasively affect the way we conceive and implement sustainable policies.
They also affect which data are gathered and considered relevant to policy decisions, and.
they dictate quite different approaches toward aggregation of data and the integration of information
in the search for improved environmental policies. If we resolve to base environmental and
economic policy on the best scientific evidence ayailable-and we think most scientists and policy
makers would agree, also, with this resolution—then it is essential that scientists cooperate across
disciplines to encourage improved communication among disciplines and also improved
communication of information from the various disciplines to decision makers. Data are just data;
only "interpreted data" will affect the decision process. Who, then, will interpret the data and
apply it in a decision process? Are the conceptualizations of one discipline more appropriate for
integration of data? Or is mis largely a post-scientific question, to be left to the environmental
managers arid decision makers? The purpose of this conference is to address the underlying
theoretical difficulties that currently obstruct interdisciplinary communication and cooperation, and
1 By sponsoring this colloquium the SAB is responding to a request from the Office of
Policy, Planning and Evaluation staff members as expressed by Al McGartland. These staff •
members stated that confusions in the use and meaning of the concept of sustainability have led to
considerable conflict and inefficiency in daily operations^ They said that they get almost daily
guidance and suggestions that they put this or that policy on a "sustainable" basis, but that the
exact meaning of this term is ambiguous, and that there are no generally acceptable criteria to apply
to Agency actions and policies that will ensure that these actions are sustainable. The
Environmental Economics Advisory Committee, with the cooperation and helpful suggestions of
the Ecological Processes and Effects Committee, has encouraged this colloquium, as have staff
members at the Environmental Protection Agency. Arrangements were facilitated by the
Environmental Law Institute. The EPA Science Advisory Board is charged to advise the
Administrator regarding scientific issues bearing on environmental policy; it is unusual for SAB
Committees to venture this directly into the policy arena. In this case the incursion is unavoidable,
however, because the science involved .has to do with the determination of social values and their
impact on policies. ' _
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result in ambiguous admonitions to act sustainably. ,
While we recognize the hazards of attributing a consensus to any academic discipline, we
think bur task of opening this colloquium demands that we characterize as fairly .and clearly as
possible the differing opinions that separate mainstream economists from advocates of a new
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paradigm of ecological economics.2 Because economics is a social science devoted to -
understanding the value commitments of the public and their behavioral consequences, it is
essential that scientific questions regarding human economic and.valuational behavior be • . '
formulated in a way that is, on the one hand, descriptive of values held and, on the other hand,
expres'sed in concepts that can inform real decisions. 'It is apparent that the choice of, •'
methodologies and techniques for describing and recording social values—what we will refer to as .
the development of an accounting system.fof sustainability3~depends upon theoretical principles
that are controversial in many interdisciplinary discussions ofenvironmental policy.
In this.colloquium we are paying special attention to two clusters of issued and intellectual
problems that intersect at the edges of economic and ecological science as these disciplines bear
upon environmental policy practice. For shorthand, we will refer to these as the problems of
"reversibility and substitutability" and "the accounting problem." This colloquium is premised . •
squarely on the belief that these two problems, about which there is considerable cross-disciplinary
disagreement even regarding their formulation as issues for debate, have important consequences
for the way we model and act upon the problem of sustainability. We explore these two broad
problem areas to highlight the central disagreements regarding the concept of sustainability,' even as
we caution that these two areas of cross-disciplinary disagreement cannot be resolved without
making considerable progress in other areas of ecological and economic theory.
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1. Reversibility and Substitutability. We must examine a cluster of problems that
have to do with understanding concepts of reversibility and the degree of Substitutability that exists
among resources, among ecological systems, and among components of those systems. A central'
aspect of this disagreement centers on the different attitudes of econbmists and ecologists toward
discontinuities and thresholds in understanding and managing the impacts of human culture on
' 2 h should, of course, be recognized that there may be quite, articulate minorities within
disciplines, minorities which articulate alternative conceptions. So our comments should be
understood as directed at dominant conceptualizations within disciplines, and not to imply perfect
unanimity. .'•/.. , . ' . •
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3This use'of the term "accounting" should be.distinguished from the emphasis in many
sustainability discussions on the much narrower question of revising national income accounts to
. incorporate environmental values. ' ._..,.
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t ecological systems. • Economists favor marginal forms of analysis and tend to pay.less attention to
the concept of the scale of an economy in relation to its resource base. Ecologists believe that there
are important thresholds of .scale, and that human activities can, by stressing ecosystems in ill-
advised ways, set in motion large-scale and irreversible losses in the functioning ecological and,
physical systems. . - ' •
2. The Accounting Problem. Another disciplinary flash point is the the general
structure and detailed design of an accounting procedure to keep track of whether we are acting
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sustainably. In particular, ecohomists'and ecologists often differ regarding how to measure and
place value on changes in environmental quality. A number of leading economists have argued
explicitly and strongly that sustainability accounts should be kept in economic, dollar terms
(RepettOj 1992), while many ecologists and other physical scientists would argue that we must
keep accounts of changes in the physical attributes of ecological systems as well as monetary
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accounts (Costanza, 1991; United Nations, 1993); There is also considerable disagreement, even
among economists, regarding ihtertemporal discounting as a method of indicating time preference,.
especially with respect to allocations across generations (Page, 1977; 1988; 1994). Ecologists
have often opposed discounting, especially as applied to decisions that may have long-term, highly
negative outcomes that threaten the productivity of ecosystems. Their concern is stated in terms of
important social values that will be safeguarded if the present generation acts to protect essential
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ecosystem processes. : " . '
Clarifying these issues is far more difficult than simply providing dictionary definitions
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because the semantic problems are in this case inseparable from theoretical issues dividing many
economists from many ecologists. The task of this colloquium is to facilitate dialogue between
ecologists and economists with the hope and expectation that an ongoing multi-disciplinary
dialogue will improve our understanding of environmental policy options and choices. In the
. following sections we will explain some of the theoretical and practical ramifications of the two
crucial problems we have decided to focus on today. We hope to convince all participants that
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there are several difficult theoretical and intellectual issues which arise in the formulation of a
sustainability theory and to encourage a frank and honest discussion of these theoretical issues, as
well as practical suggestions.
II. REVERSIBILITY AND SUBSTITUTABILITY4
In mis section we discuss contrasts between the-views of ecologists and economists on
4The discussion in this section draws to a considerable degree on Toman, Pezzey, and
Krautkraemer;(1994p '-...;•' •',-',*.'
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the issues of resource substitutability and the reversibility of the consequences of ecological
change. It should be noted at the outset that economists and ecologists often assign different '
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meanings to-these words in their analytical efforts and policy arguments. For economists,
substitutability refers to the capacity to alter a "production process".in the event of increasing •
"scarcity" of some "input" in order to maintain a desired flow of "services".: A production '.
process in this conception can refer to a human-engineered activity or the act of benefiting from
-values provided more'directly by nature. Services refers to anything valued by people, again -
both human-engineered or provided more directly by nature. 'Similarly, input refers both to
human activity, and the beneficence of nature. Scarcity here is understood in the economists'
sense of increasing relative cost, the amount of other valued goods and services that must be
given up for the input in question. Given these definitions, reversibility refers also'to economic
consequences broadly defined to include both.market and nonmarket values, rather than to the
physical states of ecosystems perse. '., . ; •
In most usage by ecologists, the terms substitutability and reversibility refer much more
to physical properties of ecosystems themselves. The reversibility of a condition is related to
the resiliency of the ecosystem, its capacity to return to a high level of function (though not
necessarily to the same state^ given the prospect for discontinuous responses such as threshold .
effects). Substitutability is a form of redundancy :'if some system attribute is diminished, are
there other sources of that attribute? The question of substitutability assumes particular
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prominence when the postulated natural degradation is somehow large in scale, an idea we
attempt to make more-precise below.- . •' . • : . :
Economists are concerned with siistainability in the sense of maintaining acceptable
levels of human well-being over time and thus are concerned with the capacity of the natural !
environment and other social assets to meet human wants and needs. These wants and needs
can be conceived of very broadly, encompassing a variety of preservation and bequest motives
in addition to direct interests in ecosystem use or resource consumption. Nevertheless, the
conditions of ecosystems are but one avenue by which human well-being is affected. If ,
economic substitution possibilities are high enough, natural disruption is not a special cause for
concern in the economic model provided society's total savings rate is high enough to
compensate for reduction of natural capital and thereby produce sustainable welfare paths.
Even irreversible changes in the physical state, of ecosystems are not that significant in 'this case,
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though the economic consequences of irreversible physical changes need to be accounted for.s.
However, the converse also is true: if substitution possibilities are limited, then satisfying both
current consumption demands and intergenerational equity concerns leads to a special need for
safeguarding natural capital. Here physical irreversibilities could raise concerns about
irreversible economic costs that are a.significant social concern.6 - _
The substitution issue goes beyond substituting technological progress (human and ,
• knowledge capital) or investment (built capital) for .depletion of mineral and energy resources,
as important as this set of substitution questions is. Substitution also involves the ability to
offset a diminished capacity of the natural environment to provide waste absorption, ecological
system maintenance, and aesthetic services. Questions about substitution and technical progress .
versus thresholds and catastrophe risks are especially relevant when addressing large-scale
damages to natural systems whose ecological functions remain poorly understood (Holling,
1993; Holling, 1994a; I994b). , ; : ._ . .
As discussed further in Appendix A, the literature on'depletable resources and economic
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progress shows that a relatively substantial capacity to substitute other inputs for diminished ^
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natural capital services is needed to maintain consumption of final goods and services over
timeJ The difficulty with these conditions is that they seem to be inconsistent with physical
laws.8 Since the first law of thermodynamics requires conservation of mass and energy, the
5ln particular, permanent changes in physical states should be assigned an opportunity cost
that reflect the loss of future as well as current services (see Krutilla and Fisher 1985).
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s • 6ln this connection, the terms "weak sustainability" and "strong sustainability" are often
invoked, though these terms can be interpreted in various ways. An- interpretation that refers
directly to substitution among different production inputs is found in Pearce and Atkinson (1993) .-
and Victor (1991). In this interpretation, if natural and other capital are substitutable then the weak
sustainability criterion of preserving aggregate capital can be applied, but if there are limits on
substitution then the strong sustainability criterion of preserving natural capital may be relevant
Another interpretation of weak and strong sustainability, one with an intertemporal element, is
found in Barbier, Markandya, and Pearce (1990). These authors treat strong sustainability as '.
requiring that net damages to environmental capital be nonpositive along the whole time path of
resource exploitation, while weak sustainability requires only that the present value of damages be
nonpositive; both of these definitions allow for. some substitutability among various capital inputs.
' 7See Dasguptaand Heal (1974), Solow,( 1974), and Stiglitz (1974).,
. 8For discussion of physical limits see Ayres and Kneese (1969), Kneese, Ayres and
d'Arge (1971), Perrings (1986). Anderson (1987), and Gross and Veendorp (1990), Holling
1994b). . '::• " , " • , . (
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implication that, for example, the economy could run on a vanishingly small quantity of energy
is problematic. It seems more plausible to assume minimum input requirements and a bounded
productivity of material and energy inputs, thus eventually limiting total output to a level
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consistent with the capacity of renewable resource inputs. Materials balance also raises the
specter of congested waste sinks as, total demand for goods and services grows. In addition,
dissipation of production potential (implied by the second law of thermodynamics) may limit '
long-term production, though here the argument is more controversial (cf. Daly, 1992a; 1992b;
and Young, 1991; 1994). .. •' - .'. "' • "-
In contrast to the economic perspective of ecosystems as "service factories," ecologists
see these systems as complex, dynamic sets of processes that are organized on multiple scales
(see Allen and.Starr 1982, O'Neill, et. al., 1986; Holling 1986, Common and Perrings 1992,
and Norton and Ulanowicz 1992). Smaller-scale components or subsystems (e.g., a single
lake) respond quickly to stimuli and can recover relatively quickly from shocks; moreover,
there is much more redundancy at this scale. For these reasons, the substitution paradigm iii
economics can fit well with the function of lower-scale ecological systems as.sources.of
services. In contrast, higher-scale systems (e.g., entire watersheds; in the limit, the biosphere
as a whole) respond much more slowly and with less redundancy. While even large-scale
systems are resilient up to a point, it is possible to push them past that point and trigger rapid,
discontinuous changes in function that may require large amounts of time for recovery. Asa
consequence of these features, the substitution paradigm that allows for incremental changes is
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less well^suited to large-scale ecological impacts. This does not mean that the . '*
factory-of-services model is wrong, but it does suggest that the rules governing the factory can
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be quite differentfrom those typically assumed in economic analysis.
One important reason ecologists and economists have very different views of the
systems producing services is their very different approach to problems of scale. Ecologists
see substitutability as strongly scale-sensitive. For an ecologist, for example, the death' of an
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individual and its replacement by another "recruit" within a self-sustaining population simply
does not matter, ecologically, because it does not affect the overall functioning of the system
(Cooper, forthcoming). Death of a whole population, through epidemic disease or human
exploitation, on the other hand, might cause irreversible changes across multiple levels of
ecological organization. If such changes .occur as a result of the local extirpation of a species,
ecologists would conclude that the species in question was a "keystone" species—one that
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regulates important systern-level, functions,9 Alternatively, local loss of a species might have
little or no effect on system-level functioning, in which case the ecologist will conclude that the
systems contained significant redundancy of junction; the function once fulfilled by the lost
species was assumed by other species, and from an ecological viewpoint the species loss was
of little significance. But even with this simplest of examples, the introduction of scale^
sensitivity into the analysis creates a number of both quandaries and opportunities.
' •
• First, notice that these basic points cannot even be made without recognizing scale as an
important organizing principle in ecological systems themselves. 1.0 Once one recognizes that
some species are significant on the scale of ecological systems and others are not, study of thie
system-and evaluation of changes in it-must take this difference into account. Ecological
theory therefore requires a complex treatment oif interactions among scales in a system.
Hierachy theory has emerged as one important tool for organizing these inter-scalar
relationships and will be discussed below. • . • _'..'.
Second, given the importance of relationships across scales, precise judgments of the
"importance'' of any element to humans cannot proceed without knowledge of them. For
example, a very high value might be placed on protecting the state bird, even if its loss would
likely be ecologically insignificant Suppose, alternatively, that the species in question will not
.be directly or immediately missed by humans, but that the species is highly significant
ecologically in mat its loss will cause important reverberations on the larger, ecosystem level
.(Wilson, 1987). In this latter case, it can be learned (either by unusual ecological foresight or,
more likely, by,sad recognition of the effect after the fact) that the systemic ecological change in
question will eliminate the habitat for the state bird over a period of decades, i' Here,
knowledge that people value the state bird is just as important as in the case of a direct threat,
9See Pimm (1991) for a theoretical definition in terms of food webs.
Allen and Starr (1982) and Allen and Hoekstra (1992) for arguments that scale
relationships are an essential feature of how we understand complex physical systems. On this
view, we can remain agnostic regarding the actual existence of irreducible scalar structure in .
nature. But Rolling has recently introduced empirical evidence that there are unavoidable scalar
structures as an element in the actual structure of ecological communities, if viewed from the
perspective of animals with characteristic body sizes (Holling, 1992). • . - ;
1 1 See Norton ( 1 988) for a discussion of the "contributory value" of species that support
the existence of other species and the difficulties of incorporating this value into a cost-benefit
analysis. _ • , - . , . '
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but if the "production function" for more individuals of the species is not known, that valuation
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cannot affect management choices. A key question in conservation ecology is therefore the
, problem of identifying changes.that are likely to result in "cascading effects": How likely is it ,'
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that a change in some element'of the system will cause changes in other.elements or in other
levels of ecological functioning? •- • . • J - '• '
•• These concerns have led Holling( 1992) to introduce the category of "keystone '-•
processes", analogous to the idea of keystone species, but targeted at the level of important
ecological processes. This concept incorporates the idea of species redundancy into the
analysis, recognizing that in some cases an important ecological function is performed by a .
, single species and. in cases of redundancy, by suites of species, the problem with.these *> •
concepts in practice, however, is that determining the amount of redundancy in a system, and'
hence the likelihood of cascading effects from any change in ah element of the system, is •
notoriously difficult.1,2 .'. ' ' ' • . '
Third, the scale-sensitivity of ecologists deeply affects their conception of
irreversibility. In economics, risk'of cancer or other life-threatening illnesses trigger concerns
of irreversible loss at the individual level. These-risks are justifiably thought to involve strong'
negative evaluations and justify sometimes quite costly avoidance strategies as well as insurance
policies to mitigate consequences. For ecologists, by contrast, irreversibility of individual -
death is unimportant, whereas impacts that may set in motion irreversible cascading effects with
unpredictable results on multiple levels-r-such as losses of whole populations or keystone.
processes—must be taken very seriously. In this sense, irreversibility for ecologists is
. inextricably linked to scale. Irreversible changes at small scales are considered less important
1 *'..•'/' . " ' ' '
than irreversible changes at a large scale because small-scale changes may, given redundancies
.in the system, have virtually no impacts on other levels. Such scalar determinations are not, ..
however, easily generalized and often require local knowledge. Judgments in this area require
detailed knowledge of species inter-relationships and of ecosystem functioning that are usually
unavailable without detailed study of the particular system in question. Thus, any valuation of
12The Risk Assessment Forum, for example, in its workshop, on Ecological Risk ,
Assessment, has provided a discussion of how to evaluate the "ecological significance" of a risk.
Two points were emphasized. First,, there will always be difficulty in determining whether a
change represents an ecological discontinuity—whether, that is, a humanTinduced change exceeds1
the range of natural variation—because natural systems fluctuate at many scales. Some very subtle
changes can ha've^huge impacts over multiple generations (Pimm, 1991). Second, this report
acknowledges that, in a management process, human values as well as scientific descriptions are
an important part of any assessment of ecological significance (Harwell, Cooper, Norton, and
Gentile, 1994; Norton. 1994a).~ . . ' - . ' «' •- • .
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impacts of human activities that, is ecologically informed and scale-sensitive must rely on .
careful and detailed description and analysis of the ecological relationships that will be affected
by those activities. 13 • .• .
. Fourth, Commons and Perririgs( 1992) have shown that the concepts of stability as
used by ecologists and economists are largely disjoint in that the ecological concept of
.resilience taken as indicative of .ecological sustainability emerges at the ecosystem level, while
, the notion of economic stability most employed by economists directs their attention at
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sustainability at the level of economic organization. 1* These variables can change
independently and at rates that differ by orders of magnitude in time (Holling, 1992; Norton
and Ulanowicz, 1992). More,importantly, while the economic model typically abstracts from
1 scale changes in the economy relative to the natural systems encompassing it, Holling (1992)
and others have noted that large-scale ecosystems can, given pervasive and long-lasting
management for economic productivity, become brittle and more likely to shift into another
level of functioning. These new basins of attraction in system functioning can be far less .
supportive of human services and vother human values.
Fifm, and this may be me most profound level of disagreement we can mention here,
the two conceptualizations of stability can only be modelled in systems that have vastly different
characteristics, systems that differ in the most basic assumptions that give meaning to
disciplinary models of explanation. In particular, many of the above^discussed differences
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between economists and ecologists may rest on the fact that economists generally favor
equilibrium systems, while ecologists usually employ dynamic, process models.to describe
-. human interactions with the physical world (Waldrop, 1992; Ulanowicz, 1986; Pimm, 1991;
Norton, 1992a). We cannot, in this brief review, address these broad issues, but we encourage
discussion of theconsequences of these differences in economic models and ecological models.
In particular, how does one relate information derived in an equilibrium system with
information embodied in dynamic systems with feedbacks and redundancies in which processes
and change are modelled?
13This commitment of ecologists.to detailed empirical observation of particular systems is
illustrative of a deeper disciplinary difference with many economists. Economists build universal
mathematical models, employing highly aggregated data (Waldrop, 1992); ecologists usually build
site-specific, observation-based models (Ehrenfeld, 1993). • .
Holling (1973) Pimm (1984; 1991) for discussions of the difficult 'problems in
conceptualizing ecological stability. , • - .
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Recent work in ecological approaches to environmental management has built upon the
assumptions of hierarchical organization of systems discussed above. The hierarchical
approach to management attempts to track changes in dynamics at multiple levels, relying on,
two assumptions: , ,. '!.';'• • •
1. Perspecthal Orientation: Changes in the system must be described, understood,
and valued from some point within the hierarchy. Unlike description in mechanical, Newtonian
systems, which assume a .unified point of observation from outside nature, hierarchical
description always specifies an observation point and a scalar context. For example,. -^
interpretation of the information .gathered by an observer looking through a microscope, a
telescope, and with the naked eye requires scalar integration of the various scales of resolution.
embodied in the observation set. v ' . ' ..
1 2. Asymmetry: Ecological systems are nested open systems in which the smaller
•, ' i ' . •
subsystems change more rapidly than do the larger systems that form their "environment." The
larger system sets the constraints, patterns of stability, and opportunities which confront
"actors" on smaller, and faster levels. But if one wishes to analyze the mechanisms and '
processes describing these larger systems, one looks to the smaller, component level.
i ' E -
The advantages of hierarchical systems, which are admittedly more complex and less'
reductionistic than equilibrium models, is that it is possible to identify changes caused in larger
systems by paying attention.to behaviors of individuals at lower levels (cross-level spill-over
effects). Such models also provide a way to make individual preferences endogenous to the
impacts of human choices on larger, normally slower-changing systems (Common and
Perrings, 1992; Holling, 1994b; Norton, 1992a; 1994a; n.d.). A further advantage of
hierarchical analysis is that, if it is possible to associate important social values wiiii various
levels of the hierarchy, then it may be possible to devise policies that encourage the
simultaneous attainment of human goals on.more than one level by choosing-pplicies that have
' • ~ > f f-
positive impacts on multiple scales. Alternatively, one can seek opportunities to enhance ant
valued dynamic that at least have.neutral impacts on other levels of the hierarchical system.
Hierarchical assumptions therefore show some promise to integrate economic and ecological
information by associating the information with different levels of organization of a dynamic
system. sincexeconomies operate at smaller scales and faster rates than'the ecological landscape
• within which they are embedded.
• According to this view, then, scalar differentiation permits (and enforces) this modelling
of. economic dynamics and ecological dynamics at different scales, suggesting in turn that there
may be multiple measures of economic sustainability and ecological sustainability across time.
11
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On the'other hand,.economists might argue that such complexity is not justified. It might be
argued that welfare-based economic models can capture all that is important in keeping
sustainability accounts or, alternatively; it might be argued that ecological sustainability can be
reduced to questions of economic choice and welfare by calibrating changes in states of
ecological systems with changes in the welfare of human populations.
Given potential nonsubstitutabilities between services derived from natural capital and
other productive inputs, how can economic .analysis proceed to address issues of sustainability?
Even within a utilitarian construct, one can represent nonsubstitutabilities in the economic
production constraints that determine society's opportunity set One could then attach economic
values to different outcomes, even if there were limits on substitutability. This strategy
doubtless would involve a departure from,the marginal analysis generally favored in economic
theory J However, the basic logic of that theory does not strictly depend on the capacity to make
smooth marginal changes in all decisions and consequences.15 It does depend, however, on an ".
enumeration of the possibilities available for decisions and their consequences. In the present
context, the approach just described would require a very sophisticated description of
production possibilities that integrates built capital, natural capital, and knowledge at multiple
scales and time frames: While some promising beginnings toward this end have been
undertaken, it seems clear that in practice we still face gross uncertainties in applying standard
economic practice to the problem at hand. Moreover, this approach does not address the
criticisms of honeconomists regarding moral requirements and the valuation of ecological '.
resources, as discussed in the next section. : ' ' ' .-
Attention to the physical state of ecosystems as well as to economic information is
needed in forming judgments about nonsubstitutabilities and their implications for management,
especially in light of the value judgments embedded in standard benefit-cost analysis. At the
same time, proponents of using ecological information in policy analysis need to make clear
both the scientific basis for such applications and the value judgments that are embodied. As an
example of the latter point, Norton (1989) asserts that no generation should destabilize the
ecosystem functions that underlie and provide the context for all human activity. Similar
statements about science and value judgments need to be enunciated and debated to undergird ,
ecological indicators at smaller scales. ,
Another key empirical issue in considering reversibility and substitutability is the
capacity of technological progress to continue without bound, and the capacity of humans to
1 SSee Scarf (1981a?b).
12
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keep up with perpetually accelerating technical changed 6 To date, technical progress has been
a powerful deterrent to absolute physical scarcity, i7. However, the ecological resources that ' '
may be becoming scarcer-such as waste heat absorption capacity—are not those for which we
have a long record of experience in management, let alone innovation to alleviate constraints. •
Efforts to improve the efficiency of ecological management also are hampered by i jaunting
physical uncertainties about the functioning of complex natural systems.18 , ..
*"/'•• • '
One way to summarize this variety of disagreements and issues surrounding
reversibiUty and substitutabUity is to describe mainstream, economists and ecologists as
adopting different approaches to specifying a fair bequest package for future gena:ations given
that one has accepted some ethical obligation to the future (See Section III, below). Solow
. (1993), for example, argues that, since resources are fungible, intergenerational obligations
reduce to a concern for a fair investment policy. There are no particular things that we owe. J
Solow therefore concludes that while we owe the future opportunities equal to our own—which
requires that we maintain a nondeclining stock of aggregated capital— the obligation to the
future can be discharged.simply by maintaining adequate investment in order to compensate the
future for use or degradation of particular resources. This position can be understood as
advocating an "unstructured bequest package" between generations-rsustainability can be
represented as an obligation to honor a fair savings rate across generations.19 • ,.
. An unstructured bequest package is adequate if one accepts fungibility of resources; but
many theorists do not accept this methodological simplification (Page, 1977; Doeleman, 1980;
N
United Nations, 1993), insisting that we must protect natural capital as a special category of
i ' ' v 1
obligations. Ecological economists have in this sense advocated a more "highly structured
. i6For discussion of these issues see Ayres and Miller (1980); Baumol (1986), Daly
(1992a,b), Lozada (1991), Young (1991, 1994), Amir (1992), and Pezzey (1992).
s , * •
• 1 ?See Smto ( 1 979) for a compendium' of the empirical debate on resource scarcity.
' j ' ' ' ' ' '
• ' ' ~ '
18Efforts to perpetually accelerate technical progress ultimately also may tax our' genetic
ability to process information (Pezzey 1992). . ' , - . •
f ' . , / . , •
1 9lt should be noted that Solow ( 1 993) recognizes that one generation might set aside ,
special places and features such as the Grand Canyon or Yellowstone National Park for future
generations because they are loved for their intrinsic qualities. He does not, however, treat this as '
an obligation to the future, but rather as an aesthetic choice of the present, nor does he consider
such actions as relevant to problems of sustaining economic-productivity into the future.
•--••'.'. ' . 13 . -. . •" • -
-------
bequest package," one that keeps accounts of "natural" and aman-made" capital separately
(Daly and Cobb, 1989; Costanza, et. al., 1993; Norton, forthcoming b). These obligations are
often associated by ecologists with a concern for large-scale physical and community
processes. Moreover, ecologists doubt we can meaningfully measure the welfare benefits of
protecting large-scale processes, and thus tend to favor protection of physical processes even if
changes in these objects of protection cannot be calibrated in terms of individual welfare . •
' **' \
benefits. They argue that there is an ethical obligation to protect large-scale ecosystem
processes as the basis of future productivity and options (Weiss, 1989; Norton, 1989).
<< This disagreement over the characterization of the bequest package is important because
it affects what counts as data relevant to measuring progress toward sustainable resource use
paths. If the beqiiest package is unstructured, highly aggregated data regarding national income
• • .-•'
accounts and the rate of savings provides crucial information to assess the sustainability of
current policies. If the bequest package must be more structured to ensure fairness across .
generations, more disaggregated data regarding changes in particular resources arid regarding
effects on ecologicals.processes will be necessary.
: Some authors have therefore insisted that we must keep physical accounts in terms not
commensurate with intertemporal welfare accounts—that natural capital must be described in
physical terms, not just in terms reducible to welfare measures. In Part IV, we will interpret the
concepts of ecosystem health and integrity as proposals to operationalize measures of natural
capital as embodied in intact ecological processes .and systems. This position represents a
natural application of the commitment of ecologists to specify those changes in ecosystem states
that are both irreversible and essential to future productivity. Haying summarized the issues
separating economists and ecologists regarding reversibility and fungibility of resources as
indicated in differing ways of specifying an intergenerationally fair bequest package, we can
now turn to the second cluster of issues separating economists and ecologists, questions of
. long-term valuation.
Part III: .Values, Valuation, and Accounting .
One very practical area of disagreement between ecologists and economists is the whole
area of valuation studies and modelling, which is sometimes referred to as the problem of
"environmental accounting." .Speaking flippantly, one might say that the environmental
accounting problem, insofar as it has been addressed across disciplines, has had very little to do
with accounting in the usual sense. The problem is that advocates of more stringent
environmental policies, and those who oppose them as sometimes going too far, often cannot
agree on what really counts. And you can't account until you know what to count! .If the • .
14
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disputants could agree on what to count, the problem of aggregating ,the resulting figures into
useful accounting "books" would be, if not easy,,at least significantly advanced. So one -
'important aspect of the accounting problem is the underlying theoretical problem of valuation-
how should we assign values, and what values, however measured^ should be assigned ttr
changes in states of the world tKat result from human actions that degrade or protect the
environment? , • - ',-,•>' •
On one level, this question is easily answered. Suppose we'ask which important
human'Values should be taken into account when environmental policies are formulated?
Everyone agrees that ALL of them should be. But the consensus has always broken down,
quickly when we seek to specify particulars in a way that pleases practitioners of various
scientific disciplines. In this section we will survey some of the difficult moral and conceptual
problems that bear upon the question of how to value environmental changes, paying special
attention to changes that are large in physical scale and unfold slowly—over decades,
generations, and millennia. - = .. . .
Characterizing Future Values . • ...
If sustainability means anything—and we sense at least this agreement from all quarters--
" • " '- . • • . • ^ • ' ' ^
it represents a concern for the future, especially including Horizons beyond the"length of a
, human generation. But there exists very little agreement across the humanistic disciplines or the
social science disciplines regarding how to formulate and evaluate our concern for 'the well- , .
being future generations or our obligations to them (Norton, forthcoming c). Nor do ]
economists themselves embrace a single account.of intertemporal fairness. Most economists
argue that discounting is essential to account for the time preferences exhibited in individual v
behavior (Lind, 1982). They are much less agreed that discounting is an adequate tool for
analyzing intergenerational obligations withinia system of welfare analysis. One approach has
been to define a "social" discount rate which is lower than the rate of personal discounting, .
applying the social rate of discount to public goods and the private rate to individual decisions
(Pearce, 1983). But there have also been cogent arguments that the search for a correct social
discount rate is futile (Page, 1988). No discipline—not ecology, not economics, and not
( ' i ' *
philosophy—provides a coherent and complete understanding of human values as they are ,
, • i ',"•'•
applied across multiple generations. As background to the conference, .we provide here a broad
overview of some .of the deep philosophical issues that are involved in the choice of a decision
model for actions that will have impacts across multiple generations." .
1\ What Is the Nature of Possible. Ethical Obligations to the Future?
Philosophical ethics encompasses a variety of conceptualizations of moral obligations.
15
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At least three types of general theories are usually recognized: (1) teleology, including
utilitarianism of various sorts, welfare economics and various interest theories; (2) rights
theory/deontology; and (3) contractarian theories. Each of these major types of theories
suggests a somewhat different formulation of intertemporal obligations. Utilitarians would
emphasize all generations having a chance to maximize their welfare as individuals with various
criteria for intertemporal welfare ccomparisons, in a rights theory, the question is whether we
should act as though future people have rights that we must respect; and contractarians have
emphasized the importance of at least implicit "consent" which, applied intergenerationally,
would imply an acceptable rate of exploitation and savings in every generation. . ;
, Aside from being confusing, this profusion of formulations obscures important
questions about the nature of intergenerational obligations. For example, while a utilitarian
would aggregate welfare within generations and then compare it across generations, a
deontologist might argue that, if we act as though future persons really have rights, these rights
would trump any mere enjoyments that the present gains at the expense of future well-being..
Advocates of the utilitarian line of reasoning oblige themselves to. measure welfare in terms that •
are fungible across persons and across time, and address the intergenerational opportunities by
specifying rules that will guarantee that future generations will have the opportunity to enjoy a
standard of living (measured in units of individual welfare) comparable to that of preceding
generations (World Commission on Environment and Development^ 1987). The'deontological
line of reasoning has usually been premised on the assumption that the time at which a harm
occurs is irrelevant to its moral status (Parfit, 1983; Page, 1994), implying that if the decisions -
and actions of the present terribly damage the life prospects of future generations of persons in
avoidable ways, the present will have been guilty of intertemporal despotism. \ •
This latter approach to intergenerational obligations encourages a formulation of policies
that distinguish "vital" from "non-vital" needs, placing obligations on the present to respect
those resources essential to the future's ability to supply its "basic needs". This approach is
.buttressed by its analogy to our obligations to peoples who live in other countries and on other
continents, in which case it is assumed that the world community should intervene, where.
possible, to protect the basic, human rights of all persons of all countries. However, even in this
case there is considerable disagreement regarding what constitutes basic needs and what level of
infringement obliges intervention. Moreover, the analogy is not perfect; whereas persons in
distant countries are undisputably moral persons Who could advocate their interests in a real or
hypothetical forum, future people are only potential persons. Specification of any contract .
spanning bur generation and generations not yet bom necessarily represents a thought
16
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experiment carried out by us in the present. Despite this disanalogy, we can cite one significant
area of agreement between mainstream economists and'rights theoreticians, including
contractarians., Many theoreticians apparently agree that our ability; tt> affect the way the future
' will live imposes a responsibility that involves issues of justice, fairness, and equity, not just
questions of economic efficiency (Solow, 1993; Rawls, 1991; Page, 1977; Weiss, 1989; . '
. -Howarth, forthcoming). . . . , ' . .
. . There is,also the question of how these,multiple formulations interact with each other in
decision making. Should we formulate policy in response to threats'to the basic rights of future
people or in terms of a fair investment policy within a welfare-based analysis? Can we pursue
policies in response to threats to both rights and to basic welfare, or would attempts to follow
these rules simultaneously point us toward contradictory goals or different priorities in
'1 _ r , • ' ' '
'. protecting resources for the future? . ' v
•' ' - - . . \
, Putting these policy questions in more philosophical terms, the question "of how. to
identify what resources to save for the future raises the abstract question of "moral monism".
, Theories of value are "monistic" if they resolve all philosophical quandaries according to a .
single principle or criterion. Pluralistic approaches to ethics recognize multiple principles arid
criteria. Stone (1987) has argued that environmental ethics is best approached pluralistically,
\ that wise management of the environment will require the application of differing principles in
various situations. Callicott,(1990) has .criticized Stone's pluralism, however, arguing that,
pluralistic principles would result in the arbitrary, or self-interested, application of principles in
particularcases. These issues are addressed ,in more detail in Appendix B. In Part IV we will >
exploreia two-tier approach to environmental valuation that might be called a form of
"integrated pluralism", which applies multiple criteria according to unifying second-order rules.
Interestingly, most rights theorists and utilitarians share a commitment to monism.
Utilitarians and debntologists at least strive toward monism, employing either a welfare •
criterion or a rights-based criterion exclusively. Practically, what is at stake is whether the
accounting system used to measure sustainability will have a single currency, or whether the
system willbe pluralistic! The theoretical issue of monism versus pluralism is particularly
applicable to problems of accounting and foundations of environmental economics.. '
Economists, who have favored a single, monetary system of accounting for environmental
values based on individual preferences, are committed to monism because they."reduce" all •
environmental values to individual preferences. But it is a controversial question whether
17
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consumer preferences can measure all types of values;20 and it is also controversial whether
individual preferences should be considered " sovereign". The principle of consumer
sovereignty-which states.that individual indicators of value, such as dollars spent or
',-' ' * ' * i, f -
hypothetical willingness to pay, is taken as "given" by economists (Randall, 1988). But this
concept is ambiguous, and different interpretations apparently have,quite different
methodological implications (Norton, 1994b). This issue is practically important because it
affects the exogeneity of preferences to economic analysis. These complexities of monism'
versus pluralism and confusions surrounding the import of consumer sovereignty are explored
in more detail in Appendix B. . . ' .
2. Intergenerational Equity: A Decomposition of the Problem
The problem of iritergenerational obligations can be heuristically decomposed into three
aspects, all of which pose important and deep questions about which it would,be difficult to
achieve full agreement These subproblems are:
. A. The Identity Problem: How 'do we know what elements arid processes will be
essential for members of future generations to fulfill their wants and needs? How do we know
what future people will need and what they will cherish? It appears .we cannot know who, or
how many, will exist in the future, so how can we tailor present policies to help them? Worse,
20Qrie prominent issue in the moral theory of environmental ethics is the question of
whether nature has "intrinsic value". Several philosophical theories-sometimes associated with
"deep ecology," although there are many advocates of intrinsic value in nature who would not so
f describe themselves—posit nonanthropocentric values, values that exist independently of human
values and motives (Devall and Sessions, 1985; Callicott, 1989; Taylor, 1986). These theories are
monistic in the sense that they posit a single type of value that exists in individual humans and also
in nonhuman nature. We will not address intrinsic value theories in this paper for two reasons.
Deep ecologists have generally rejected a sustainability ethic, especially if it includes a commitment
to development of resources for future human use, because these commitments are viewed as
human-centered;: also, there no clear policy implications have emerged from the pronouncements
of biocentrists and ecocentrists. One problem that has contributed to both of these aspects of deep l
' ecology is that the extension of moral standing to other species, their members, and to ecological
systems as well as human individuals only proliferates conflicting obligations. Sometimes, for
example, actions to protect one.species requires harming members of another species; attempts to
protect species can apparently conflict with plans to recover ecological systems (Alper, 1992). The
expansion of our obligations to other species and to multiple levels of natural systems leads to a
welter of incompatible obligations, and at least so far deep ecologists and intrinsic value theorists
have provided no criterion to resolve these difficult cases. What we need is some method by
which to categorize and prioritize our conflicting obligations. We therefore proceed on the
assumption that we must understand nature from the perspective of humans and that, even if we' .
' make decisions that deeply affect other species and natural systems, we must evaluate these
impacts from a human perspective, employing values that can be.understood from a human
viewpoint .... - • ,
-------
the decisions we make may determine bouY which persons, and how many of them, exist in the
future. .-..-••'.. ' - - . ' .",-.'-
, B. The Distance Problem: .How far into the future do the obligations of any
generation extend? One aspect of this-question is sometimes referred to as "the motivation :
problem" (Care, 1982). While it is relatively easy to understand obligations of any given
generation to the next—their children—it is more difficult to see why present people should be .
motivated by concerns for generations subsequent to the next one or two. Perhaps this -
motivation problem, which is a fascinating one in its own right, can be bypassed here because,
given the context of this colloquium^ it is assumed that, to the extent we can specify
1 sustainability obligations to the future, whether near or distant, we will act on those obligations.
Nevertheless, there remains the question of how far into the future our obligations extend. Do
these obligations lengthen as the advancement of technology and the increase of scale of human
impacts increases? Or, can we fulfill our obligations by ensuring that the next generation has
adequate resources and possibilities to ours? Currently, policies pursued by most governments
are apparently "presentist," in the sense that they concentrate on near-term impacts, but policy
discussions are sometimes being framed in multi-generational terms (NationalAcademy of
-Public Administration, 1994)..' i . • ' . •'..,.
C. The Significance of Effects Problem: Not every human action results in
significant impacts on future generations; what are the general characteristics by which we can
' identify effects sufficiently significant to entail special; intergenerational. obligations? Under ,
, this heading are included all of the questions raised in Part n regarding substitutability,
fungibility, irreversibility and so forth. But it also includes important and not-well-understood
- questions about our obligations in developing the values and behavioral tendencies of future
generations as part of the dynamic. See Appendix B and Norton (1994b) for further discussion
of these questions, which are inextricably entwined with the question of the meaning of
1 i -i • . '
consumer sovereignty. - . •
We believe that one's views on the significance of effects problem has much to do also
with the competition of utilitarian and marginalist theories with the more deontological
formulations of rights theorists. Those, impressed with the intersubstitutability of resources and
the fungibility of resources across space and time will favor quantified and aggregatable data
, about human welfare impacts and a computational style of decision making. Those; who believe
some resources are fragile, and at the same time essential for the future to fill their basic needs,
•'19.
-------
will tend to speak in terms of obligations, hot computations.-1 '.'•"' \'
We now briefly discuss these three subproblems in turn.
A. The Identity Problem: \
. The identity problem actually comes in two forms. First, theire is the problem of
identifying the wants and needs of members of future generations, given the tendencies of
fashions to change and for technological breakthroughs to shift needs from one to another
material input (Sagoff, 1974; Solow, 1993). Second, there is the problem of identifying future
individuals. As Parfit (1983) points out, the choices we make regarding consumption and
protection will eventually affect which individuals and how many will be born in the future.22
Therefore, we cannot use the welfare of future individuals to justify current attempts to protect
- < -. ••
the well-being of the future, because the very existence of those individuals rests on the
decisions we must make now. He reasons as follows: Assume that future persons will be
happy to be bom even if their level of consumption is less than it might have been if earlier
generations had been more frugal with resources. But,1 Parfit argues, if the present chooses a
resource use path that is profligate in consumption of resources, these different choices would
result in different'peopie being born as time goes on and impacts of different policies affect who
meets and who marries. Those who are actually born will therefore have, no reason to fault
their progenitors because, if earlier generations had consumed'less, some other persons would
have been born to enjoy these greater, resources. So future individuals will have no reason to
fault the present as long as their life is, on the whole, better than not being born at all.
This clever argument apparently shows that any attempt to justify intergeneratibnal.
obligations., at least beyond the next generation, is hopeless—but the logic of the argument
requires careful analysis. First, note that Parfit's paradoxical argument does not give aid or
comfort to advocates of a highly aggregated approach to intergenerational obligations (such as ,
the one attributed to Solow in Part II) either. According to Parfit's argument, we cannot be
faulted even if we greatly deplete aggregated capital stocks of ail types, provided we do not
make life in the future unbearable. So Parfit's reasoning undercuts aggregative notions of
intergenerational fairness as well as stronger sustainability principles that specify essential
natural capital. Second, notice that Parfit's argument assumes rather than proves .that all values
will be interpreted in terms of the welfare of individuals in the future—that harms must be „
21 See Howarth, forthcoming, for an example of this tendency.
22Also see Norton (1984); Norton (forthcoming'c).. /
, • \ :v • "••',. ,20. '
-------
counted as decrements in the welfare of individuals who live in the future. So, Parfit's
paradoxical reasoning can be turned back upon both utilitarians and rights theorists/ Parfit's
argument can be taken as showing that, while we may have obligations regarding the future,
these obligations cannot be obligations to identifiable individuals, but must be obligations to
something else or of some other nature (Norton, 1982; forthcoming c).
Weiss (Weiss, 1989), for example, argues that intergenerational fairness-rests on an
obligation to future generations as generations. Norton (.19915) has suggested that, following
Burke (1790), obligations of this sort should be thought of "organically",as obligations to the
ongoing society or culture. It would also be possible, relying on the stewardship traditioiyto-
.argue that the obligation to protect as well as use resources to be an obligation to God the '
creator. Weiss also argues that every major world religion, and many minor ones as well, posit
an obligation to leave resources unimpaired All of these positions, then, would provide
alternatives to the economic and individualistic conceptualization of intergenerational fairness.
' "" ' * • • . -'
These conceptualizations bypass Parfit's argument by avoiding a commitment to individualism
in ethics. By formulating'obligations not expressible as individual rights, they avoid many of
the issues raised by the identity problem because they posit obligations to the future that exist
quite independent of obligations to individuals or obligations to provide for their specific needs.
The cost of this avoidance* however, is apparently that opponents of presentism must abandon
the idea, prominentin Western culture since the Enlightenment, that all ethical obligations are .
owed to individuals: This problenvapparently is lessened if we take a more utilitarian ' • .
perspective by arguing that individuals in the current generation wish to preserve opportunities
for the future. However, this begs the philosophical question of whether the present cares for
11 ^ ' '
the future. • ' ' : , ' . . ..•
B. The Distance Problem: The question of valuation of future impacts of policies is
deeply entwined with the question of how far into the future our obligations extend. There is
an inevitable asymmetry in intertemporal morality. Present generations have powerregarding
the future—they, will have to live with the consequences of our decisions, just as we live with
the consequences of decisions of our forbears. But the future has no power over .the past, and
.. .• ^ / -\, • • • • '
cannot contribute to our well-being. Therefore, if decisions are made in the present with no
concern for the future ("presentism") then the result is apparently a fornrof intergenerational
- despotism.- • ., ' . ...
Philosophers have generally based their arguments on the principle that the time at
which a moral harm is felt is irrelevant to its moral significance, which apparently implies an
•- •*% " .
even-handed response to conflicts in moral interests across time. The practice of discounting .
21
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apparently conflicts with this moral principle (Page, 1994), especially when applied across
generations. Any sizable interest rate applied to costs and benefits experienced in the future will
reduce concern asymptotically toward zero within only one or two generations. Is this fair?
Presentists offer a very general argument for what can be called "The Grand
Simplification", an argument that derives its strength from the apparent insolubility.of the
indentification problem. According to this argument, since the present cannot know what the
future will want, the best we can do is to ensure that the next generations will have .
opportunities at least equal to our opportunities. In its extreme form, the Grand Simplification
denies any obligations to future generations past our children and perhaps grandchildren. John
Passmore (1974) argues that, whether one accepts a rights theory or a utilitarian theory of ,
ihtergeneratiqnal value, the impossibility of identifying what resources will be desired by ,
distant generations reduces our obligations to the future to a question of ensuring that the next
generation has opportunities equal to our own. In its utilitarian form, this argument could be
combined with economists' ideas of substitutability and fungibility of resources across time by
compensating the future in discounted dollars invested in the present This issue .is explored in
more detail in Appendix B. In the form applicable to deontological ethics, it is argued that future
persons cannot form with us a moral community, and therefore that we owe cannot possibly
owe obligations to them (Passmore, 1974). It is a common element of these forms of
presentism that they are based on a commitment to moral individualism.. Thus, while there
seems little hope of solving the identity problem and applying it to the distance problem, those ,
who reject moral individualism can simply bypass the identity problem and posit values riot
owed to individuals as noted above. They would then face the difficult conceptual problem of
how to articulate non-individualistically based moral obligations, but they would have provided
a coherent ethical foundation for strong siistainability. Again, it seems that the conclusion must
be that further interdisciplinary discussions will be necessary if we are to create a consensual
*
viewpoint on the distance problem. ,
C. The Significance of Effects Problem , ,
Intuitively, it seems obvious that some actions we take in the present have
intergenerational implications while others apparently do not. For example, if I cut down one
tree and plant a replacement that will be comparable in a couple of decades, my act probably has
no intergenerational implications. But a decision to clear-cut most of a watershed, which might
entail cascading ecological impacts from erosion, etc., seems much more likely to have
significant intergenerational impacts. Again, the very different views of scale and
substitutability of economists and.ecologists shape responses to the problem of significance.
"22
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Belief that there is unlimited potential for substitution ]pf one resource for another encourages
" the attitude that adequate investment in developing new technologies provides adequate ;
compensation to. the future and discourages concern for specific aspects of natural capital.
Ecologists who are highly sensitized to the scale of impacts, on the other hand,'express concern
that such aggregated measures of intertemppral welfare pay little attention to large-scale and
irreversible impacts-impacts that might undermine the ecological and physical support for
economic activity by destroying key processes in the systems generating resource flows. Alan
Randall < 1986) explains this concern by adding to the usual categories of "renewable" and
"nonrenewable" resources a category of "renewable, but fragile,'' resources. Thus, while the.
sun's energy is no doubt a truly limitless renewable resource, fisheries are renewable but
fragile because it is possible to destroy the system of production essential to a flow of fish
protein into the food production system. • . ...
The Environmental Protection Agency has in the last decade introduced "ecological risk
1 ' t .
assessment" as an important aspect of policy evaluation and implementation. This introduction
has been fraught with ambiguity because it has been unclear whether risk to ecosystems should
be measured as potential to cause decrements in expected human utility or as potential (
decrements in some index of the physical state of ecological systems and processes. A recent
panel assembled to provide scientific and conceptual background papers for the-formulation of
protocols for assessment of ecological risk concluded that the "ecological significance" of a risk'
* to ecological systems and processes cannot be fully judged without (a)' an assessment of the .
.evidence that observed changes in the functioning of systems may represent a !. • ».
nonanthropbgenic pattern' of change characteristic of "natural" dynamics (which include
changes according to the "natural cycles" of the system), and (b).an assessment of whether
impacts of trends judged to be anthropogenically caused threaten-important social values •
(Harwell, Gentile, Norton, and Cooper, forthcoming). Attitudes toward this two-step process
of ascertaining ecological significance are, in turn, shaped by disciplinary assumptions.
Economists who accept unlimited substitutability will find (a) irrelevant, since the
anthropogenic source of degradation of resources is less important than the ability of the
economy to find substitute means of production for necessary goods and services, and they will
see (b) as capable of guiding policy only if anthropogenic changes in ecosystem functioning can
be reliably associated with changes in aggregated human welfare, an association they'find too
. ^fraught with uncertainty to guide policy choices. Ecologists on the other hand are more willing
to study the difficult scientific questions raised by (a) because this seems to them the only'
means to determine which human activities and practices may introduce important ecological •
23
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impacts. What is less clear is whether ecologists are capable of establishing causal connections .
between ecological and physical processes and the maintenance of important social values into
the future. So the entire question of assessing the magnitude of impacts of policies that impose
risk to ecological .communities involves both intra- .and inter-disciplinary disagreements.
If it is agreed that j udgments of ecological significance are to play an important role in
environmental policy formation, we again face the ambiguities and interdisciplinary conflicts
encountered throughout this paper: economists will judge'significance in terms of impacts on
human welfare, and use information about economic behavior to determine the value, while
• ' .
ecologists will emphasize the complexity of the question and seek to determine which
anthropogenic changes are likely to result in large-scale and irreversible changes. A central,
emerging issue in the discussion of ecological significance is the .question of whether it is
possible to operationalize system-level concepts such as ecosystem health and ecosystem
integrity as guides to policy. We believe that the concepts of health and integrity are best
understood as concepts in management and policy—their activist thrust implies that they will be
more than purely descriptive concepts. In this sense, they must have both scientific and
evaluative content. Advocates of this strategy seek to identify system-level, descriptive
characteristics that are associated with important social values. It is admitted that these
approaches will seem unpromising at first to mainstream welfare economists because there exist
at this time no accepted methods for relating changes in such descriptors with measurable
changes in individual welfare. As discussed in the next section, a "two-tier" decision process
that applies multiple decision rules according to categorizations of risk can include risks to
ecological health and integrity. .'
Fart IV: A Two-tier Decision Process/Model ,
We suggest that for a period of conceptual experimentation, we pursue not monistic but
pluralistic systems of value. A pluralistic system employs multiple decision rules, and may
keep accounts concerning one value in terms not aggregatable with accounts for other values.
As noted above, Callicott has criticized pluralistic systems of valuation on the grounds that
multiple criteria may be applied arbitrarily, but that criticism does not apply to the system of
value analysis suggested here, which we call "two tiered" (Page, 1977; 1991; Norton, 1991b;
1992b; Toman, 1992; 1994). Two-tiered systems of analysis apply multiple rules on the level at
which action is taken, but have also a second tier decision process in which problems are
categorized, and rules are applied according to some fneta-level criterion of appropriateness
given a systematic characterization of the decision context. These approaches can be considered
as "integrated pluralisms" or "contextual" in nature. In an early effort,'Page (1977) argued that '
24
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a materials policy should be judged by two criteria, an efficiency criterion and a conservation
criterion, and he applied his two rules according to a categorization.of problems as being intra-
generational or intergenerational in their impacts. There have also, been attemptsto integrate
multiple criteria for action according to temporal and spatial context (Norton and Ulanowicz,
1992; Norton, 1991b; 1992b; forthcoming a; Toman, 1994). .These approaches attempt to
formulate the question of which criterion to apply in a given problem situation by characterizing
situations in which a cost-benefit criterion is relevant, for example, and other situations where
we should apply the Safe Minimum Standard of Conservation criterion. This principle places a
/.burden of proof on those who would alter important ecosystem functions, in that it insists that
the resource be saved "provided the social costs are bearable" (Ciriacy-Wantrup, 1952 ;
Bishop, 1978; Bishop, 1979; Norton, ,1987; Toman, 1994). This rule requires those who f
would undertake a risk to a resource to show the costs of protecting it are unbearable before
undertaking the risk. Others have suggested a/Precautionary Principle, which instructs us to err
on the side of caution when there are risks of highly adverse outcomes and uncertainty is high
(Howafth, forthcoming). ( .
The two-tier conceptualization recognizes obligations that go beyond striving to
implement a wise investment policy. On this approach to environmental policy, an important
step is to categorize problems according to the type of risk involved Two-tier systems address '
questions of what to do in specific situations only after it has been decided what type of risk is
faced. This prior categorization decision determines which action criterion is applicable in •
specific situations. In effect, this conceptualization of the problem separates th^many
questions of what to do in specific situations from questions of what decision criterion to apply.
in this and similar situations, thereby submitting criteriological questions to open and explicit
debate. We believe that making these criteriological questions explicit would improve the
quality of current discussions of sustainability by causing a separation of the questions of
which criteria are applicable from questions of whether current policies are achieving results
according to various criteria. We emphatically do not want to suggest that criteriological
questions should be addressed independently of specific Valuation contexts, but rather mat the
questions should be formulated and discussed independently so that, for example, it will be
explicitly stated which evaluation methodology will be used in specific contexts. In the best of
r ' s '* i • ' ^ <
outcomes this practice would result in public attempts to evaluate and refine policy and the.
' ,' f . 1 .*"
creation of a laboratory for testing various evaluation systems and techniques.
. One viewpoint on the criteriological question might, of course, be that a welfare, cost-.
benefit.criterion should be applicable to every sustainability decision. Those who defend this
- 25
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criteriological position would include defenders of the mainstream approach to decision
making, so the two-tier model does not exclude a defense of presentist welfare economics as
the exclusive criterion for judging sustainability; that position is simply held up, along with
other criteriological options, for explicit decision and debate. An advantage of two-tier systems,
therefore, is that they can logically comprehend the cost-benefit, welfare approach to valuation
of policy options as one option among others, and encourage public discussion of what criteria
to apply in sustainability calculations and measures. A system of evaluation, like.the two-tier
system suggested here, which accepts the possibility of pluralistic criteria can therefore
encourage a.more adaptive,'experimental process, in which scientists, local communities, and
policy makers participate in an ongoing discussion of both what to do in specific situations and
• also of what criteria are appropriate in various situations. This expanded discussion, we hope,
will lead to a process of value articulation, criticism, and experimentation with multiple schemes
for valuing environmental goods. • ' ,,
The pluralistic approach combines well with the approach known as "adaptive '
management" (Rolling, 1978; Walters, 1986; Lee, 1993), which emphasizes.that, in situations
of high uncertainty, management plans.should be formulated so as to improve knowledge and
reduce uncertainty by approximation. Combining adaptive management with a pluralistic
approach to evaluation will encourage explicit discussion of the likely results of applying
various valuation criteria, and bring discussions of environmental valuation within the purview
of public discussion of environmental policy options and outcomes. And,, since it will
encourage successive returns to questions of what to value (as well as reconsiderations of
outcomes of various policy experiments), the two-tier approach encourages an iterative process
in the study of environmental values and policies. In this sense, adopting a two-tier model for
decision analysis reresents a step toward making valuation and valuation methods endogenous
to the process of articulating appropriate principles of environmental management This public,
iterative process must include participants from various .scientific and social scientific
disciplineslas well as the public and policy makers. In such a process, we expect that
contingent valuation studies may be one important tool-they can provide a reading of what the
public prefers against a backdrop of current options and knowledge. But if such studies are
followed by more intensive explorations such as task forces working on pilot management.
projects and interactions of scientists with the public, it might be' hoped that the two-tier process
will lead to increasing understanding of what the public "really" wants-what they want, that is,
after they have tangled with both the real-world frustrations of management and with explicit
discussions of differing conceptions of, and criteria for measuring, environmental values.
26
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' Pluralism in environmental values and valuation, as a heuristic hypothesis, .therefore,
can sharpen the learning curve regarding environmental valuadpn-both among members of the
public and within evaluative, social science disciplines. As noted above, however, the
hypothesis could be.proved false if, in the course of debate, the multiple criteria originally
proposed and applied turn out to correlate highly in their application with (for example) a
I \ ' *
standard welfare criterion .such as cost-benefit analysis. This "monistic" outcome would then.
be established by a self-correcting process of inquiry, rather than by initial assumption. Our
point here is not to prejudge the likelihood of such a reductionistic outcome but rather to argue
that, whatever the outcome of such a re-iterative process undertaken under plurali stic
assumptions, the process itself is likely to improve interdisciplinary communication regarding .
the evaluation of environmental goods and policies. - .
We can now return to the approach, noted just above, that attempts to use science to
specify features (integrity/ihealth) of ecological systems that must be protected (even if changes
1 • • - " * ',' • ' . .
in these features cannot be directly associated with negative impacts on.individual welfare levels
in the future). !t is now possible to combine the idea of an intergenerational trust or an organic,
communitarian commitment with the health/integrity approach, arguing that we owe to the
future protection' of productive processes embodied in large-scale ecological systems, because ,
these processes will provide many options to future generations to fulfill their wants,.whatever
their, wants turn out to be. One way "of understanding this notion is to think of protection of '
important ecological processes as the protection of natural capital construed as "ecological
production functions" that might be analogized to what John Rawls (1971) calls "primary
goods". Primarygoods are things that every rational person is assumed to want. Production
of natural resources is similarly considered good, despite difficulties in determining what future
individuals will specifically want^ because these resources .can be expeced to be useful whatever
.rational plan for life individuals have. ,..-..-
This.approach assumes that there are certain ecological and physical characteristics of
. whole ecosystems that are necessary conditions of future productivity, and attempts to pinpoint
x ' " • . i
those processes that cannot be sacrificed if options for the future are to be protected. There
have been attempts to define ecological integrity and health in an operational and measurable
manner (Karf, 1981; 1991 ;-Schaeffer and Qox, 1992; Rapport, 1992; Costanza, Norton, and
Haskell. 1992) But these attempts, in turn, apparently require a departure from many
economists' commitment'to value neutrality (Norton, 1991a; 1994b), so attempts to define
these terms as descriptive/normative guides remain controversial. Interpretations of integrity
and health have varied considerably. On one view. (Callicott, 1989; Westra, 1994) references to
27
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integrity imply a commitment to the human-independent (intrinsic) value of ecological
communities. But it has not been made clear what operational consequences would follow
from such a commitment (See discussion of intrinsic value theories in note 20, above). '
A second suggestion, by David Ehrenfeld (1992), is that these concepts should have
limited theoretical, ecological content, but that they should embody the general goals and values
of a community more than identifiable and measurable characteristics of physical systems.
Above we expressed a similar point by claiming that health and integrity are better understood
as terms in public policy discourse rather than as scientific terms. But this understanding does
not resolve how the values of a community are to be identified (see Page, 1992), returning us
once again to the division between economists and ecologists. There have also been attempts to
f : ' . ' i • • • J
use the terms as links or bridge concepts between scientific and evaluative discourse (Edwards
and Regier, 1990; Rapport, 1994; Uianowicz, 1992; Norton, 199la). In these approaches,
some very general features of .ecological theory, such as the theory of space-time relationships
of hierarchy theory, are embodied in the basic modelling assumptions for defining ecological .
integrity and health. .These theoretical commitments have the purpose of making scale-
sensitivity integral to the models. But once more, there is the need to identify values as well as
ecosystem traits. ' , : •- . . ' ' .
Norton and Uianowicz (1992) have experimented with embodying'social values and
perspectives into scalar representations of physical systems by associating social values (such
as biodiversity protection) with particular levels of landscape functioning. On this view, to
understand an ecological function or process as sustaining certain ecosystem characteristics
(such as productivity or diversity) is to value them. These scientific/normative theories can be
thought of, ethically, on analogy, to tnist funds (Weiss, 1989; Brown, 1994), with each
generation serving as the agent for future generations. Weiss argues that such an analogy has
precedent in international law. But since the agents in any generation must use resources as
well as preserve them for the future, this approach can only be applied if there is some criterion
f • •
to separate intergenerationally significant changes that will harm future generations from benign
use of resources. These approaches therefore face a dilemma: either they must solve the
identity problem—identifying future wants and needs that must be provided for by present
protection efforts, or they must provide some other way (independent of welfare effects on
future individuals) of sorting ecological processes into essential and nonessential categories.
The key pointj'here, is that^ if ecosystem integrity and ecosystem health are to function
in a decision procedure based on an intergenerational trust owed not to human individuals but to
some other entity such as generations or societies, they can bypass the identity problem
.28"
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-P-.
provided they can specify which physical features'of ecological systems and communities
represent processes essential to maintaining "health" of "integrity", however defined. This task
can then be associated with the effort to identify keystone species and keystone processes as at
• • • ' - - • v. ' '
least the beginnings of an operationalization of "essential ecosystem processes". .
- This approach, which patches together several ideas, drawn from ecology, '
communitarian ethics, international law, and the religious idea of stewardship, may therefore
stand as an Alternative Grand- Simplification. Economists will be quick (as well they should
s be) to note the largeness of the "ifs* associated with this approach, and also to note the • ;
tremendous uncertainties that would obtain if we were to attempt to employ it in decision
making. In particular, this approach must somehow identify^ "essential" processes in terms
other than effects on human welfare. But its defenders can, in reply, note also that any system
chosen to account for ihtergenerational obligations-including economic and other versions .of
the Grand Simplification—likewise rests on assumptions and involves tremendous uncertainty,
especially in judging multi-generational1 impacts of proposed policies. „
V. Conclusion, .
While we have come together today to explore broad theoretical issues, there is also a .
practical urgency to our discussions because it is clear that the environment cannot wait for final
resolution of ethical, conceptual, and value problems first raised by the ancient Greeks, and
resistant to final-solution since. Action at the Environmental Protection Agency can and must
go on; action is forced. Besides addressing theoretical and philosophical issues, we hope ' .
.subsequent speakers will explore whether there is a way through the divergent value theories
catalogued here to a practical solution of the problem of valuation. This.questiqn can be '
restated: is there a general approach to environmental valuation that can be accepted as useful in
. ' ' -
policy formation, even while recognizing that disagreement will continue regarding many
important practical problems of measuring what is truly valued and theoretical questions about
what is truly valuable? The practical task is formidable. We suggest that the two-tiered system ;
outlined might prove a useful beginning point for finding a more unified and interdisciplinary
approach to decision making. . \\ • " ,, '
- "In this paper we have,emphasized the interdisciplinary problems, and also -
opportunities, entailed by the differing understandings of economists and ecologisi:s of the
concepts of reversibility and substitutability. Along the way we have stated some of the
philosophical issues separating advocates of differing approaches to environmental valuation. •
We have also emphasized the interrelatedness of these issues arid questioned whether any single
discipline has all of the answers to the problems of evaluating anthropogenic changes in natural
29
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systems. Perhaps our greatest asset in the search for more sustainable environmental'policies is
the inherent interest of the theoretical and philosophical questions involved. We hope that this
, \ •• ~ ' • • v '
- colloquium will stimulate both intra- and inter-disciplinary research and discussion on,these
important intellectual problems and on their applications in specifying sustainable policies.
.'
[end of text] .."'•, , . < • ; .
30-
3 i
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APPENDIX A: ECONOMIC THEORIES OF RESOURCE USE,
ECONOMIC GROWTH, AND INTERGENERATIONAL EQUITY**'
From the mid-1970s through the early 1980s, a substantial literature developed that
addressed (i) the nature of optimal economic growth paths! according to the utilitarian
present-value criterion, with depletable resources; (ii) the feasibility of .sustained or growing.
per-capita consumption paths, whether such paths are present-value-maximizing or the result of
an intergenerational fairness rule; and (iii) the means through which such consumption paths
might be achieved in practice. The term sustainabiliry is rarely invoked in these earlier papers,
but it is clear that the literature bears directly on the issues raised in the previous section.
Almost all of the papers under consideration here are based on extensions of the basic
oneTsector model of growth in which a depletable resource also is an input to production (along
with labor and capital services).24 The models fall into the representative agent category', with a
central planner seeking to maximize the present value of a utility function whose argument is
per-capita consumption. To avoid terminological confusion, we will refer to outcomes under
the present-value criterion as PV-optimal to distinguish them from optimal outcomes under
other social welfare criteria or outcomes that simply are Pareto-efficient. .Consistent with the
standard approach in growth theory, aggregate production technology in the .studies being .
considered is assumed to be neoclassical with constant returns to scale; many results depend on
the further assumption that technology is CESi • : -
The three papers by Dasgupta and Heal (1974), Solow (1974), and Stiglitz (1974)
exemplify the contribution of this"literature. Taken together, these papers detiver'a number of
i - .'• • \
conclusions. To present these conclusions, some notation is helpful. Let d denote a positive
but constant rate of social time preference in the planner's objective function. Let r>0 denote
the asymptotic marginal product of capital as depletable resource use falls to zero and the
capital-resource ratio increases without bound. Let n denote a constant exponential rate of
population growth; and let m denote a constant exponential rate of technical progress (described
more precisely below). Both w and/i could be zero or positive. Finally, let s denote the ,
elasticity of substitution between capital services and the resource. ',
Using this notation, we can draw the following conclusions from the three papers cited
23"The discussion in this appendix borrows heavily from Toman, Pez'zey, .and
krautkraemer(1994)/ ... l . • . !'
* • • '' * **
24Some of the models generalize technology to consider multiple capital services.
•"•" '•'.-..' •.•"'"• . 31 '• . • ' . ' • -' ' '
-------
in. the previous paragraph, at least with CES production: (1) If m = 0, then constant or growing
consumption over time along a PV-optimal path occurs if and only if r>d+n. (2) However, it is
feasible to have constant or increasing consumption and utility across generations if s>l or 5=1,
i.e., if capital services are sufficiently substitutable for the depletable resource. If s> 1 the result
holds since output is possible even without the resource. If 5=1 (a Cobb-Douglas technology),
it must also be the case that n = 0 and that the share of total output going to capital must exceed
the share of output going to the resource.25 (3) Ever-increasing technical progress can, in
theory, substantially alleviate resource constraints. For example, Stiglitz (1974) shows in the
Cobb-Douglas case that sustained growth in per-capita consumption and.thus utility can be
feasible or even PV-optimal with growing population provided mJc is sufficiently large, where
c = income share of the resource and m is the rate of factor-neutral progress. Intuitively, this
follows from the iact that with Cobb-Douglas production, mlc can be thought of as the rate of
resource-augmenting technical change.26 Stiglitz does not examine the case where s< I, but
sustained consumption and utility also are possible in this case if the rate of
resource-augmenting progress is high enough. This leaves open the question of whether it is
realistic to make such a conception of progress that squeezes a constant flow of final
i -. - •
consumption services but of an ever-shrinking flow of resource service inputs.27
Thus, consumption and .utility along a PV-optimal path will be harshly
intergenerationally inequitable if technical progress and the marginal productivity of capital are
.limited. Even the feasibility of sustained consumption requires a minimum degree of technical ~
progress or factor substitutability. These conditions are sobering when one recalls theimaterials
balance objections to CES production specifications with elasticity of substitution greater than
or equal than one noted previously: If s< 1 then the average product of the resource is
uniformly bounded and cumulative total output of the economy over the whole planning
horizon is bounded by the product of the mayimal average product of the resource and the initial
25There is an upper bound on the size of the consumption flow that can be sustained in this
case.
2611 certainly is open to question in the case of energy inputs since there clearly are /
thermodynamic limits to energy efficiency. ...
27A similar issue arises in connection with the recent paper by van Geldrop and Withagen
(1993), in which the authors assume any damages to natural capital can be offset by renewal or
compensator)'investments. ' - - '• .
.••',..'•• '32 ' ' • '
-------
^resource stock. Clearly sustained consumption and utility are impossible in this case in the -
- \ •
absence,of technical progress.-8 Sustained consumption and utility are possible with a
• renewable backstop resource, though with a bounded average product of the resource the level
of sustainable final consumption will be bounded above by a number that reflects the maximum
sustainable flow of renewable resource services. * , . .
. , ' Recently interest in growth theory has been renewed by extensions of the standard
• model to include features referred to collectively as "endogenous growth" influences.'''
Prominent examples include accumulations of human capital or investments in infrastructure
that in some way provide increasing returns, so, that such activities can cause acceleration in the
expansion of economic activity (Romer 1986, 1990, Lucas 1988, Barro 1990, Grossman and '
Helpman 1992). Endogenous growth1 models also are finding their way into the resources and
environment literature, though such applications are still at a fairly early stage and relatively
little literature is published yet (for a recent review see Gastaldo and Ragot 1994). ' •)
It would be fairly straightforward in principle to introduce endogenous growth factors
into the DasguptaVHeal/Solow/Stiglitz framework discussed in this section. Such factors would
provide yet another channel in which resource-based limits to growth could be overcome in the
' ' ' i - * * '
theory. However, our earlier comments about the basic growth-with-resources model also
apply to such extensions: if one assumes from the start that there^are such substitution
possibilities, the,growth paths derived from thetheory will be consistent with those .. .
assumptions. ^This leaves open the question of whether the indicated assumptions about
substitution are appropriate.
. Models of resource-capital tradeoffs have been used to study a question of special .
policy interest: given that a society wants a sustainable consumption path over time while
depleting its stock of nonrenewable resources, how rapid should investment in (human-made)
i • ' * . , - -
capital be? An empirical aspect of this question is how national income accounting data can be
used to evaluate the sustainability effects of different investment plans. , .
. , Hartwick (1977) shows that in a simple model with Cobb-Douglastechno[ogy,.constant
population, and a larger share of national output going to pay for the services of nondepreciable
* t • ' ' '
capita] than for depletable resources, providing that it is feasible always to invest exactly the
Hotelling scarcity rents from the depletable resource, then such investment results in constant
consumption over time. This investment regime is now known as Hartwick's Rule. Three
qualifications immediately apply, however. First, the precise form of the Rule will vary in
28While sustained consumption is feasible with 5=1 it is not optimal, since r=0 in this case.
'•': ''.•'• ' • ' 33 '••',: • . '- V '
-------
more general economies, as shown bjrHartwick (1978), Dixit, Hammond and Hoel (1980) and
/ '
Dasgupta and Mitra (1983), among others. Second, the Rule is generally satisfied only when a
continuous policy incentive is deliberately created; for example, along a PV-optimal path, it will
* x , . " '• .
hot generally be true. Third, although Solow (1974) shows that a constant-consumption path is
feasible for a Cobb-Douglas economy provided initial consumption and resource extraction, are
not too high, the feasibility of Hartwick's Rule is riot generally guaranteed. In particular, it.
might lead to exhaustion of the resource stock in finite time, in which case consumption could
not be maintained. ; .
Hartwick's Rule has been advocated as a prescription for sustainability, not just a
condition of it, by several authors, notably Solow (1986) and Maler (1991). In particular, it is
argued that following Hartwick's Rule will maintain the value of total national wealth (natural
and human-made) constant when appropriate shadow prices are used for valuation; and that the
sustained consumption in this case can be seen as equal to net national product at these shadow
prices, given zero aggregate value of investment under Hartwick's Rule. ,
There arej however, at least two objections to this use of Hartwick's Rule as
prescription, not just characterization. The first is the problem of feasibility already noted
Second, and more troubling, is that Asheim (1994) and Pezzey (1994) have independently
shown that an economy in which current investment exceeds the level of resource rent is not
necessarily able to sustain its current level of utility by following Hartwick's Rule (that is,
* setting investment equal to resource rent) from now onwards. Both authors offer the1
counterexample that during a certain finite period on the PV-optimal development path of a
Cobb- Douglas economy with a large initial resource endowment relative to capital, investment
exceeds the resource rent, and.yet the maximum sustainable level of consumption starting from
any time during that period is well below the current PV-optimal consumption level. The
intuitive explanation is that the PV-optimal path is depleting the resource stock too fast for
sustainability, causing the current resource price and hence the rent to be low relative to the
sustainable outcome, so that even full investment of such rent will not ensure enough capital
formation for sustainability. .
The studies by Asheim andPezzey point out an inherent flaw in using prices estimated
under unsustainable conditions (even if, as in these studies, standard environmental
'externalities are assumed to have been fully taken into account). This poses a problem for
estimating empirical measures of sustainable national income. Only by measuring resource
rents using'shadow .prices which reflect the sustainabilitv constraint (including the constraint of
the remaining levels of resource stocks), will Hartwick's Rule provide a correct guide to
34
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sustainability, indicating for example the unsustainability of the PV-optimal path discussed
above. But estimating these shadow prices is even harder, and.subject to'greater uncertainty
i * •
(eJg., regarding future resource discoveries and technical change), than any of the existing
.empirical efforts in resource accounting.29 . • :
A second important strand of economics .literature relevant to sustainability concerns the
preservation of natural capital, given that natural capital provides valuable services in preserved
states as well as extracted resource inputs. The papers reviewed in the next few paragraphs
seek to identify conditions under which at least partial preservation is part of a PV-optirnal or a
maxi-min program. The level of preservation is endogenous and may be large or small:
. ^ A simple way to capture the value of preserved environments in a growth model with a
honrenewable resource is to include the resource stock in the utility function. This is '•'.'.
appropriate if the provision of "amenity" services for preserved environments is positively
related to. the stock of preserved natural environments, and if the stock of natural environments
declines with the extraction of naturaTresources. In this framework, there is preservation
asymptotically if and only if the resource is not completely exhausted. This framework was •
introduced as early as 1973 by Vousden, developed extensively by Krautkraemer (1982,1985,
1986, ,1988), and has been used by many other authors (see, e.g., Barrett 1992). "
Using this framework, whether or not it is desirable to consume all of the resource
stock along a PV-optimal path depends upon the rate of discount relative to the marginal rate of
substitution between consumption and amenity services. Sincethe latter depends upon what
happens to the marginal utility of consumption as resource extraction goes to zero, the . • •,
•" " *"•-."-.
PV-optimality of permanent preservation depends in turn upon what happens to consumption as
resource extraction goes to zero. If resource extraction is essential in producing the
consumption good and the marginal utility of consumption becomes infinite as consumption use
goes to zero; then it is PV-optimal to consume all of the resource stock. If there are alternative -
sources of the consumption good, then it may be desirable to permanently preserve some of the
resource stock along a PV-optimal path. -
.; " Technological progress and capital-resource substitution are two ways in which an.
economy might maintain consumption in the presence of an essential nonrenewable resource;
. Krautkraemer (1985). shows that if the society's initial capital stock is large enough and capital
29Hartwick's Rule must also be modified when the substitutability of resources and capital
assumed in the Hartwick analysis does not-hold. As discussed-by El-Serafy (1989)-and von
Amsberg (1992), when natural capital is singled out for preservation more stringent investment
requirements must be met. ; . • • • '•
'•••''.- • ' :'••" 35 ...- ••;..•' - . ..
-------
is sufficiently productive and substitutable for the depletable/esource, some permanent -
preservation is desirable along a PV-optimal path. Under these conditions sustained :
consumption growth and preservation are not incompatible. The proof of this proposition
assumes a CES production function with elasticity substitution greater than one, which has
problematic material-balance implications as noted previously. The prospects for permanent
preservation of natural environments along a PV-optimal path are enhanced if there is an upper
bound on both the marginal value of the consumption outpufand the marginal productivity of
the depletable resource input This occurs if there is an alternative source of either consumption
or resource input Renewable resources and backstop technologies are ways in which a
• • "• f • '
positive flow of consumption can be maintained without a perpetually increasing marginal
.product of the resource. However, there can be multiple steady-states depending upon the
initial point It is possible that a capital-rich economy would move to a steady-state with a
positive resource stock while a capital-poor economy would exhaust both its capital and
resource stocks (Krautkraemer 1982). -
V > '
The rate of discount plays acritical role:in these determinations, in particularsince it
determines the asymptotic rate of growth of the economy (Dasgupta and Heal 1974). It is
possible that a high rate of discount will bring about exhaustion of resource stocks, '
deterioration of the environment, and the steady decline of the economy along a PV-optimal
path even when it is technologically feasible to sustain both the level of consumption and the
quality of the environment (Krautkraemer 1985, Pezzey 1989). The discount rate can affect the
. mix of assets, as well as the size of the bequest to the future, so it is possible that a lower rate
7
of discount will result in a more rapid depletion of some environmental and natural resource
assets (Farzin 1984, Krautkraemer 1988). - * ' : . '
Pollution and environmental assets'also have been incorporated in a number of studies ,
on P.V-optimaI and maximin growth (Keeler, Spence and Zeckhauser 1972, Plourde 1972,
d'Arge and Kogiku 1973, Forster 1973, Asako 1980, Becker 1982, Heal 1982, Tahvonen and
\-Kuuluvainen 1993). Pollution can enter the model in a variety, of ways - as a stock (level of
ambient quality), or as a flow (rate of emission). It can be a by-product of consumption and/or
production and it can be an argument of either the production function, the utility function or
"', i ' • .
both. Pollution can be controlled through the choice of production processes or through the
allocation of resources to the clean-up of effluents (see Klaassen and Opschoor 1991 for further
- discussion).
Because of the diversity of modeling possibilities, the literature has produced a wide
. variety of sometimes disparate results. In most cases (e.g., Forster 1973), the economy
, '• . . -v -, .
3.6
-------
following a PV-optimal path approaches a steady-state equilibrium in which the marginal value
•of consumption is equal to the marginal cost of'production, including the environmental cost of
pollution. In models which include both a pollution stock and a capital stock, there can be more
than one PV-optimalsteadyrstate equilibrium (Heal 1982). The PV-optimal steady-state levels
' •''„' x • _-
of-pollution.and consumption may depend upon the initial position of the economy. A ;
capital-rich economy may move towards a relatively clean steady-state environment while a less
endowed economy may choose to pursue a lower level of abatement activity in order to allocate
i • • ,
capital to the production of consumption goods. However, if the available technology allows
sufficient capacity to substitute capital-intensive but lower-emission techniques as pollution
accumulates, a unique PV-optimal steady-state will exist (f ahvonen and Kuuluvainen 1993)
i .'•,''' . • • ".....
, and the rich-poor dichotomy described above is avoided.30 Again, a high degree of
substitutability is an important assumption in obtaining these positive results.
A relatively recent development in the literature is modeling that explicitly incorporates •' -
some kind of sustainability constraint in social preferences. Pezzey (1989,1994) and Asheim
(1988) analyze variants of the representative agent growth-and-resources model subject to the'
condition that utility be nondecreasing over time. Such outcomes are feasible if substitution of
capital for depletable resources is easy enough, as already noted. Even if nondeclining utility is
feasible, however, it is not so easily achieved through policy. Pezzey shows that "standard'1
environmental externality internalization policies are inadequate, which is not surprising since
the nondeclining utility constraint involves a different spillover than environmental externalities.
He also shows that neither a resource extraction tax nor a conservation subsidy can induce a
nondeclining utility path, and that a consumption,tax that declines over time can.do so but only
if it approaches a. 100 percent subsidy.
Another contribution to the subject is the work of Howarth and Norgaard (Howarth and
Norgaard 1990, Howarth 1991a and 1991b, Howarth, 1992; Howarth and Norgaard 1992 and
and Norgaard 1993) using overlapping generations models. They show that a rhaximin
outcome can be achieved through efficient intertemporal exchange, provided future generations
SOThe potential Variation in dynamic models increases dramatically when both ah '
exhaustible resource and an environmental asset are incorporated m the model. .As one might
expect, a resource-environmental quality model generates pessimistic results unless more attractive
features, such as a backstop technology, recycling^ or capital or renewable resource: substitutions
are'also included. d'Arge and Kogiku (1973) examine a model in which a nonrenewable resource
is used in production and pollution is a b'y-product. of production. In this model, the economy is
unable to sustain itself permanently, even with recycling. More optimistic.results are obtained
when capital accumulation is included in the model (Asako 1980). •
•"''*•'• • '••".• 37 . ' : • '•• '':"
-------
are treated by the current generation as having some right to the current endowment of capital
including natural resources. How such a savings policy is engineered in practice is unclear,
however. Moreover, as the number of generations in the analysis increases, it is possible that
the ultimate intertemporal allocation becomes less sensitive to the initial wealth endowment,
indicating the need for an explicit policy of preservation rather than just income distribution to
achieve a sustainability goal (Randall and Farmer 1993). •..''. ••
' •' v ' , , ' ,
[end of Appendix A] ' . . . -
38
-------
Appendix B: The Endogeneity of Preferencessi !'. "
How do we come to have the preferences we have? Is this an important question, in
understanding and evaluating environmental policies (Common arid Perrings. 1992; Norton,
forthcoming b)? There is also the question of what values we "should" have: What are we to :'
make of some environmentalists' claim, for example, that people in industrial societies should
prefer less consumption?^ Should members of an evolving culture care what will be the
preferences of future generation's? Do we have a stake/in passing on an attitude of reverence for
wilderness as a cultural value? . ' ,
Economists have often dismissed these questions as uninteresting or even misguided
(see, for example, Solow, 1993). In this Appendix we show that disciplanary differences in the
treatment of how, why, and whether preferences change are at least partially based on a crucial
ambiguity. This ambiguity, which must be clarified before substantive interdisciplinary.
disagreements can be effectively addressed, arises at the intellectual junctures of three issues--
• ' • *• '
moral monism versus moral pluralism, the interpretation of consumer sovereignty in
econoniics, and whether the formation;and reformation of preferences should be endogenous to
the process of analysis of environmental values. " i' • .'
. In Part III above we noted that the abstract question'of moral monism—the view that all
moral quandaries must be^adjudicated by a single principle-is an important consideration in the
development of a general theory of environmental values and valuation. In fact that: abstract
" . i ' i •'',•" ' . '
issue affects a crucial methodological problem in the foundations of environmental economics .
-* l , i " ' ' ' '
• and management. This complex question can be given, at least initially, a simple-formulation in
the present context: Do consumer preferences, as usually measured in economic data and
analyses, provide a comprehensive accounting basis for all environmental values? A positive
answer to this question would represent a monistic viewpoint. A negative answer would
31-This Appendix draws heavily upon Norton (1991 c; 1994b, which provide a more
detailed treatment of the arguments summarized here., . " . , ' :
- • ' -'•(.,
' 32it is interesting .that these differences between economists and ecologists in attitudes
regarding values and valuation is in a sense parallel to the.above-described (Part II, above)
" interdisciplinary problems regarding irreversibility. Both sets of problems go to the heart of one of
'Western culture's thorniest problems, that of stability, change, and dynamism. Turning to -^
questions of values, we once again encounter the problem of dynamism—only this time in the guise
of a puzzle about the "becoming" of values. Just as ecologists find economists' models lacking in a
dynamic, intertemporal aspect—the "becoming" as well as the "being" of dynamic ecological
structures and processes—social scientists wonder whether equilibrium models of economists can
capture the dynamic of personal and cultural value formation and change. . , t
' - • ' 39 . : '' '" ' - . ' --'
-------
apparently favor pluralism, which applies a variety of approaches for the characterization and
measurement of environmental values.33 ... J.
Economists, who understand their welfare calculations as representing "consumer
preferences"; have generally interpreted individual preferences as "sovereign", adopting the
methodological commitment that expressed preferences of individual consumers are to be taken
as "given—individual choices, that is, are taken as an unquestioned indicator of individual
welfare.3* The apparent unanimity with which economists endorse this methodological
principle only highlights a crucial ambiguity, however. Does endorsement of the sovereignty
of preferences mean (a) that the formation and re-formation of preferences is exogenous to
33Among the considerations thought to favor a monistic ethicaltheory, we can mentibn
three. First, monistic theories are considered theoretically elegant Second, monistic theories are
claimed to be less likely to result in irresoluble problems and relativistic manipulation that might
occur if we try to apply multiple criteria of morality (Callicott, 1990). Third, monistic theories are
more likely to allow aggregation and comparability of data across many categories of moral goods.
Notice that either a deontological theory or a utilitarian theory might fulfill these promises.
Utilitarians treat all moral goods as expressible in terms of individual interests or welfare, and
aggregate within generations and compare opportunities for welfare across generations. Rights
theorists have favored some conceptualization of an intergenerational trust, with each generation
being trustees charged to protect the rights—at least the basic rights-of future generations,
balancing these rights against the rights of present people (Weiss, 1989; Peter Brown, 1994). In
both cases, a single currency, either interests/preferences or rights, applies across the board. And,
in both cases, the formulation chosen encourages a general approach to determining priorities.
. Priorities in the utilitarian system are arrived at by computation—the policy that maximizes
aggregated individual welfare is given priority; in deontology, priority is placed on obligations to
respect basic rights. In either case, concern for the present and concern for the future is expressed
in similar terminology. So, there is considerable agreement, in principle, that a monistic system of.
characterizing moral "goods" and "bads" would advance pur ability to make rational judgments.
Despite the cosiderations in favor of moral monism, pluralism has also been defended
(Stone, 1987; Midgley, 1983; Norton, 1991b). In particular while monism may be a reasonable,
long-term goal, more progress in ethics (especially in applied ethics, empirical psychology and in'
empirical economics) will be achieved if one begins with multiple values understood in particular
situations and works toward theoretical unity,' rather than adopting monism by fiat and then
ignoring values not yet brought under the rubric of the favored monistic principle (Norton, 1991).
' V v' ' '
34Mainstream neoclassical economists are heirs to the utilitarian tradition in ethics, which ,
traces from Jeremy Bentham and James Mill and which defines the good as the greatest happiness
: for the greatest number. Bentham (1780) explicitly argued that each individual should be the judge'
of what is good for that individual. John Stuart Mill, a second generation utilitarian, however did
hot follow Bentham in counting all experiences of happiness at face value, arguing that there are.
"higher" and "lower" pleasures and that the former should count more highly in our calculus than
the lower (Mill, 1863). And thus the contemporary economists' decision to take preferences as,
: givens represents a theoretical choice that might to some represent a special and controversial
, commitment to a specific form of utilitarian theory (Sagoff, 1986). .
,, :• ' . . - 40 . '...'•''•
-------
' economic analysis, and hence that these subjects are in the, purview of some other social science
or the humanities? Or does it mean (b) that consumer sovereignty should hold for all social
sciences, that the formation of preferences is exogenous to all scientific understanding and
analysis, and hence that questions of preference formation and reformation are not worthy of
scientific study at ali? This question of interpretation connects with the abstract issue of
monism in environmental valuation: interpretation (b), but not (a), results in a version of
monism—the only values considered or counted are values that can be expressed as economic
behaviors of consumers who are maximizing their welfare, and as analysed within a utilitarian
analysis of human welfare. This ambiguity is crucial in considering the contributions of
ecplogists and economists to value discussions.
f • i ' •''""!-''• ' "
Interpretation (a) can be justified simply on the basis of "comparative advantage" in
disciplinary specialization (See, for example, Silberberg, 1978). On this view, consumer
sovereignty represents a choice by economists, based on their skills and.training in
mathematical modelling, to accept preferences as given and to concentrate on aggregation of
preferences as their distinctive'contribution tothe larger task of understanding environmental
valuation. Interpretation (a) of consumer sovereignty is therefore consistent with, even
supportive of, an interdisciplinary approach to .understanding environmental policy evaluation '
and implementation. Economists, social psychologists, anthropologists, and environmental'
ethicists would on .this, view be treated as allies in an interdisciplinary discussion. On this
inclusiyist view of environmental valuation, pluralism would be encouraged; the insights of
disciplines such as anthropology, which-might be expressed in communitarian terms, will not
have to be translated into individual consumer preferences to be considered in a discussion of
. t . ' i, ' •
values of environmental protection.35 '*, '", ,
But interpretation (b) of consumer sovereignty would favor an exclusivist approach, as
expressed for example by Stigler and Becker (1977), who declare that all values are simply a
• matter of taste, and that the study of values, if not reducible to quantifiable behavioral variables
• • • r . ' " " . • '
•• of economic preferences, are not worth studying at all, by any discipline. Stigler and Becker
1 ' • • . • ' i
suggest that we interpret preferences as fixed and they conclude that, since value changes
; cannot be understood within economic models, they are beyond rational analysis altogether.
By assuming the npnrationality of value discussions, Stigler and Becker commit themselves to
the moral theory of emotivism, which is today generally discredited by moral philosophers.
, , 35$ee Daly and Cobb (1989) for an extended discussion of the ways in which concern for
communal values requires relaxation of some of the individualistic assumptions of mainstream •
.welfare economics.'- ••-'*..' -
. " • ;' . • .. 41 • ' '"''•. ';•'•'.'.
,
-------
Emotivism, popular among logical positivists during the 1930s and 1940s, relegated moral
statements to the expression of individual feelings, and declared that moral discourse has only
"emotive" and no rational content. Most writers on ethical systems today have agreed that,.
emotivism, while perhaps sensitizing us to special logical features of prescriptive uses of
language, misses most'of what is important and productive in moral discourse. What is
interesting for our purposes is that consumer sovereignty entails moral monism and an
' '
exclusivist attitude to environmental values only on this stronger and highly, questionable
viewpoint in moral theory. It is only according to this positivistically based rejection of the
study of values (other than the study of values as measurable behaviors) that a monistic and
exclusionary attitude is taken toward environmental valuation. If consumer sovereignty is
understood as a choice to set interdisciplinary boundaries between economics and other social
sciences on the basis of comparative methodological advantage, there is no implication that all
moral values important to the environment are all reflected in a fixed set of consumer
preferences. ' , ' .
If it is admitted, in keeping with the narrower interpretation (a), that there may be
broader, noneconornic treatments of value and that these treatments might be suitable to study
the formation and reformation of environmental values, then this broader discourse might
provide a more inclusive language of evaluation for discussing environmental policies. Welfare
impacts of environmental policies would then be considered to be one important source of data
in policy evaluation. Other data—such as descriptions of physical changes in the structure and
function of ecological communities and their impacts on difficult-to-quantify social values--
would also be important information. The two-tier system outlined in Part IV, above, provides
the outline of such a pluralistic, comprehensive, and inclusivist system. ',
This broader approach to valuation suggested here need not question the importance of
cost-benefit studies in evaluating policies. These studies provide "snapshots" of behavioral
* , " '
tendencies—reasonably "hard" evidence about the public's preferences, assuming the current
legal and economic situation, and assuming the current level of understanding of environmental
problems and opportunities. Such studies are essential to determine where the public stands—at
a given time and at given levels of knowledge and awareness. But it would be surprising if
snapshots of current preference patterns in the population, modelled as givens within an
equilibrium system of analysis, were to provide much insight into the dynamic by which
_ \ • . _ .,/.., , .
persons and cultural groups form and re-evaluate their values and goals.
Practically, this issue is important because active environmentalists, and many i ?
ecolpgists, would argue against economists (such as Solow, 1993) who believe that the
42- ,
-------
preference set held by the future is "none of our business." Environmentalists are, for better or
worse, moralists in the sense that they are committed to shaping social values—they see it as an
obligation of the present to protect wilderness and other features of the environment and also to .
articulate and inculcate in their children and their children's children a positive value
commitment to protect wild places for their spirituaTand cultural value (Sagoff, 1974; Sax, ;
1980; Norton, 1987; 1991c). Environmentalists' crusade against consumerist attitudes is often
noted in this connection. Because economists take individual preferences as sovereign and
given, they are discinclined to find these questions, which concern how to change and improve
preference sets, interesting. Pluralistic approaches to management, on the other hand,
encourage a broad inquiry into what should be done to protect the environment, and might, for
- example, include a major commitment to "environmental education" as an important part of the
academic and.policy communities' involvement in developing environmental goals and
objectives. In practice, an active approach to questions of value.articulation and reformation in
the face of new information and evidence has expressed itself in-the best of "ecosystem
management plans" which involve social and natural scientists, humanists, and local. >
communities and their citizens in an ongoing process of study and evaluation of environmental
goals. Similarly, community efforts to evaluate and rate risks, which'involve community
• . • " ' ' '\ • ' .
participation and risk communication exercises—can also encourage a dynamic, interactive; and
iterative search for community values and environmental goals. •• ' '
s . ' **
If me study of environmental values is to be expanded, to become more dynamic and .
more involved in practical efforts to articulate and correct directions of environmental policy, a
more pluralistic approach to characterizing and measuring values will be necessary at least for
the time being. The economists' account of preferences held need to be supplemented with,
and integrated into, a broader evaluative vocabulary and framework, one that will draw on other
social sciences, natural history, and the humanities. This broader discourse will.be the locus of
the meta-level determination of which criteria are applicable in given situations. Community ,
involvement in these situations would include use of pilot projects, public forums, and other
methods to improve communication and understanding of environmental problems through an
ongoing, iterative process. Since many public concerns for protection of ecological processes
* . • .<'..'.,. >
and states are difficult to correlate with changes in welfare, it will also be necessary to use a
, •» . • ' ' ; ^
variety of physical measures to guide policy.36 ,. • . \ '
36See -Karr (1981) for a discussion of the Index of Biological Indicators as an example oY
such physical measures, ' • , •".,,'. ' .'
' "'. . ' '- ."•-'. 43 •' ' . ' ' "...
-------
As argued in Part IV, above, this methodological pluralism will have at least heuristic
advantages. Starting with multiple evaluative methods and criteria, and addressing their ' -
usefulness and efficacy in particular situations, could eventually lead bade to a reductionistic
approach, but only on the achievement of empirically demonstrable correlations of welfare
measures with physical standards designed to track socially desired goals (such as Karr's
(1981) Index of Biological Indicators. Conceptual reductions would then represent actual
theoretical and conceptual advances won through creative hypothesis formation and innovative
empirical empirical studies. Heuristic pluralism, as embodied in a two-tier system of analysis
of environmental values, is therefore recommended as the basis for a more comprehensive
study of the goals of environmental management in a free society. , . . ,
If there is a consensus supprting this inclusionary intellectual assumption—and we hope
to hear some discussion of whether such a consensus exists across the disciplines represented
here-then we face in the accounting problem mainly a question of how best to divide the
intellectual labor among disciplines.37 If there is no such .consensus, we may have uncovered
an important substantive and theoretical issue ceserving of interdisciplinary attention. We urge
that all speakers address whether the overall process of environmental valuation should
question or simply accept consumer preferences. We think the following is the clearest and
least tendentious form of this difficult question: Should questions of the formation of
preferences and the evaluation of preferences be exogenous or endogenous to the system of
environmental values analysis?38 Given a positive answer to this form of the question, it
would then be possible to ask whether the analysis of preference formation and reformation is a
task for economists or whether economics should leave this study to otherdisciplines (that is,
whether value formation should be endogenous to economic analysis, more particularly). We
believe it would be one excellent outcome of this conference if all sides in this debate could
agree that, regardless of how disciplinary boundaries are drawn, the study of what values are
actually held, the study of how values come to be held, and even what values should be held
are all legitimate questions of study. If these are meaningful intellectual questions, with
3?We suspect that there will be more agreement that the study of preference formation and
change is worthwhile than,the,study of what preferences should be held, because the latter study
apparently must blur the still-revered distinction between value-neutral science and ethics. '
38We prefer this formulation to the question of whether the^principle of "consumer
sovereignty is true because this formulation tends to encourage a more ontological than a
methodological response. .
~ • - ; 44
-------
scientific content, and especially since they seem to affect the urgent policy question of what a
moral society should accept as the obligation to act sustainably, it seems to us to follow that our
'answers to these questions must have some role in our understanding ofenvironmental values,
and that they should be studied either within some discipline or by interdisciplinary teams. .
45
-------
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' . Key Concepts of Sustainability
C.S.,.Moiling
. ' . . Outline
I, Characteristics of Ecological Patterns '' ' •. • • "
, / 1; Structural change is abrupt, not gradual - ; -.
/ \ 2. Spatially heterogeneous and discontinuous •
• 3. multiple equilibria and irreversibilities
.4, management for sustained yield fails'. • ,- . .
''• ..-'''' '". ' • '
II. Two kinds of resilience of systems .-'•''
x '••-.,•
'1: equilibrium or engineering resilience
i ' ^ ' •• ' ' '' ' v.
, >; 2.. structural or ecological resilience x ,
> t - •>
Jll. The-pathology of equilibrium resource management .
1. management agencies evolve to become rigid
2. economic sectors evolve to become dependent
. - 3. .ecosystems lose ecological resilience - ' .
• 4; 'public loses trust. t .... .
5. Conclusion: Those 4 elements'define unsustainability
,IV. Sustainability & Resilience ...
i- -.' ' .' . . ' \ ;
1. Roie of variability -:, " ,
2. • Control of variability ' ."-. .-.'•-"'
•/ "
3. Functional diversity ' .. '' -
' ' ' • ' '
* , - ^ f t ,
. 4. Adaptive teaming ; . ..'..,
V. Conclusion •, : ,
.',•''*••'• • •;••• ' '•'
' -; 1. The adaptive cycle ; •> .
-------
-------
ArroW K B Bdlin, R. Costanza, P. Dasgupta. et al. 1994. Economic growth, carrying capacity,
and the environment. The Second Asko,Meeting, In Prep.
Economic Growth, Carrying Capacity, and the Environment
,' . . .•,-.(,' , .• '
:The Second Asko Meeting and Statement, August 31- Sept. 2,1994-,. . , . '
The'Beijer Internationa] Institute of Ecological Economics . v. • -'
Royal Swedish Academy of Sciences . . ' •• ( - ' '
Box 50005 ' - ' . •'..'.••'
ST10405 .Stockholm, Sweden , , : • • •
Participants: , • ' .. • • ' . ' "''_'<
Kenneth Arrow, Ben Bolin, Robert Costanza, Partha Dasgupta, Carl Foike, :
Buzz Rolling, Bengt-Owe Jansson, Simon Levin, Karl-Goran Maler, Charles - '
Perrings, David Pimentel ' , ' '- ..'.. , ' . ,x'
v - ' . ,
Introduction . .;
', '• ' • ( ,
National and international economic policy currently ignores the environment, arid when.the'
environment is considered, it is often argued that economic growth and economic liberalization
(including the liberalization of international trade) are,, in some sense, 'good1.for the environment. •
This has meant that economy-wide policy reforms designed to promote,growth arid liberalization . -
have been encouraged with little regard to their environmental consequences.
i r ' . _ • <"' , • > *
The-relationship of economic growth and environmental quality and the issue of the "carrying
capacity" of the environment for economic activity were discussed by a group of economists and
• ecologists at the second in a series of annual meetings sponsored by the Beijer International
, Institute of Ecological Ecpnomics. Its purpose was to get a sense both as to whether there e?dsts
any interdisciplinary consensus on these issues, and what could, be said'for the development of
both economic and environmental policy; " . _'' •
• / • i
• The first question concerned the driving forces behind environmental degradation and their
connection with the process of economic, growth. The second concerned the environmental
sustainability of economic growth, and the relevance of the ecological concept of carrying
capacity, the conclusions on each topic are summarized in turn. ''.'..
. • . " •• ' • ' • -'"'.,
Economic growth, externalities and the environment , s .1
The genera! proposition that economic growth is good for the environment has been Justified
by evidence that there exists an empirical relationship between per capita income and some .'
measures of environmental quality, similar ro .the Kuznets relationship between income and income
inequality (Kuznets 1955). An.example of this "inverted U" shaped • '• . •.
• relationship is shown in Figure 1. ,'/ ' ' . •
-------
As income goes up, it. has been shown for some types of pollution, that there is increasing
environmental degradation up to a point, after which environmental quality improves. So far the
relationship has been demonstrated only for selected air pollutants (Grossman and Krueger 1993),
but it has often been conjectured that it applies for environmental quality generally. It is, however,
important to be clear about the conclusions that can be drawn from these empirical results. They .
do indicate that economic growth may be associated with some some forms of environmental
improvement as income increases: But the existing evidence does not imply either that economic
growth is sufficient to induce environmental improvement in general or that the environmental
effects of growth may be ignored. . . '-,..'
First, the inverted U relationship between income and environmental quality may be valid for ,
some environmental indicators but it has yet to be shown that it is true for environmental quality
generally. For example, total per capita carbon emissions are reported to be an increasing function
of income and solid waste in the U.S. has been rising at more than twice the rate of GD? growth
over the last two decades (Schmidheiny 1992). Moreover, the inverted U relationship between
income and environmental quality Is unlikely to apply when there are stock feedback effects or
significant externalities (Lopez, 1994). Resources with stock feedback effects are those for which
the stock of the resource affects production, such as soil or forests. The kinds of air pollutants for
which the inverted U relationship has been estimated do not have these strong stock feedback
v effects.' In addition, the examples used in the empirical studies are of urban air pollutants where
strong local effects allow local responses to be effective - at least in the high income
countries. Pollutants that have global rather than local effects (like C02) that have yet to be
adequately internalized seem to increase continuously with income.
Second, more recent empirical studies (Seldon and Song, 1994) of total country emissions
rather than of urban concentrations have, shown that although the inverted U relationship does still
seem to hold for Sox, NOx, CO, and particulates, the turning points in the. curves are at much
higher income levels than previously estimated (closer to USS 10,000 per'capita rather than
USS5.000 per capita). Most of the world's population therefore has a long way to go just to reach
the turning points .for emissions and unless concerted action is taken, global emissions of these
air pollutants are still expected to rise into the foreseeable future. - • , •
>'
Third, the inverted U curve is the result of a partial analysis which ignores general equilibrium
or whole system environmental impacts. For example, reductions in one pollutant may be made
possible by increases in another pollutant, or by transfer of the pollution to other countries
. where their effects are not as fully internalized. ' '
The potential effects of trade liberalization are relevant here. If individual producers do
not internalize environmental externalities, the effects of such liberalization can. lead to worsening
, environmental impacts but this is not always the case. The important thing to remember is that it is
necessary to study each case by itself and build the institutions for adequate interiiaJization of the
environment. , , ' ' ,
In an economy without structural change, continued economic growth'will necessarily lead
, to increased environmental degradation. What the inverted U-curves are-showing is that there are
structural changes-taking place. However,*these structural changes are not at.all automatic. They
are very much a result of conscious', institutional reforms, including environmental legislation and
, other methods to internalize environmental effects. Rather one should encourage adequate
institutional reforms at all levels of economic development. . '
-------
Finally^ the conventional measurement-of economic-growth • GNP - is far from adequate
as a measure of true economic performance We,need a more comprehensive index that includes
the flow of environmental sen-ices as well as the value of net changes in the stocks of natural
capital, Whh-such an index the potential conflicts between growth and the environment would be .
greatly diminshed. ' •••...,.
Carry ing Capacity and Ecosystem Resilience •
At the core of the problem of environmental externality in growing economies is the absence
of effectiv* signals of the environmental effects of economic growth. But the question remains
'•whether economic growth is environmentally sustainable even after the externality problem has
been addressed. Are there limits to the overall scale of the economy or the "carrying capacity" of
the planet for economic activity and human population? If ecosystem deterioration cannot bex
'delinked from economic growth, then at, some point economic growth will-be stopped by the
planet's limited capacity to absorb such deterioration.1 On the other hand, if pollution and
ecosystem deterioration can be delinked from growth,, then continual economic growth is possible,
albeit with major changes in the composition and nature, of that growth, shifting it much more
toward resource conserving qualitative improvement (development) and away from resource .
consuming physical growth. The proposition that economic development is consistent with
improving environmental, quality implies that, at least to a certain extern, the latter is true.
The simple version of the notion of carrying capacity comes out of the logistic .equation for
the growth of a single animal population in a limited, highly simplified environment., Carrying
capacity in this simple, form is of limited use for the complex issues described above. Actual
earning capacity in nature is not a fixed, static or simple relationship fo? animal populations r.or
for human ones. It is contingent on technology, the structure of production, consumption,
preferences, and the ever-changing state of the interactions between the physical and biotic
environment. '.''•• . . - - ,
" It is certainly the case tha*. the capacity of the planet to support human life is limited'for a
given set of preferences,' quality of life, and technology. This limit can be raised by lowering •
average quality of life or by changing technology and. preferences so that production and'.
• consumption are less damaging to ;he environment (Ehrlich 1994).. Given this, it is not useful to,
• state a single number for human carrying capacity. Such a number would be meaningless'because
the'consequences of both human innovation and of biological evolution aranheremly unknowable.
Nevertheless, a general index of the current "scale" or intensity of the human economy in relation
to that of the biosphere is still useful For example, Vitouseck et at (1986) calculated the total net
terrestrial primary-production of the biosphere currently being appropriated for human
' consumption is around 40%. This number says nothing about carrying capacity but it does put the
scale of the expanding human presence on the planet in perspective, / . '
i ' * *
A more useful and operational concept for environmental sustainability it that of ecosystem
resilience (Holling 1973). Ecological economic systems are sustainable only if they are
ecologically resilient. While ecological resilience may be difficult to measure and will probably :
> vary from system to system, and from one kind of disturbance to another, some usefai indicators
and early warning signals may b« possible. For exampJe, the diversity of organisms or the
heterogeneity of ecological functions have been suggested as signals of ecosystom rasiiier.ee. But'
ultimately, the resilience of systems may only be tested by intelligently perturbing them ar.d
. observing the response using what has been called "adaptive management" (Ho!Ung'1978, Walters
1986, Lee-1993). Th'at approach essentially turns regional development policy'and management."
imp experiments where interventions at several scales are made to achieve understanding, to/-
produce social or economic product, and to identify options. - , - •• '
-------
• The loss of ecosystem resilience is potentially important for different reasons. For one thing,
-it may be associated with sudden loss of biological productivity and so to a reduced capacity to
support human life under any technology. For another, it may imply an irreversible change which
not only imposes costs on present generations, but also reduces the options open to future ones,
there are significant irreversibilities, or effects are very expensive to reverse, the fact that
future increases in current national income may be associated with a reduction in the level of
emissions offers no protection against the consequences of environmental degradation. Effects
that are in this category include soil erosion, depletion of ground water reservoirs, desertification
and loss of biodiversity.
In order to assure the sustainability of economic growth, it is important to assure the
resilience of the ecological systems exploited by growing economies. In a static regime of fixed
preferences and fixed technologies, and in a non-evolutionary environment, this might well imply
restricting the level of economic activity to that allowed by the carrying apacity perceived for those
systems, in an evolving system where the notion of carrying capacity is less helpful, the limits on
the nature and scale of economic activity are less well-defined, but they are nevertheless real, and
the problem for, environmental policy is to ensure that they are respected! • . /
Conclusions
Economic growth will not automatically resolve the problem of environmental degradation.
Nor will it automatically be sustainable.- The source of difficulty is that appropriate signals of
environmental damage, including the loss of ecological resilience, do not typically occur . -
incrementally but abruptly. Moreover, the signals that do exist are often not observed or are
wrongly interpreted. This is due to ignorance about the dynamic effects of change in ecosystem .
variables (especially thresholds, buffering capacity; and loss of resilience) and to the existence of
institutional impediments, such as the non-existence of property rights. The development of .
appropriate institutions depends on our understanding of ecosystem dynamics and the maintenance
of appropriate indicators of change. • -
Better science is a precondition for improved management through institutional reform. But
the key feature is that this science must recognize that ecosystems and economic systems are of
inherently limited predictability. It is most important to determine what aspects of the system's
performance are in principle predictable and to design signals, adaptive management systems, and '
instruments that probe, test, and respond to the unpredictable and changing properties of human
and biological nature. The moist limited capacity we have is our capacity to understand and predict
the future. 'In the face of this fundamental uncertainty and unknowability, and the dramatic
consequences for the entire species of guessing wrong, we should act in a precautionary way to
maintain the variability and diversity that sustains .ecosystem resilience and buffering capacity.
•*•--• ^
... To summarize, economic growth in itself is neither the problem nor-the solution to dealing
with the environment. It is neither a panacea for improving environmental quality nor does it have
an inherently negative impact on the environment. What is important is what is the conent of.
growth. It is "better to concentrate, on internalizing: external environmental effects and thereby
protecting the resilience of ecological systems. The first will promotegreater efficiency in the
allocation of environmental resources at all income levels. The second will assure the sustainability
•' of the economic system Itrshould be made clear that this is not an argument against economic
growth per se, but against the presumption that economic growth will automatically resolve the
.problem of environmental degradation and that economic growth is automatically environmentally
sustainable. Even low income countries can and should, improve efficiency and hence welfare
by internalizing environmental externalities and even higr -ncome countries can and should resinc
-------
consumption and production so as to protect the resilience of the natural-systems on which they
depend. • • " - • • • •
'. References ' ', ...'•''" ''. • . •,• .
Ehrlich, P. R! 1994. Ecological economics and the, carrying capacity of-.
1 Earth, pp. 38-56 in: A. M. Jansson, M; Hammer, C. Folke, and R. Costanza
'(eds). Investing in natural capital: the ecological economics approach to
sustainability. Island press, Washington DC. 504 pp. . ' , -. .
'. Grossman, G. M. andA..B. Krueger. 1993. Environmental impacts, of a North
American free trade agreement, pp! 165-177 in: P. Garber (ed). The U.S. -
; Mexico free'trade agreement. MIT press, Cambridge!
Holling, C. S. 1973. Resilience and stabilityof ecological systems.
Ann, Review of Ecology and systematics. 4:'-1-23.
: Holling, C. S. (ed). 1978. Adaptive environmental assessment and
.management. Wiley, London.. £ . , .
Kuznets, S. 1955. Economic growth and income inequality. American
Economic Review. 45:1-28. . " . '
Lee, K. 1993. Compass and the Gyroscope, island Press, >
Lopez, R. 1994. The environment as a factor of production: the effects of
economic growth and trade liberalization. Journal of Environmental '
Economics'and Management. 27: 163-184.
Schmidheiny, S. 1992.. Changing course: a global.business perspective on
development and the environment. MIT Press, Cambridge. •
' •*
Selden, T. M. and D. Song. 1994. Environmental quality and development: is1
there a Kuznets curve for air pollution emmissions? Journal of
Environmental Economics and Management. 27: 147-162
- Vitousek,,P.M., P. R. Ehrlich, A. H.Ehrlich, and P. A. Matson. 1986.
Human appropriation of the' products of photosynthesis:, BioScience
^T^ ' •
" .' - • :•..-•
Walters, C. J 1986. - Adaptive Management of Renewable Resources. .
'Macnuuan, N.Y. .
World Bank. 1992. World Development Report 1992: Development and the
Enwonment. Oxford-University Press, Oxford, England. 308.pp. ,
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Concentrations of sulfur dioxide
Micrograms per cubic meter of air
55
100 . 1,000 ,1.0,000 100,000
Income per capita (dollars, log scale)
Sources:. Shafik and Bandyopadhyay, background paper;
World Bank da to: . '- , - -- •
- from WDR (1992) •
Figure 1
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•DRAFT , _ ,
Presented at the National Academy of Engineering conference' on Engineering within Ecological
Constraits. April 19-21. 1994, in Washington O.C. . " '•
' • Engineering Resilience vs. Ecological Resilience
..-•-. ' • C. S. Rolling, .
. ' • • , Arthur R; Marshall Professor of Ecological Sciences
• Department of Zoology . .••'',.'
University of Florida
, ' - Gainesville, Florida ;
Introduction ' .'•'•;'. • • . '
Ecological science'has been largely shaped by.the biological sciences..
Environmental science, on the other hand, has been largely shaped by'the physical
sciences, and engineering. As.the two now begin to join in interdisciplinary efforts, some ..-
of the fundamental differences.between them are generating conflicts caused more from
misunderstanding of basic concepts than from any difference in social purposes or
methods.. I see those differences most vividly-'in that part of ecology called ecosystem .
science, for it is there that it is.obvious that both the biota and the physical environment
interact such that the environment not only shapes the biota, the biota transforms the
environment. ', '• •." •-.' " . ". . . .- .'
7 • • . i • ,'•.-.-' (
. ..• The accumulated body of empirical evidence'concerning natural,'disturbed and
managed ecosystems/identifies1,key features, of ecosystem structure and function-
(Rolling, et al., 1994) that I suspect are not-Included in many engineer's, image of
ecology, i.e.: . • , '•',-,• . . ' -
(. ' * Ecological change is not 'continuous and gradual..: Rather it is episodic,
with slow accumulation of.natural capital such as biomass or nutrients,
punctuated by sudden .releases and "reorganization of that1 capita! as the result of
. • internal or external natural processes or of man-irnposed catastrophes. Rare
• ' events, such as hurricanes, .or the arrival of invading species^ can unpredictably
• shape structure' at critical times or at locations.of increased vulnerability. The
results of these rare events can.persist for very long periods. Therein lies' one of
the'S.ources of hew'options that diversity provides. .Irreversible or slowly
reversible states exist - i.e. once the system .flips into such a state, only,explicit
management intervention can return its previous self-sustaining state; and even
then success-is. not assured (Walker, 1981). Critical processes function at
. radically different rates covering several 'orders of. magnitude, and .these rates.
cluster around a few dominanffrequencies. • . • ' /
• Spatial attributes are not unifprm or scale invariant. Rather;' productivity
'. and textures are-patchy and discontinuous at al! scales from the leaf, to the
... . . individual, to the vegetation patch, to the landscape and .to the planet. 'There are
'several different ranges of scales each with different attributes of patchiness and.
texture (Boiling, 1992). Therefore scaling up from small .to targe cannot be a
, process of simple linear addition; non-linear..processes organize the shift from
one range of scales to another. Not only do the large and slow 'variables control\
• srpall and fast ones, the latter occasionally "revolt" to affect the former.
-------
.'•.-•'• • Ecosystems do not have single equilibria with functions controlled to
remain'near'them. Rather, destabilizing forces far from equilibria, multiple
equilibria and disappearance of equilibria define functionally different states, and
movement between states maintains structure and-diversity. On the tone hand,
destabilizing forces are important in maintaining-diversity, resilience and
opportunity. On the other hand, 'stabilizing'forces are important in maintaining
productivity, and biogeochemical cycles, and-even when these features are.
perturbed, they recover rather rapidly'if the stability domain is not exceeded (e.g.
recovery of lakes from, eutrophication or acidification, Schindler, 1990; Schindler
etal., 1991): , : _ • . ".
• Policies'and. management that apply fixed rules for achieving constant
yields (e.g. constant carrying capacity of cattle or wildlife, or constant sustainable
yield of fish, wood or water), independent of scale,, lead to systems that gradually
lose resilience i.e. to ones that suddenly break down in the face of disturbances
that previously could be absorbed (Rolling, 1986). Ecosystems are moving
- targets, with multiple potential futures that are uncertain and unpredictable.
Therefore management has'to be 'flexible, adaptive and experimental at scales
compatible with the scales of critical ecosystem-functions: {Walters, 1986)
Trie features described above are the consequence of the stability properties of
natural systems, in the ecological literature, these properties have been given focus
through debates on the meaning and reality of the resilience'of ecosystems. For that.
reason, and because the same debate seems to be'emerging in economics, I will review
the concepts in order.to provide a foundation for understanding. ' ,
The Two" Faces of Resilience '• .,
Resilience of a system has been defined in two very different ways in the
ecological literature, these differences in definition reflect which of two different
aspects of. stability are emphasized. I first emphasized the consequences of those
different aspects for ecological, systems in order to draw attention to the paradoxes
between efficiency and persistence,.or between constancy and change, or between
predictability and unpredictability (Moiling, ,1973). One definition focuses on efficiency,
constancy and predictability - all attributes at the core of engineers' desires for fail-safe
design. The other focuses on persistence, change and unpredictability - all attributes
embraced and celebrated by biologists with an evolutionary perspective and by'those
who search for safe-fail designs. '".-.,'•
The first definition, -and the more traditional, concentrates on stability near an
equilibrium steady-state, where resistance, to disturbance .and speed of return to the
equilibrium are used to measure the property (Pimm,. 1984; O'Neill et al., 1986, Tilman
et a!., 1994). That view provides one of the foundations for economic theory as well. , I
will term that engineering resilience.
The second definition emphasizes conditions far. from any equilibrium steady-
state, where' instabilities can flip a system into another regime of behavior ,- i.e. to
another stability domain (Holling, 1973). In this case the measurement of resilience'is
••the magnitude,of disturbance that can be; absorbed before the system changes its
-------
structure by changing the variables'and'processes that control behavior.
ecological resilience (Walker et al., 1969);
will call that
i ' i **
. The same differences have also begun to emerge in .economics with the
identification of multi-stable states for competing technologies because of increasing
returns to scale (Arthur, 1990). Thus, increasingly it seems that effective and
sustainable development of .technology, resources and ecosystems require ways, to deal
not only with near equilibrium-efficiency but the reality of more than one equilibrium. If
there is more than one equilibrium; in which direction should the.finger on the invisible'
hand of Adam Smith point?' If there is more than one objective 'function,, where does the ,
:• engineer search for optimal designs? . . '...-
' • L * • ' ' * '
These two-aspects, of a system's stability have very' different consequences for
evaluating, understanding and managing complexity and change. I argue that'designing
.with ecosystems requires an emphasis on the second definition of resilience, i.e.,as the
amount of disturbance that can be sustained before a change in system control and
structure occurs - ecological resilience. I do, so because that interplay between
stabilizing and destabilizing properties is at the heart of present issues cf development.
. and the environment.- global change.-.b.iodiversity loss, ecosystem restoration'and
sustainable development. •. '' . ..•'•."
^ i , '>',".' ' •
The two contrasting aspects of stability - essentially one that-focuses.'on
maintaining efficiency of-function (engineering resilience) vs. one that focuses on ;
,maintaining existence of function (ecological resilience) - are so fundamental that they
• can become alternative paradigms whose devotees reflect traditions of a discipline or of
an attitude more than of a reality,of nature'. ' ... . " • •
i '••••'. • . s • <
Those, who emphasize'the near equilibrium definition of engineering resilience,
for example, draw predominantly from traditions of,deductive mathematical theory
.' (Pimm, .1984)' where simplified,'untouched ecological systems are imagined, or from'
traditions of engineering, where the motive is to design systems with a single operating
objective (Waide-and Webster, 1976; -p. L. De Angelis, 1980; O'Neill etal., 1986). On
the one hand, that makes', the mathematics more tractable, and on the other, it
accommodates the engineer's goal to develop optimal designs. 'There'is an implicit
assumption that there is global stability - i.e. there is'only one equilibrium steady-state,
or, if other operating states exist, they should be avoided (Fig. 1} by applying
safeguards. , - ", • , . , ' -, ' ' . ;
/ . Those who emphasize the stability domain definition of resilience (i.e. ecological ,
resilience), on the other hand; come from traditions of applied mathematics and applied
resource ecology at the scale of ecosystems -:e.g. of the dynamics and management of
fresh water systems '(Fiering,. 1982), of forests-(Moiling et al., 1977), -of fisheries
(Walters, 1986), of semi-arid grasslands (Walker et al., 1969) and of interacting
populations in nature (Sinclair et,al., 1990; Dublin et al., 1990)!' Because these studies
are rooted in inductive rather than deductive theory formation and in experience with the
impacts of large scale management disturbances, the reality of flips from one operating
statelo another cannot be avoided. Moreover, it becomes obvious that the variability'of :
•'critical variables forms and maintains the stability landscape (Fig, 2). .. -.
-------
Potential
1 , (a)
Figure i: Two /views .'of a single, globally stable^equilibrium.1 (a) Provides a mechanical,
ball and topography analogy, (b) Provides an abstract state space view of a point's
movement toward the stable equilibrium, with x-| and. X2 defining, for example,
population densities of predator and prey, or of two competitors. - - , .
This is an example of engineering resilience.1 It is measured by the resistance-of the bail
to disturbances away from the equilibrium point and the speed of return to it.
* i
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(a)-
equilibrium
state change . 3
(b) :,
Figure 2.. Topographic analogy and state space views,of evolving nature. -The system
modifies its own possible states as it changes over time from 1 to 4. In this example,- as
time progresses, a--progressively smaller perturbation, is needed'to change the
equilibrium state of the system from one domain to the other, until .the system
spontaneously .changes state, (a) ball and topography analogy {b) equivalent state
space representation ' " • - , •• •
Managing for. Engineering Resilience '. - ,- ' •-, ' : . • .'' • .
.•••'• ' .' - *
Management and resource exploitation can overload waters with nutrients, turn
forests jntp grasslands^1 trigger collapses in fisheries and transform savannas into shrub
:dominated ^semi-deserts. One. example, described by Walker et a!. (1969) concerns
. grazing of semi-arid grasslands. Under natural conditions in east and south Africa, the,
grasslands were periodically pulsed,by episodes of intense grazing by various species
-------
of large herbivores. Directly as a result, a dynamic balance was maintained between
two.groups 'of grasses. One group contains species able to withstand grazing pressure
and drought because of deep roots. The other contains species that are more efficient
in turning the sun's energy into plant material, are more attractive to grazers but are
more susceptible to drought because of the concentration of biomass above ground in
photosynthetically active foliage. . . ,
. The latter, productive but drought sensitive grasses,- have a competitive edge
between bouts of grazing so long as drought .does not occur. But, because of pressure
from pulses of intense grazing, that competitive edge for a time shifts to the drought
resistant group of1 species. The result of these shifts in competitive advantage is that a
diversity of grass species is maintained that, serves a set of interrelated functions 7
productivity on the one hand and drought protection on the other.
'" N
When such grasslands are converted to cattle ranching,.however, the cattle have
been typically stocked at a sustained, moderate level," sotthat grazing shifts from the
natural pattern of .intense pulses separated by periods of recovery", to a more modest
but persistent, impact. Natural variability is replaced by constancy of production. The
result is that, in the absence of intense grazing, the productive but drought sensitive
grasses consistently have advantage over the drought resistant species and the soil and .
water holding-capacity they-protect. The land becomes more'productive in the short •
term, but the species assemblage narrows to emphasize one functional type. Droughts
that previously could be sustained then no longer can be and the system can suddenly
flip to become dominated and controlled by woody shrubs. That is, ecological resilience
is.reduced. It is an example of what Schindler (1990,1993) has demonstrated
experimentally in lakes as the effect of a reduction of species diversity when those
species are part of a critical,ecosystem function. , ; "'',:',
.- '• There are many example's of managed ecosystems that share this same feature
of gradual loss of functional diversity with an attendant loss, of resilience, followed by a
shift into an irreversible state.- e.g-.rin agriculture, forest, fish and grasslands
management (as summarized in Holling,r1986). In each case the cause is reduction of
natural-variability of the 'critical structuring variables such as plants, insect pests, forest
fires, fish'populations, or grazing pressure, in order to achieve a, social, economic or
engineering objective. The result is that the ecosystem-evolves to become more
spatially uniform, less functionally diverse and more sensitive'to disturbances that
• otherwise could have been absorbed. That is, ecological resilience decreases even
though engineering resilience might be great.' Short term success in stabilizing
production leads to long term surprise. • . ', . .^
.' ' • "*• '
Moreover, such changes can be essentially irreversible because of
accompanying changes in soils, hydrology, disturbance processes,and in species
complexes that regulate or control ecological structure and dynamics.. Control of
ecosystem function shifts from one set of interacting physical and biological processes
to a different set (Moiling et al.,. 1994). . ' /'. ' -
• In the examples of resource management that I have explored in depth, not only
do ecosystems become less resilient when they are managed with'the goal of achieving
constancy of production, but the management agencies, in their drive for efficiency, also.
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become more myopic, the relevant industries become more, dependent and static and
.the public loses trust (Gunderson et al., 1994)^ This seems to define an ultimate,
pathology that typically can lead to a crisis'triggered by unexpected external events,
sometimes followed by a .reformation of'policy. ,l,first, saw the form of. this pathology
emerging-in the early stages of .testing and developing theories/methods and case '
study examples of adaptive environmental assessment and management. Those cases
and their diagnosis was summarized in Moiling 1986. : ..
Those cases involved a number of different examples of forest development, of
fisheries exploitation, of semi-arid grazing systems and of disease management in crops •'
arid people.. We have greatly expanded and deepened the case studies and tests since
then, adding examples that are presented in a new book1 that explores'bothf the ,
dynamics of ecosystems and the dynamics of the institutions that attempt to manage >
.them (Gunderson et a!. 1994).. Two of .the original examples-continue to provide
insights. . * • . .
• / i ' ' _
in'those two examples, the initial diagnoses of the pathology as-! saw it in the
early 1970's were as follows: • .
•• Successful suppression of spruce budworm populations .during the 1950's'and ' -
-• . 1960's in-eastern Canada, using insecticide, certainly preserved the pulp and
.paper industry in the short term by significantly, reducing defoliation'by the insect
so that tree mortality was delayed. This encouraged.expansion of pulp mills, but
left the'forest, and hence the economy, more vulnerable :tp an outbreak that
. would'cause more intense and more extensive tree mortality,than had ever been
experienced before. That is, the short term success of spraying led to moderate
•; levels of infestation and, partially protected foliage that became 'more
homogeneous, over larger areas, demanding evermore vigilance and control.
* ' • ' ' ' " ^ .'•"'*
, •'Effective protection and enhancement,of salmon spawning through use of fish ,
• . hatcheries on the west coast of North America, quickly led to more predictable
and larger catches by both sport and commercial fishermen. That triggered
increasing fishing pressure and investment in both sectors, pressure that caused
, more and more of the less productive natural stocks to become locally extinct.
That left the fishing industry precariously dependent on a few artificially enhanced
stocks whose productivity began declining in a-system'where larger scale
physical oceanic changes began :to-contribute to unexpected impacts on
distribution and abundance of fish. . ' , ' K • _ •
"'"•••',• . ' . • '.'.." • • * ' '< •
In both those cases; however^ by the 1980's I began to-realize that the phase of
a growing pathology was transient and couid be broken by a spasmodic readjustment, ,
an adaptive lurch of learning that created new opportunity. It is that creation o'f
something fundamentally novel that gives an evolutionary character to development of a
region,that might make sustainable development an_achievable reality rather than be an
oxymoron. ' • ~" .'•'.'','• -
» ' .'• • •" •• '- . -• '
The heart of these two different views of'resilience.lies in assumptions of the
existence of multi-stable states or not. If it is assumed that only one stable state exists •
or can be designed to so exist, then the only possible definition and measures for
-------
resilience are near .equilibrium ones - such as characteristic return time. • And that is
certainly consistent with the. engineer's desires to make things work, not to intentionally
make things.that break down or suddenly shift their behavior. But nature is different.
There are'different stability'domains in nature and variation in critical variables
test the limits of those domains., Thus a near equilibrium focus seems myopic a'nd
attention shifts to determining'the constructive role of instability in maintaining diversity
and persistence, and to designs of management that maintain ecosystem function in the
face of. unexpected disturbances. Such designs maintain or expand ecological
resilience/ It is those ecosystem functions and ecological-resilience that provides the
ecological, "services" that invisibly provide the foundations for sustaining economic
activity. " ' • • '.:.'-.
Managing for Ecological Resilience ••/ , •
There is a puzzle in -these'examples and this analysis. It implies that efficient
control and management of renewable resources in an engineering sense leads initially
to success in managing a target variable for sustained production of food or fiber but
ultimately to a pathology of less resilient and more vulnerable ecosystems, more rigid
and unresponsive management agencies and more dependent societies. But there
seems to be something inherently wrong with that conclusion, implying, as it does, that
the only solution is a radical return of humanity to-being "children of nature". The puzzle
needs to be clarified in order to test its significance and generality. ' .
. • The conclusion is-based onjwo critical points., One is that reducing the
variability of critical variables within ecosystems inevitably leads to reduced resilience
and increased vulnerability. The second is that there is, in principle, no different way for
agencies and people to manage and benefit from resource development. Both are
explored in mqre detail in a new book on barriers and bridges to ecosystem and
institutional renewal, (Gunderson et-al., 1994} so'that here I will only deal with
highlights. ' ' "'••'. .., ' . ''....
Puzzles can sometimes be solved by searching for counter examples.'Oddly,
nature itself provides 'Such^counter examples.,of tightly regulated yet sustainable
systems in the many examples of physiological homeostasis. Consider temperature
regulation of endothe'rms ("warm-blooded" animals), for example. That represents a
system where' internal body temperature is not only tightly regulated within a narrow
band, but among present-day birds and mammals, at an average temperature perilously
close to lethal. Moreover, the costs of achieving that regulation requires ten times the
energy for metabolism than is required by an ectother'm. That would seem to be a
recipe for not only disaster but a very inefficient.one at that. And yet evolution somehow
led to the extraordinary success of the'animals having such an adaptation - the birds
and mammals. .. . ' .. • • . ' ' . -, • - , • '
',..•' In order to test the generality of the variability loss/resilience loss hypothesis, I
have been collecting data from the physiological literature on the viable temperature
range within the bodies of the internal body of organisms exposed to different classes of
varfability. I have organized the data'into three'groups ranging from, terrestrial.
,8
-------
, ectother'ms,("coid-blooded", animals) exposed to the greatest variability of temperature
from unbuffered ambient conditions, to aquatic ectotherms.exposed to an intermediate
level of variability because of the moderating attributes of water, to endotherms'that
regulate .temperature within a-narrqw band.- The .viable range of internal body
temperature .decreases from about 40 degrees centigrade for the most variable group to
about 30 degrees for the'intermediate, to >20 degrees for'the tightly regulated
endotherms. Therefore resilience, in this case the range of internal temperatures that'
- separates life from death,.clearly does contract'as experience with variability is reduced,
just as in .the resource management cases. I conclude, therefore; that reduction .of
' variability of living systems from organisms 'to ecosystems inevitably leads to loss of
resilience.in that part of the system being regulated. ' ' -.
But,that'seems to leave an even starker paradox for management seemingly, '
. -successful control inevitably leads to, collapse. But, in fact, endothermy does persist
and flourish. It therefore serves as a revealing metaphor fo.r sustainable development.,
This metaphor contains two features that were not evident in my earlier descriptions of
examples of resource-management. ' . ' .
First, the kind'of regulation is different. Five different mechanisms, from ;.
evapprative cooling to. metabolic heat .generation, control the temperature of
endotherms. Each mechanism is not notably efficient by itself. Each operates over a - .
somewhat different but overlapping rande of conditions and with different efficiencies of .
response. It is this overlapping "soft" redundancy that seems to characterize biological
regulation of all kinds, it is not notably efficient or elegant in the engineering sense. But
it-is robust and continually sensitive to changes in internal body temperature. That is .
quite unlike the examples of rigid regulation by management where goals of operational -
efficiency gradually isolated the regulating agency from the things it was regulating: , .
Examp!es-of similar regulation in nature of ecosystem dynamics include the set of
herbivore grazing antelope species that structure.the^vegetation of the savannas of East
Africa at intermediate scales from 'meters to kilometers (Walker et a!. 1969); or the-suite
of 35 species of insectivorous birds that, through their predation on insect larvae, set the '
timing for outbreaks of spruce budworm in the forests of eastern Canada (Rolling 1988)!
In these sets of species, each one performs its actions somewhat differently from
others; and each responds differently to, external variability because of their differences
in habitat-preference and the scales of choice for their resources (Moiling 1992). As an
example', some species of insectivorous birds exert modest predation pressure over a -
broad range of prey densities, whereas,others exert strong pressure over narrow ranges
of density and still others between those extremes. .The densities at which the predation
.-impact is maximal also, differs between species. Competition occurs among these'
species such that the aggregate predation effect is inefficient when predators are .
abundant'and prey scarce and efficient when the reverse is the case. As a
consequence,'the result of-their joint action is an overlapping'set of .reinforcing
influences that are less like the redundancy "of engineered .devices and more like
.portfolio diversity strategies of investors. The risks and benefits are spread widely to
retain overall consistency in .performance independent of-wide fluctuations in \he
'• individual species." That is at the heart .of the role of functional diversity in maintaining
the resilience of ecosystem structure and function. . • • . ' • .-•'..
-------
s We chose to term this functional-diversity following the terms suggested by
Schindler (.1990) .and by,Moiling et al. (.1994). Such diversity provides great robustness
to the process and, as a consequence, great resilience to the system behavior.
The second feature of nature's.-way of tightly regulating variability that is1 different.,
from traditional management, is the tendency to function near the edge of instabilities,
not far away from them. That is where information and opportunity is the greatest.
Again endothermy provides ah example. Endothermy is a true innovation that
explosively released' opportunity for the organisms evolving the ability. Maintaining high
body temperature, just short of death, allows the greatest range of external activity for
an animal. Speed and stamina increase and activity can be maintained at both high and
low external temperatures. A range of habitats forbidden to an ectotherm is.open to an
endotherm. The evolutionary,consequence of temperature regulation was to suddenly
open opportunity for dramatic organizational change and the adaptive radiation of new
life forms. Variability is therefore not eliminated. It is reduced in one place and
transferred from the animal's internal environment to its. external as a consequence of
allowing continual probes by the whole animal for,opportunity and change. Hence the
price of reducing internal resilience, maintaining high metabolic levels and operating
clo.se to an edge1 of instability is more than offset by that creation, of evolutionary
opportunity. Nature's policy of ecological/resilience, if I can call it that, seems far from'
those of .traditional engineering safeguards or economic efficiency where operating near
an equilibrium far from an instability defines what I call engineering resilience.
But,ascribing that designation to'engineering is to stereotype the field with .only
one face of its activities ,.just as ecological resilience represents only one face of
ecology. Atleast some aspects of ecologically resilient control are equally familiar to the
control engineer, for operating at the edge of instabilities is characteristic of designs-for
high performance.aircraft. Oddly," the resultJs opportunity. Effective control of internal
dynamics at the edge of instabilities generates external options. Operating on the edge
of instability.generates immediate signals of changing opportunity.
.That surely is at the,heart of sustainable development - the release of human
opportunity. It requires flexible, diverse and redundant regulation,'early signals of error
built into incentives for corrective action, and experimental probing of the continually
'.changing reality of the external world. Those are the features of Adaptive^
Environmental and Resource.Management. . Those are the features missing in the
descriptions I presented of traditional, piecemeal, exploitive resource management and
its ultimate pathology. > , ' -. • . - .
•Conclusion - ,.-.;. ,
There are indeed, strong suggestions that management and institutional regimes
can be "designed to preserve or. expand resilience of systems as well 'as provide
- developmental opportunity. lt-is:a central issue that only now is beginning to be the
focus of serious scholarship and practice. Of the cases I know well, management of the
forests of New Brunswick seems to most clearly demonstrate .the cycles of crisis and
learning and the hesitant emergence of a more sustainable path.. . ' '
In that situation since the early 1950's, one major crisis and several minor ones
have occurred, During this period; the new technologies of airplanes and pesticides
10
-------
.developed in WW II were adapted for spraying .operations and their use progressively
refined to achieve high mortality of insects while reducing environmental "side-effects".'
These procedures of pesticide control of budwdrm, synergized with other technological
developments of tree harvesting, pulp production chemistry, and mill construction and'
resulted; in large investments in pulp.production: Minor crises occurred when.human '
health impacts were linked to the pesticides. Key pieces ,of integrated understanding' of -
the natural system were achieved by-the teams of Morris (1,963) and the modelers of the
1970's-(Clark et al., 1979). The brittleness'that developed (defined, by a loss-of
ecological resilience together with an increase Jrr institutional efforts to .control '
information;and action) reflected the complacency of agency staffs that budworrri
damage was controlled in an'efficient, and cost effective, manner, and that there was
plenty of wood available for harvest. In reality, the costs of using pesticides.were rapidly
. increasing because .of increases in oil prices and because of modification of pesticide. .
application because of public pressure. In addition', available stocks of harvestable'.•
trees were decreasing because of past harvests.and because more and more mature
stands over larger areas were gradually deteriorating from the pressure'of moderate but-
persistent budworm defoliation. The major crises occurred during the late 1970's when •
.a forest inventory report finally indicated that there would not.be sufficient stock to
support the current mills, thereby confirming an earlier prediction of the models. This
led, to. a hew law that restructured the licensing "and forest .management policies, and
freed the innovative cap'acity of local industries ,within a regional set of goals and
constraints. A sequence of adaptive responses among the actors began to develop..
'regional forest policyjn a way'that now engages .local industrial, environmental and
recreational goals. . ' . - ' -
The examples of growing patholpgy are caused by the very success of achieving.'
near equilibrium behavior and control of a single target variable independently of,the
larger ecosystem,'economic and social interactions. When'that orientation or goaj is
• abandoned, . it happens suddenly, in response to a'perceived or real crises. The scale '
of the issues become redefined more broadly from a local to a regional setting and from
short term to long term. The scientific understanding of the natural system becomes
-more integrated and the issues themselves are not posed in response to needs to
maximize constancy of productivity of yield, ,but to ones 'of designing interrelations
between people and resources .that are sustainable in the face of surprises and the
' unexpected. If there is such a thing as sustainable development, then that is it. The ;
key features are integration of knowledge at a range of scales, engagement of the '
public in exploring alternative potential futures, adaptive designs that acknowledge and,
test the unknown,-and involvement of citizens .in monitoring and .understanding
outcomes. That only is possible in situations where ecological resilience and public
trust have not been-degraded. If they have, as in many situations, then the initial goal
.has to be the restoration pf.both resilience and trust; k • .. '
Literature Cited ' . ' • •'. ~ ' . % . , •
Arthur,-B. 1990. Positive feedback in the economy..Scientific American 262:92-99.
• * ' . ' ^ ' ( •
'Clark, W. C., D.'D. Jones and C.-S. Moiling. 1979. Lessons for ecological policy design:
a case study of ecosystem management/'Ecological Mode!ling,7:1-53. •
11
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De Angelis, D. L. 1980. Energy flow, nutrient cycling and ecosystem resilience. Ecology
.61:764-771. • . . .. " ... ' . . .
Dublin, H. T., A. R. E. Sinclair andJ. McGlade. 1990. Elephants and fire as causes of
multiple stable states in the Serengeti-mara woodlands. Journal of Animal
; . Ecology 59:1147-1164. , ' -
Fiering, M. B. 1982. Alternative indices of resilience. Water Resources Research 18:33- -
•39. . . • .' • .;•'•.._:;•-•
Gunderson, L. H., C. S: Holling and S. Light. 1994. Barriers and-Bfidges to Renewal of
Ecosystems and institutions. New York: Columbia University Press. In press. .
Moiling^ C. S. 1973. Resilience and stability of ecological systems. Annual Review of
Ecology and Systematics 4:1-23. ;
Holling, C. S., D. D. Jones and.W. C, Clark. 1977. Ecological policy design: a case
study of forest and pest management. IIASA CP-77-6:13-90 in Proceedings.of a
Conference on Pest Management, October 1976, G. A. Norton and C. S. Moiling,
eds. Laxenburg, Austria. , ^ • ' .
Holling, C. S. 1986: Resilience.of ecosystems; local surprise and global'change. Pp.
292-317 in Sustainable Development of the Biosphere, W. C. Clark and R; E.
Munn, eds. Cambridge: Cambridge University Press. • ; •
Moiling,- C. S. 1988. .Temperate forest insect outbreaks, tropical deforestation .and
s migratory birds. Memoirs of the Entomological Society of Canada 146:21-32*. -
Holling, C. S. 1992. Cross-scale morphology, geometry and dynamics of ecosystems.
x Ecological Monographs 62(4):447-502.i . -" • •' • '
Holling, C. S., D. W, Schindler, B. Walker and J. Roughgarden. 1994. Biodiversity in the
functioning of ecosystems: an ecological primer and synthesis. In Biodiversity
Loss:'Ecological and Economic Issues, C. Perrings, K-G Maler, C. Folke, C. S.
Hollihg and B-O Jansson, eds. Cambridge: Cambridge University Press. In press.,
' - s
Morris, R. F. 1963. The dynamics of epidemic spruce budworm populations. Memoirs of
• the Entomological Society of Canada 21:332.
O'Neiil.'R. V., D. L. DeAngelis, J. B. Waide and T. F. H. Allen. 1986. A Hierarchical
Concept of Ecosystems. Princeton: Princeton University Press.
Pimm, S. L. 1984. The complexity and stability of ecosystems. Nature 307:321-326.
Schindler,'-D. W. 1990. Experimental perturbations of whole lakes as tests of
hypotheses concerning ecosystem structure and function. Proceedings of 1987
, Qrafoord Symposium. Oikos 57:25-41.; . ' . • . -
-------
Schindler,"D. W., T. M. Frost, K. H. Mills; P. S. S. Chang, I. J. Davis, F. L. Findlay, D. F:
Malley, J. A. Shearer, M. A. Turner, P. J. Garrison, C. J. Watras,. lOWebster, J.
M. Gurin, P. L.Brezonik and W. A. Swenson. 1991. Freshwater acidification,
. reversibility and recovery:.comparisons of experimental and atmosphericaHy-
acidified lakes. Volume, 97B: 193-226 in Acidic Deposition: ,lts' Nature and'
Impacts'; F. T. Last and'R. Watling, eds. Proceedings of the Royal, Society of
, Edinburgh. . ' ...'"'•'..
•' > • ..'••' ' , • ' ^ '•), • '-'..-
.Schindler, .D. W. 1993. Linking .species and communities to .ecosystem management.. '
. Proceedings of the 5th Gary Conference, May 1993..
Sinclair, A. R. E., P. D; Olsen and T. D. Redhead. '1990. Can predators regulate small •
mammal'populations? Evidence from house mouse outbreaks in Australia. Oikos
- 59:382-392. ''•'.• , • '
*i "" p .
Tilmam David, John A. Downing'. 1994. Biodiversity and stability in grasslands.' Nature
• 367:363,365. \ ,- ' . I • . • .,
\ . • " •• . •. . . •
Waide, J. B. and J*.' R. Webster. 1976. Engineering systems analysis: applicability to
^ecosystems. Volume IV, pp. 329-371 in .Systems Analysis and Simulation in ,
Ecology, B. C. Patten, ed. New York: Academic Press . . • • " '-- •:•
\ *, - ' '
Walker, B. H., D. Ludwig, C. S. Holiirig and R. M. Peterman.-1969. Stability of. semi-arid •
' savanna grazing systems. Ecology 69:473-498. •' ' -..•.-'
Walker, -B. .H. 1981. is succession a viable concept in African savanna ecosystems?
'Pp. 431-447 in Forest Succession:. Concepts and Application,,D. C. West, H. H.'
Shugart and D. B. Botkih, eds. New^York: Springer-Verlag. "-
.Walters, G. J.-1986. Adaptive Management of Renewable Resources. New York:
''McGrawHill. '-..,- •. •
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I feel .uncomfortable, as an ecologist, speaking to an interdisciplinary
audience on the Malthusian conflict. That is because we so'often'use
caricatures of other disciplines in order to give sharpness and definition
to our own view, -to our own understanding, and to" our own desires for
action. And, in recent years, the caricatures of ecology, as perceived by,
the public, have little relation to the scientific, biological, and systems
traditions that have formed my own ecological research and related, poli-
cy activities. Disciplinary knowledge is not static. It progresses in
lurches of expanded understanding as theory and practice confront reali-
.ty and as expanded debate with other disciplines widens comprehension.
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arise and understanding widens that can beltendefine the human condi-
tion and responses to it. That is now the case for a wide range of present
issues generated' by the expanding and intensifying interaction between
people, nature, and economic development. 7
Recently the Beijer Institute of the Royal Swedish Academy of Sci-
ences sponsored a meeting between five ecologists and five economists
in order to identify the differences in concepts, models, problem defini-
tions,, and policies between the two disciplines. 'In contrast .to the1
stereotypes we each had of .the other field, we discovered that there has
been more convergence between the two disciplines than most of us had
recognized; The ecologists learnt that the cornucopian arguments presen-
ted by Julian Simon (see e.g/Simon and Kahn 1984) did not at all
represent the evolving body of theory and practice of economists at the
.leading edge of theory development, analysis and, practice." That is,
growth in material possessions is not a given good, there are limits both
to'peoples' adaptive capabilities and to nature's resilience, and the pre-
• - Arthur R. Marshall It. Professor in Ecological Sciences, Arthur R. Marshall Ecosys-
tem Laboratory, Department of Zoology, .University of Florida.
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of exponential growth and ecological limitation. .. - . '
MacArthur. gave focus to thc school of ecology called community
ecology and Clements to thc school that now would be called ecosystem
ecology. At the same time as Clements was writing; still another tradition
of ecology began to be developed. This was mathematical ecology,
whose initial foundations derived from applied physics. It long remained
detached from the empirical traditions "of experimental and field-based
ecology. This tradition was initiated by A. J. Lotka (1925) in a seminal
book that continues to inform population ecology to this day. But it was
•one set of differential equations, the Lotka- Vol terra equations, that cap-
tured most attention. These equations provide a simple conceptual model'
with two coupled differential equations that express thc interactions bet-
ween populations of predator and prey or between two competitors.
Again, each has an exponential growth term and a population limitation
term. Using the simplest expression for these terms, the equations gene-
rate population oscillations around an equilibrium' point — formally, the
^type of oscillation termed. a neutrally stable orbit. As I will note in the,
next section, however, the form "of these .'expressions has subsequently
been studied in the field and laboratory, leading to more realistic genera-
lizations whose various alternatives generate a wide range of different
population beha'viours — asymptotic or stable-limit cycles, rarely, or,
more commonly, local extinctions, multi-stable slates, and chaotic beha-
viour. • . -. ,-•*
Two Australians, Nicholson, an entomologist, and'Bailey, an applied
mathematician, were perhaps the first to give a sense.of biological reality
to mathematical ecology (Nicholson and Bailey 1935). Oddly, the
growth arid dealli terms of their equations were initially identical to those
of the simple Lotka- Volterra.equations, but they .ex pressed theirs novas
differential equations but as difference equations. The reason was a bio-
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generation are completely replaced by the populations of the next gene-
ration. This introduced a-simple lag which destabilized the; behaviour so
that the amplitude of population interactions between host and parasite
or prey and predator increased until one went extinct followed by the
other. If a lag is added (o the simple Lolka-Volterra equations, the same
thing' happens, ,
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ted populations in 'balance' with themselves and their enviror
an image whose simplicity and ordering "power provided Ih
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. orable and near equilibrium behaviour the only behaviour of interesj. In
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a world of locally unstable equilibria. • '
When, however, we -perceive a structuring and controlling role for
keystone clusters of the biota at lower-scale ranges; for zoolic and abiotic
processes-like insect outbreaks, large-ungulale grazing, and stonn and
fires at inlermediate-scale ranges, arid for geophysical processes at large-
scale ranges, then the image of Nature Resilient emerges. Such an image
: incorporates the principles of population regulation and of physical var-
iation that are contained in the two other metaphors, but adds principles
of biotically induced variation. \ ' " ,
In ihis view, behaviours near equilibrium and all the traditional math-
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assume trajectories that take them far from the structuring equilibrium
altractors and repellers. The critical focus then becoines.conditions at the
boundaries of stability domains, the size of those domains, and the forces
that maintain (hose domains. That was what I emphasized in a review
paper entitled 'Resilience and Stability of Ecological Systems' (llolling
1973) as an antidote to the narrow view of fixed, equilibrium behaviour
and of resistance of populations to. local perturbation. Those narrow,
'essentially static notions :have provided the foundations for- the now-
discredited goals of maximum sustained yields of fish populations or of
fixed carrying capacity for terrestrial animal populations. The success of
.achieving such goals squeezes out variability and resilience is lost.
, The three axioms: over-production of populations, environmental
limits, and physical and biotic variation, therefore, become as fundamcn-,
tal for ecology as they are for evolutionary biology and natural selection.
So pan of me answer to the question 'why has the world not col-.
lapsed?' is that natural ecological -systems have the resilience to
experience wide change and still maintain the integrity of their functions.
The other part of the answer lies in human behaviour and creativity. •
Change and extreme transformations have been part of humanity's evo-
lutionary history. People's adaptive capabilities have made it possible not
only to persist passively, but to create and innovate when limits are
reached. At its extreme, these attributes underlie many economists' pre-
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Ecologist View of Malthuxian Conflict • 95
mental transformation in the least resilient of those assemblages. .
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1994), 'Deliberately Seeking Sustainability in the C
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nicture'. Proceedings of the National Academy of
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Jdwig, D.. Holling, C. S., and Pelcrman. R! M. (1981;
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fitfSTAINABLE DEVELOPMEffiC
' ~
January. 10,. 1995
Outline of Talk
,
Robert Repettb
'World Resources Institute
X. Economists' role in measuring and analyzing sustainability
v ' • -.. . '•'"•. -
1. economists' utilitarian concerns ;
i • 1 . >
r 2. the limits of economists' expertise \ : :
. • . , '. _ '.: -,'_.. I ' . • ;
3. improving economic accounting systems .
B. Measuring Natural capital and (Sustainable) Income
. , i. Hicicsian income and accounting for natural capital :
, • •. ' . i '•
2. The importance of natural capital (recent da^a)
3. problems arising from,the failure to measure disinvestment
' _ ' in.' natural :capital . ^ ,',.••/ • \
4. Recent changes in accounting systems > '• '
5. What still needs, to be done .
• '•>-.•' - - ' . '•••.,
C. Measuring Productivity and Productivity Growth
1.. problems with the current method from the standpoint of
sustainable development . ,-',-(•
a. measuring inputs and outputs ' ;
i) user costs for stock depletion •
ii) the costs of residual outputs
, i. ,
b. faulty inferences: the effects of environmental ,
regulation on productivity growth .
' . * • • . . . ' ' i
2. an environment-friendly approach to productivity
measurement •'.'.•'..-.• . . '. • . ; '
. s ' _ , . , -
, . a. example: productivity trends in the utility, sector
D. Conclusion: The Need for Cooperation . ':••'.
-------
-------
ROBERT REPETTO
Environmem
and Why It Is So Important
We need to consider seriously the establishment of market valuations
>/0r environmental damages and impediments, including marketable
pollution rights and charges for the use of natural resources.
Ocean pollution, the "ozone hole," rising concentra-
tions of greenhouse gases, and disappearing species all
remind us of one fundamental lesson: the capacity of
the biosphere and basic geochemical systems to with-
stand human intrusions is limited. The scale of popula-
tion and economic activity is already so large that
environmental impacts that were once local and negli-
gible are now global and unavoidable.,
If the world economy, driven by rising population
. and output per capita, continues expanding at histori-
cal rates, doubling in size every twenty to twenty-five
years, natural systems will be increasingly disrupted.
More, residuals will be discharged into the environ-
ment; more biological and geological resources will
be appropriated for human uses. The only way these
disruptions could be avoided is by rapid and continu-
ous declines in the use of natural resources and the
discharge of residuals per unit of .output.
.This inescapable fact directs our attention to a ne-
glected dimension of productivity: productivity in the
use of the environment! Scientists and engineers have
discussed environmental impacts in terms of "through-
put"—the total flow of materials and energy through
the economy in deriving useful products and services.
The reciprocal concept is environmental productivity—
natural resources used and residuals produced per unit
of useful output. . .
• Productivity has always been a central concern of
-businessmen, engineers, economists, and government
officials, since it is the basic measure of efficiency.
Product! vity growth is recognized as the key to long-run
business profitability and economic welfare. The appar-
ent lag in productivity growth in the United States
.economy, relative to many other industrial countries
and to our own past record, has generated many diag-
noses and diverse policy prescriptions. .These range.
from tax revisions to increased government support for
research to improvements in education.
Economists measure productivity with reference
-to an underlying "production function," which relates
marketed outputs to purchased inputs. In this analyti-
cal framework, the rate of productivity change is
defined as the difference between the growth rates of
outputs and that of the index of inputs. Labor produc-
tivity, for example, is a measure of output per worker. •
Output is typically an aggregation of different com-
modities or services weighted by their prices. Simi-
larly, labor input is typically an index of different
categories of labor services weighted by their relative
employment costs. , . :
ROBERT REPETTO is Director of the Program in Economics. Technology and Institutions at the World Resources Institute. Washington. D.C.(
September-October 1990/Challenge 33
-------
A 'broader measure, "multifactor productivity"
'(also called total factor productivity), measures output
per unit of an index of labor, capital, and intermediate
materials inputs. Each of these "factors of production"
is really an aggregation of diverse commodities and
services weighted by their relative costs to the firrrf.
The assumption that enterprises in competitive indus-
tries minimize production costs allows analysts to
equate the relative costs of various purchased inputs
to their relative marginal productivities in the produc-
tion of salable outputs.
Economists at the Bureau of Labor Statistics and
in universities have made rhpnumental efforts to'im-
prove the measurement of marketed inputs and out-
puts. Ways have been found to incorporate changes in
the quality of products (such as computers) into mea-
surements of outputs. The measurement of labor input
has been refined by identifying shifts in th? composi-
tion of the work force by training, education, and other
characteristics that,affect productivity. Similarly,
measurements of the services of the capital stock have
been developed that carefully distinguish the age;
obsolescence, and utilization of various categories of
buildings and equipment. These refinements have im-
proved our understanding of productivity change and
its determinants. , _••
This greater understanding is strictly limited to
marketed outputs and inputs. Almost no attempt has
been made to measure nonmarketed outputs (such as
emissions) or inputs (such as natural resource ser-
vices), or to assess their significance for.,economic
productivity. Although the economic costs of pollu-
tion are known to be significant, and although natural,
systems that provide materials and energy or serve as
a repository for wastes are increasingly stressed, en-
vironmental dimensions of productivity change re-
main completely unexplored. ? . :
Evaluating the power industry
* .
This article represents a first exploratory step in that
direction, taking as an object of study the electric
..power industry in the United States. Technologies for
electricity generation are crucial to the control of
urban air quality, acid precipitation, and global cli-
mate. The environmental implications of solar, nu-
clear, and various fossil fuel technologies are
markedly different. Also, the economic problems as-
sociated with higher energy costs are perceived to be
the most serious constraint on policies to control these
environmental impacts.
Moreover, several studies have revealed that en-
vironmental regulations already imposed on the elec-
tric power industry have reduced the, rate of
conventionally measured productivity growth in that
industry and in electricity-using industries. Some di-
rect effects on conventionally measured productivity
in the electric power industry .are obvious, since
switching to higher quality fuels or installing pollution
control equipment raises costs without increasing
electricity output. Regulations might also have af-
fected productivity growth within the electric power
industry by reducing opportunities to realize econo-
, mies of scale, or restricting choices to install new,
superior technologies. Indirect effects on productivity
in electricity-using industries stem from electricity
price increases and higher investment costs.
These studies imply that environmental regu lation
has had a significant negative impact on productivity
growth in the electric power sector and in the economy
in general.'Frank Gollop and Mark Roberts con-
cluded, for example, that regulation resulted in
roughly half the measured reduction in productivity in
the electric utility sector during 1973-79 (see For-
Further Reading). Dale Jorgenson and Peter Wilcoxen
estimated that environmental regulation of all kinds
reduced GNP growth over the period 1973-85 by 0.19
percentage points per year (see For Further Reading):
- A broader concept of productivity encompassing,
nonmarketed inputs and outputs might lead to differ-
ent conclusions. A typical 500 megawatt coal-fired
power station produces not only 3.5 billion kilowatt
hours of electricity per year. All the elements in the
1.5 million tons of coal and 0.15" milHon tons of
limestone it uses as inputs reappear as outputs in some
form. Of the 50,000 tons of sulphur in the coal, 5,000
tons are emitted to the atmosphere as sulphur oxides,
5,000 remain in the fly ash, and the remaining 40,000
tons are captured in the scrubber sludge. Virtually all
the.million tons of carbon in the coal is burned and
emitted^ mostly as carbon dioxide. Other inputs re-
leased as atmospheric emissions include 10,000 tons
of nitrogen oxides per year formed from air drawn into
the burner, 500 tons of particulate matter, 225 pounds
of arsenic, 4.1 pounds of cadmium, and 114 pounds
of lead, all present in the fuel source.
A more general measure of economic productivity
that recognized the conservation of matter and energy
would assess the extent to which the industrial trans-
formation of matter and energy has yielded outputs with
' 34 Ctiallenge/Sepiember-October 1990 .
-------
I
greater economic benefits—or lower economic costs—
than the costs of the inputs. Many of the power plant's
unmarketed outputs have economic significance. Air-
borne sulphur in its various compounds affects human •
health, plant growth, visibility, and the durability of
materials. Nitrogen oxides have similarly wide-ranging
' effects. Heavy metals such as cadmium and lead are
highly toxic. Changes in the mix of beneficial and
damaging outputs should be reflected in productivity
measures. Productivity measures restricted to a subset
of economically significant inputs and outputs can mis-
represent technological progress in an industry.
Which inputs and outputs are marketed and which
are not is largely a matter of institutional rather than
technological design. Air quality is a nonexclusive
. public good: one person's use does not significantly
reduce another's potential use. This restricts the oper-
ation of private property rights arid markets. Nonethe- -
less, recent experiments with marketable emissions
rights have created quasi-property rights in air quality,
such that rights'to emit sulphur in a particular region
can be traded and priced. In any case; ignoring activ-
ities and impacts outside the market system can,be,
quite misleading. .
An exploratory measurement
If atmospheric emissions are regarded as joint outputs
of the industry alpng-with kilowatt hours, the first task
in measuring environmental productivity is developing
an index of emissions of various compounds, which
have had divergent trends. In principle, the appropriate
weights for such an index are the marginal damages
attributable to each pollutant: the identifiable.economic
costs (of all kinds) from an additional ton of each
substance emitted into the atmosphere. Just as the price
of a kilowatt hour approximates its marginal value to
the customer, the "shadow price" of a pollutant equals
its incremental cost to those exposed to it.
Only emissions of sulphur oxides, nitrogen oxides,
and paniculate matter were included .in this index,
(because no-estimates of marginal damages for other
atmospheric emissions were obtainable (see Table 1).
Thus, emissions of carbon dioxide and airborne toxins
were omitted, even though they are economically sig-
nificant. Even estimates of marginal damages for the
three classes are extremely crude. Damages obviously
depend on where and when emissions take place: a ton
emitted over New York City oh a summer day causes
more damage than a ton emitted over Nevada during a
Table 1
Estimated Marginal Damages from Atmospheric
Emissions
.(1987$ per ton}
A. Emissions of particular matter.
Category of Damages
Marginal Damage
Mortality
Acute Morbidity
Chronic Morbidity,
Soiling
Total.
point estimate
upper limit ,
lower limit
point
upper ; -
lower - ••
.point
upper
lower
poinj
upper
lower '
poinj
; upper
lower
'. 1.200
7,200 '
' 240
1.000 .
2.100
'0-
100
120 , .
. 100
250.
480
so •
. ' . 2,552 '
9,900 . .
390
Missing categories of damage: Visibility impairment, soiling and
materials damage in manufacturing, acid deposition effects, and impacts
on climate. . ' .. ;
Source: U.S. Environmental Protection Agency. Office of Policy,
Planning, and Evaluation. ' • •
B. Emissions of Sulphur Oxides • • - ,
Category of Damages
Marginal Damage
(1987$ per ton) ,
• Morbidity
Materials Damage
Crop Losses
Visibility'Losses
point estimate
upper limit
lower limit
upper
lower
point
upper
lower .
point
upper
lower
Sulfate Paniculate point
Morbidity & Soiling . upper
lower
Total
poinl
upper
lower
Lfi
63.0
0.0
40.0 .
. 73.0
' 9.0.
Lfi'
2.0
0.0
141.0
771.0
44.0
/
•454.0
703.0
236.0
637.0
1,612.5
290.0
Missing categories of damage: acid deposition effects, mortality.
impacts on climate.'
Source: Memo from John R. O'Connor, Director, Strategies and Air
Standards Division. EPA on SOj Domestic Policy Council Work Group,
Benefits Subcommittee'Analyses and Industrial E'oilerSOj. New Source
Performance Standards. -. '
September-October 1990/Challenge 35
-------
si!
winter night. Also, estimates must be built-up from
analyses of various kinds, all of which are subject to
considerable margins of error, so the confidence limits
around estimates of total damages are quite broad.
The estimates used in this study were compiled by
the.Environmental Protection Agency as part of an
effort to quantify the aggregate costs and benefits of
air quality regulation. They draw on a large and di-
verse body of regulatory analyses, cost-benefit assess-
ments, and agency-sponsored research. As the notes
in Table 1 indicate, important categories of damage
are missing. For example, contributions of sulphur
oxides to damages from acid deposition, climate
change, and premature mortality are not estimated.
EPA's best estimate for the marginal damage costs of
sulphur oxide emissions in 1987 is $637 per ton.
Corresponding figures for nitrogen oxides and partic-
ulates are'$230 and $2,550, respectively.
These figures reflect the difficulties in estimating1
nonmarket economic values, and the inadequacy of the
present state of knowledge. A price quotation for ele-
mental sulphur ($125 per ton) can easily be obtained.
Since SO2 is 50 percent sulphur by weight, sulphur
,as an unpriced output costs the economy more than
twice as much ($318 per ton) [see Table 1J. But dam-
ages are extremely difficult to ascertain and are fre-
Table 1C
C. Emissions of Nitrogen Oxides
-Category of Damages
' Marginal Damages
(1987$ per ton)
Visibility Loss
Eye and Throat
Irritation
Materials Damage
Total
point estimate
upper limit'
lower limit
point
upper
lower i
.ZLQ
115.0
36.0
118.0
283.0
OiO
upper
lower
point
upper
lower,
35.0
17.0
230.0
433.0
55.0
Miffing categories of damage; NOi chronic health effects,' non-user
effects. - ' . • -
Source: Economic Benefits ofNOi Control: Design and Applicotionfor
the Eastern United Stales.'Draft Report. Energy and Resource
Consultants, Inc., prepared for Marie Thayer, Office of Policy Analysts.
AugusllO. 1987.
quently ignored. The upper and lower bounds set
these costs imply a range of uncertainty greater than
fivefold. It is inconceivable that a price would be quoted
. for elemental sulphur as an industrial input at some-
where between $50 and $275 per ton. However, despite
the current uncertainty, the environmental costs of sul-
phur emissions are real. Ignoring these costs implies
setting their shadow prices to zero, an extremely poor
approximation. The saying, "It is better to be roughly
right than precisely wrong," surely applies here.
A pattern of progress
An index of emissions for the period 1970-85 constructed
with these weights shows mat the composition of output
in the electric utility industry indeed changed rapidly.
Emissions fell by 30 percent over the period while elec-
tricity output increased, Rgure 1, shows that kilowatt
hours per unit of emissions—a single-factor measure of
environmental productivity—rose much more rapidly
than capital, labor, or energy productivity. Since the
increasing share of nuclear plants partially accounts for
the rise in kilowatt hours per unit of emissions, and
cost of nuclear fuel rods are included in capital expendi-
Cures, comparable figures for fossil, fuel plants alone are
included in Figure 1. -They also show rapidly rising
environmental productivity. Had emissions per kilowatt
hour remained at the 1970 level,"the electric power
industry in 1985 would have emitted approximately 10
million tons of sulphur oxides more than it actually did.
. How should these improvements be incorporated
into general productivity measures, such as the multi-
factor productivity index? This index is based on an
assumed production function where output in any year
is a function of the capital, materials, and labor inputs
as well as the state of neutral technological progress in
that year. The productivity growth over time of technol-
ogy can be estimated by the difference between the
growth rates of output and an index of the inputs. Each
of the inputs in the index is weighted by the proportional
changes' in output for small proportional changes in
each of the inputs (the output elasticities). If the industry
is competitive and there are constant returns to scale,
these weights will equal the shares of the individual
factors in total costs.
If the electric utility industry produces as joint out-
puts both kilowatt hours and emissions,.then the rate of
growth of total output can be represented by a weighted
average of the growth of electricity output and emissions,
with the weights being the shares of the two in the total
36 ChallengetSepsember-October 1990
-------
value of output Since, of'course, the shadow prices of sions Estimates, maintained by EPA's Office of Air
emissions arc negative, because emissions have eco- Quality Planning and Standards. Shadow prices repre- .
nomic costs rather than benefits, the rate of change of senting marginal damage costs for these emissions were VT
emissions will appear in the multifactor productivity available only for 1987. Assumptions by which to ex-
index as a cost, with the same sign as the factor inputs, trapblate these estimates backward in time were based
Falling emissions, or even emissions that increase more - on two offsetting trends: emissions in earlier years were
slowly than electricity output, will then raise the esti- < larger, which suggests that—cither things being equal—
mated rate of productivity growth. . - their marginal damage costs per ton would have been
A more general measure of productivity growth, higher in earlier years; but population and the economy
incorporating emissions, can be shown to consist of
.the traditional productivity growth measure plus an
additional term that is the difference in growth rates
of emissions and output over time, multiplied by the
value share of emissions in total'output! Since the
weight of emissions in productivity is negative, emis-
sions that grow more slowly than electricity output
lead to a general productivity index that rises more
rapidly than the conventional one.
, The data used to calculate the conventional pro-,
ductivity index for the electric.utility industry were
compiled,by Dale Jorgenson, Frank Gollop, and Bar-
bara Fraumeni. This paper uses calculations based on
their updated figures (see For Further Reading). Their
data series represent conceptually and empirically
meticulous measurements of the underlying variables.
in earlier years were smaller, which suggests that dam-
ages incurred would have been lower.
,. In order to reflect these offsetting trends, two alter-
native assumptions were used to derive shadow prices for
emissions in earlier years: A first assumption is that they
were unchanged in real terms, and increased only in step
with inflation, measured by the.GNP price deflator. The.
alternative assumption is that they changed in proportion
to the scale of economic activity, measured by total GNP.
The alternative assumption has the effect of reducing the
contribution of environmental gain's to productivity
growth, since emissions are weighted less heavily, in
earlier years, when they were larger.
Using these shadow prices to estimate the costs of
emissions brings to light the interesting fact that the
cost of emissions as unpriced outputs of the electric
- Estimates of emissions of particulates, sulphur; and utility industry in the mid-1980s was almost as large
nitrogen'oxides from privately owned electric power as the cost of labor or fuels to the industry. Hence,.the
plants were derived from National Air Pollutant Emis-i .weight of emissions in the generalized productivity.
Figure 1 , Single Factor Productivity-Electric Utilities •
250
200
•ISO
100
50
1970 71
KWHs per unit of emissions
KWHs from fossil fuel-fired plants only
per unit of emissions
KWHs per unit of labor ' ' •
KWHs per unit of capital "
KWHs from'fossil hie! fired plants only
' per unit of fuel inputs
:72
73
74
75
76
77
78 i 79
. 80
83'
85
Sources; National Air Pollutant Emission Estimates, 1940-1988, National Air Pollutant Emission Estimates. 1940-1984, Environmental Protection
Agency. Office of Air Quality Planning and Standards. Dale Jorgenson and Barbara Fraumoii. "Productivity and U.S. Economic Growth: 1979-1985'
forthcoming'. Journal of Productivity Analysis. . ' ' '.'
September-October 19901 Challenge
-------
index is nearly equal to that of.labor (or of fuels).
Yet, even though labor productivity is the total
concern of an" entire office of the Bureau of Labor
Statistics, there is no attempt by the U.S. government
to measure environmental productivity, even for the
single industry at the center of environmental policy
deliberations for two decades. Consequently, we are
•hobbled by a lack' of information on emissions and
their economic costs. More seriously, since the De-
partment of Commerce regularly publishes informa-
tion on pollution abatement costs, evaluations of the
economic consequences of environmental policies are
usually one-sided, dwelling on the costs of environ-
mental controls but not the resulting gains.
Table 2 compares a conventional measure of multi-
factor productivity with our generalized measure. The
conventional index, in the first column, takes kilowatt
hours as the sole output and labor, capital, and .fuels as
inputs. The more general indices include emissions as a
joint output of die electric utility industry. Index A was
calculated on the assumption that the marginal damages
of emissions were constant in real terms over time. Index ;
B was calculated on the assumption that marginal dam-
ages grew at the same rate as GNR Estimates are shown
separately for the periooV1971-79 and 1980-85.
Table 2
Estimates of Multifactor Productivity in the
Eiectric Power Sector
Period
Conventional Incorporating Emissions
Measure x Index A . Index 6
(percent/year) (percent/year) (percent/year)
1971-85
1971-79
1980-85 • ;
-0.38
-1.10 '
0.69
0.62
0.26
- 1.17
0.33'
-0.18
1.10
Sources: National Air Pollutant Emission ". -
Estimates, 1940-1988. National Air Pollutant Emission
Estimates, 1940-1984, Environmental Protection Agency, Office of Air
Quality Planning and Standards. Dale Jorgenson and Barbara ,
Fraumeni, "Productivity and US. Economic Growth: 1979-1985-'.
forthcoming: Journal of Productivity Analysis.
, Two conclusions stand out: (1) When estimated by
conventional measures, productivity seemed to de-
cline substantially over this period. However, when
progress in reducing economically damaging emis-
sions is taken into account, it is evident that produc-
tivity actually grew at a rate between 0.33 and 0.62
percent per year. (2) The positive contribution of
reduced emissions to the rate of productivity growthP
as estimated in this study, is at least as large as the
negative impact of environmental regulation on pro-
ductivity found by Gollop and Roberts. When all the
benefits and costs of environmental protection are
taken into account, the conclusion that regulation has
decreased productivity in the electric utility industry'
can no longer be asserted with any confidence.
Although this is a very preliminary exploration, it
nonetheless suggests several conclusions:
First, -technologies that reduce environmental
damages contribute to economic productivity, even
though they are not costless to install or to operate.
, Since a general index of productivity gain would
measure the extent to which materials and energy
flowing through the economy are transformed in ways
that increase their economic value or reduce their
economic costs, ignoring technological changes that
reduce the volume or harmfulness of emissions into
the environment misses an important dimension of
productivity improvement.
Second, it is important to measure the environmen-
tal dimension of productivity, even though it is imper-j
fectly reflected in market transactions, in order to avoid
one-sided assessments of technological alternatives and
policy options. The belief, supported by several studies,
that environmental regulations have lowered the rate of
productivity growth in the U.S. economy, may be an
example of such a misleading assessment.
Third, much more effort is required to establish
the information base on which to measure environ-
mental productivity adequately for major industries
and sectors of the economy. Consistent and complete •
time series on emissions by substance and media are
not available for 'most industries. Data on natural
resource input use, while more adequate, are also
incomplete for most industries; Even more deficient
are estimates of the economic damages attributable to
* resource use and the discharge of residuals into the
environment. Research and data collection efforts to
date have been scanty and fragmented.
Fourth, serious consideration is warranted for pol-
icy and institutipnalchanges that establish market val-
uations for environmental damages and improvements.
Such mechanisms include marketable pollution rights.
They also include charges for the'use of natural re-
sources in the public domain, and clear assignment of
liability for damages to polluting sources so that insur-
ance markets can develop and market valuations of
environmental risks can be established.
3S Challenge/Sepiember-Ociober 1990
-------
V-
COLLOQUIUM ON SUOTAINABELnY DEVELOPMENT
-''..' '.'•.•:.''. '..'•• "'"'. 1NTHEU.S. .^'.'- /'/. - V-' : :/C,
SERIES 1: COLLOQUIUM ON ECONOMICS, ECOLOGY AND
SUSTAINABILrry POLICIES „
INVTIATIONIIST;^ ;•
Ms. Teny D'Addio ; - V . > '
• U5. Department of Agriculture - < r: .
Natural Resoorces & Environment .
14th & Independence Aw, SW, Rm. 271E
Washington,DC 20250 i , ; •'.".;-
^^hristine Augustyniak for •/:'; ;: / :
Lynn Goldman ' ••-•.•; . >''\:
Assistant AdmJnkfrntnr for Prevention, "._
.' Pesticides and Toxic Substances \ ... . •*•'
U.S.. Environmental Protection Agency •"'
401M Street, SW, NLC 7101 . t, .
. Washmgton, DC 20460 ": ";.•>., . :
• . - . '•. ,.' • ". • ,-•" .. '• •
Wayne S; Balta, Director. . •;•--• .;
Corporate Environmental Programs . ' .V
EBM Corporation .' ' ,0: -1; .
' Building 2/MD#2393 :- 4 '• -P. ! ;;; V
Roote 1000, PO Box 100 , V ., "^ v!;.
Somets, NY 10589-0100 _.> ^C IA^X;. 'V
SusanBayh '- '.\\ '"" '"••' "'"•-'>'.-'-
. Commissioner, United States Ssction1',-'•;*
. International Joint Commission ." .-, •..v/, '
" 1250 23rd Street; NW, Suite 100 '\ J"*%
Washington,D.C20440 *'•-/-'i " \,r
• •"" . ^t . - • - , • ,..;v ...— .- ' '....'" -'
Chair, Wildlife Program " "%. 3 . r
Environmental Defense Fend ''°':'-.",'.-•
1875 Connecticut Ave, NW, Suite 1016'
Washington; DC 20009^, •'«.- " >?
. - -i-U. -'...; • •" "V *;*,;' „"' ~* -'•'• -
. Dr.NancyETBoc^tael C ',-•'*•-.':&.£
. Department of Agriculture and-' '''-; sV
^ . Resource Economics ." -.": .-• -;. s>v *:.-. »_'
.University of Maryland:"^ *~ •???;.••':'.•".' ^
. College Park, MD 20742 o j_ v V ?
. 'J >Cnrtis Bohlen, . • :':' V • ::' > .."".
ixr Chesapeake Biological Laboratory
University of Maryland .," --i. -:';-. •;
^^••^••^^•^^•"^::: '
:'-^'.:~:^"§i^^f--..
•v
'• -K."
Cabefl Brand,
,, Recovery Systems
7 PO Box 429
r/_ Salem, VA24135
.. Ken Brown 7: . '
' . • Renew America.' '- ,-•_.'" "' ''y. -
•'•'.-' 1400 16th St., Suite 1710,,-. iv- '.;
•: \ Washington, DC20036 ,\ . -.'^'. '•'"'*'?' :'.-i
'.' -^ j Eetei- Brown:""»» -.. ",- •>•/' --'",. > .
: V "^School of Public AfEans' . .. ,,v ; , .' ;..
;•,.', University of Maryland;.'. . -'-. ......,- t.;
"'.-.;-/': ^ Coflege Part MD; 20742 ;' -'.;-/ -\f'..'.'"; ;
';•../ Marjorie Buckhohz '--. .' ': ' -. ' .V / ^ '
'.'•'• U^. Environmental Protection. Agency -^ " „ '
, • -r.. 401M Street, SW , -; .. '• ;•-?';<•' 'v
,.- •V;'-.'* ,; Washington, DC 20460 V; . • .--. /"'/•
Jebn BuUard, Director , V .,•:••;'"••• ;.
"•••<' . i-**\ Office of Sustainable Development i" ' '••'••".. •'
"•: . NOAA Department of Commerce 'f ,v ..-. '
.' - ?'l4rh&ConstkutionAve,NW,Rm.;a22 f .'., .
''•";"••;:• Washington, DC 20230' - '.„-; '"•* .. . ^ - . '•"
•''"'•.•',•- '' »' '. . ""•.". •""-'-
»•*'•• ._"'.•,. 'j % ',.* •' . >v '">• -. , •• .. • . •„"•."
'.' }'•' .1',' Dr. Truly Cameron f~^ ;.- \ ,;^- ."l^.---^--* ^•'i
r !/•' •'•. Professor, Department of Economics/; ^.:'''-
'.. .- . .-,'. :: University of California .. .. : -:" •"- ; !./., '.v- - - 4. - ,
">>,.- ; •/ .'.'. 405 HngardAvenne/ : .'-,-. vV. .>'_."/' ~-; / -/ _>
S,. : Los.Angeies, CA-90024 .- ,L *;"•-;v ;^;1; ,.'.
i i ^Jonathan Cannon '. .'• "'.' .*'• •'• ~- '- '"•_.
r.- f^ Asst. Administrator for Administration v • .
•"••'••'. ./: and Resource Management . -•. ;-'••.,
. V -: . UJS. Environmental Protection Agency
;'. -/; ." /401M Street, SW; MC. 3101 . A - , ' '•(-
,./'-•"-, ;•;.. Washington, DC 20460 t ,'"'".-. ';' '• _'
• . * •"i- ' '••.'' ' * ' ' .*•-'?"•"" *-:"? ' " • '*" ^ *'•'*. . ', -. *"'
* - ' .• ^ * " * , * ." -^ "•-'' v ,.-,'*'".; ' * ' * , "?*• , ,
t .• •.•• '• - "• '" ' . , .T *; l' '» , ' ,;. *r» . ..--* ~..i * ,
-- • ' - -•' ' ' - ' . ., ' -A
-------
Mac Chapin, Director '. "•"";-;
Center for this Support of Native Lands
1101 North Highland SL-.'"'
Arlington, VA 22201-2854 •;
David Chittick " :'!.v "* ',.
46 Woods Had ;" • '. . .
Basking Ridge, NI 07920
-* ' * *' \ . - * - •?- •.
Mr. Roan Conrad " • . ' .' ,,. ,.
Department of Commerce :.-'?' '•
Office of Policy & Strategic Planning
14th & Comtitntibn Ave^ NW, Rm. 5222
Washington,DC 20230 "' - , -
Richard Conway '~-"T ' .
Union Carbide
(304) 747-4016 \ .
WaBam Cooper "' ]•< '
Michigan State University
(517) 353-6469 ,; .
Senior Associate .
Global Tomorrow Coalition
1325 G St,NW Suite 1010 '.
Washington, DC 20005-3104
George Cowan =' ' ' >"
Santa Fe Institote •••..
1399 Hyde Park Road ';-
Sanb Fe, NM 87501
Dr. Maoreea L. Cropper ' •''
The World Bank' (JSMOG31)
181S H Street, NW v
Washington; DC 20433 •". t
Crossbn •"-- • •'. • ;.'" /\v5.> */•
Resources for the Future, v, , . , .--..-. •/'•
1616 F Street;NW'.' ^- ^'.\ -. .^'" „-"
Washington, DC"20036 '' •!.'}, J;' y- •''
• '•' i -'•• ~ *--•-.;"" ~' ~^ ' •?
'.JJfjjin Dabsoo, President , - .' • •*'' * ;
•Corporation for Enterprise Development
777 N: Capitol SL, NE, Suite 801 . 'vv
Washington,D.C20002 .-/: x =• ; .
Herman Daly. ' , •'•'•' .-7 . .•
Universily of Maryland -•"• -^
Business-aiod Management "' "^ '• ' • *
Building,039, Room 3135 J " ,
CoUege Park, MD 20742 ; >. .: ...;
Davis ,\ - .. •• ',
. Environmental Protection Agency
401M Street, SW
Washington, DC 20460 . ,
Wflma Delaney ' , " .'•••'•.
The DOW Chemical Company •
1776 Eye Street, NW, Suite 575 *
Washington, D.C. 20006 ' ;
Bob Dennis, President v. .
Piedmont Environment Council
45 Porter SL
Warrenton, VA 22156 .-.-'-'- . ~ . • '
: Joanne penworth, President
Pennsylvania Environmental Council '
1211 Chestnut SL, Snile 900 :
Phfladelplua, PA 19107
Roger Dower. '•->•'.' :.> . ^
Program Director • ," -- ; .. '.
' Climate Energy and Pollution. -• ,' '.
World Resources Institute ' '
1709 New York Ave. NW, .:."'•• -: •
•' Washington, DC 20006 ~;. } ,'.-'
. / '• ' - ^ ^' -\' .' " '." • ,' - "'•.*
DavidDownes s •• - ' '- '.'' '.":.
1621 Connecticut Avenne, NW
'•• Suite200 .... "•/, - *&•,; ;- I-':*
Washington, DC 20009! :
.. ' ' ' „ • ' ",' ~
Brace F. Droste, President
Second Nature : - -»;
17 Monsegnipr C^Brien. Highway'
PO Box 410350 . . . .
. Cambridge, MA 02141-0004; . ;-
• Lynn Edgerton, Member " ; .
California Air Board ;. • • --. •-••
. 400 S. Plymouth Blyi v -, .
Los Angles. CA 90020,f .
M-Eichbaum' .''*..'•',. •-' •'-
Vice President: . •••"-''.' ' ' -•
International Environmental Quality
World Wfldlife Fund ... ' . : .
1250 24th SL, NW • .:.:' :. . > .
Washington. DC 20037 .- V;; -.-.- ;.-.-".
-------
V.-;
- Mohamed T. El-Ashry : ,
World Bank-Environment Department'
1818 H Street, NW, Room S5055
Washington, DC 20036 ""-
1 • • . "." '
Christine Ensris ' ' . • ",..
Department of Commerce: • s "
Office of Polcy&" Strategic Planning '
14th & Constitution Ave., NW, Rm- 5222
Washington, DC 20230 -
Brodc Evans ., , _
Vice President, National Issues-v;. "•' , •
National Audubon Society' ... \!'
66 Pcnnsylvama Ave_,SE' - '• >, . .
Washington, DC 20003 ' -*: -: . '•'-'
' • - - * . • .. tf
Harry Fatkin - \ ". :
Director, Health, Safety &. Environment '
Polaroid Corporation lV • " < '
575 Technology Sq. -,1A -; / : .
Cambridge, MA 02139 . ':
RobFischman ' ;; •,
Indiana Unhrersity Law School -:*;.' V ,
Bloomington, BST 47405j I -; ! ?
Erin Fiizsimmoos, Editor
BNA- ;•-• '•.-.••.:.•*'*.-•: >,."'.--.
123125th SL NW, N463 .- ; W V ,;
. Washiagton, DC 20036 ." ,' j , " .
pirkFofristtx •' ••-',/.•..;- - .••^.^-'''"'•-'.
\ US. Department of Energy ; , -
1000 independence Ave, SW -; , . - .;."I
RoomTB-222 /. •>.'_ ... ''^.-•'•"*'Sv"-^'
'.Washington, DC 20585'-^'-:':-:••• ^-t(\, ^
... ..
DouglasFoy' •; '^ ,' , >
' Executive Director.." ;.;4 * .--
• Conservation Law Foundation
62 Summer ^^':''\,~y^\::-
Boston, MA 02110
'
Center for. Creation Spiriruality ,_/
. P.O. Box 15216 •: -.;' • . v.'^A^'.
Oakland, CA 94619 V, ^V*s.'- V
. Dick Frandsen, Counsel j'
' House Energy & Commerce Committee - V ""
'. 2125 Raybum House Office Building
Washington, DC 20515-6115 . »^: ^ ' ;-
.. JerryGaregnani . .,•
, Application CIESN Manager.'. ,'
NASA's Mission to Planet Earth'
NASA Mafl Code YDA
Washington, DC 20546-0001
:.,:, ,Lloyd M. Garrison, Director :
..,; . Office of Cominxniications
The Ford Foundation
, 320 East 43rd Street !
'; New York, NY 10017. ' . -•;' "
i. Robert Goodland . I ;
Lxrorest Ecologist - -' -; '-• .; ^' '-••
. World Bank ' ' , - .:.-.'.,
•- . • 181SHSLNW " ,.- ' -
Washington,.DC 20433 •",
.1 .- •*.•
•' Kelly Green f'^y '. ;'
Land & Warer Fund-/
2260 Baseline Road, Suite 200
Boulder, CO.80302 .
Ralpb Grossi, President .
American Farmland Trust
1920 N St, NW Suite 400 •
. Washington, DC 20036 / ; .
Grumbles.
-/,;.;j
• • _-"3!
- ;C'*'?^
• ..' -;' K~
•::-.'il
Resources & Environment'
2165 Raybum HOB - . i
Washington, D.C120515 . .,
____ Guerrero, Director \'.•_.
General Accounting OfEcc" " /
Environmental Protection Issues'
441 G SL NW, RM 1842
Washington, DC 20548 .
FrcdHanseQ':.'; .i '" .. -;,: ,;;.."-
Deputy Administrator . -.'-:"• ' ' ••"*• /•";-;
• U^. Environmental Protection Agency •
401 M Street, SW, MJS. 1102 ,. . -. ; •.M -
Washington, DC 20460 r "!.'/';. ''•.
^ ijdce Hanson . "•*•"' •*_- '-''".r,'".".•'.'" ••
Assistant General Secretary ^!.'; v ''-..^
United Methodist Board of ,! f •
Chnrch & Society ' *. v..' * .'
GBCS 100 Maryland Ave, NE, Suite 211
Washington, DC 20002' -.• v'
., A* '^.v
-•j *» > 'j-ff
.-'•'•'. -1'.",
- * ^r~'
. •*?
. <.:
-------
1 •*';«**
Nancy.Hargrave] ~":. -.•.;- .. ....•/
Director of Engineering Development ,
National Academy of Sciences :
2101 Constitution' Ave, NW
Washington, DC 20418
Mart Harwell
Rosenstiel School of Marine and
Atmospheric Sciences ,
University of Miami, " - ,
4600 Rkkenbadcer Causeway,
Miami, FL 331491
PaulHawken
C/O HaperCoflins
M East 53rd Street
New York, NY 10022
David Harwood
Department of State
2201C Street, NW, Rm. 7250
Washington, DC
20520
Steven Herman
Asst. Administrator for Enforcement
dud Compliance Assurance .",'- : •*"•
U-S. Environmental Protection- Agency
401 M Street, SW, M.C. 2211* ?,.'.•':
Washington, DCJ 20460 "_,;. / .:.'/;/
" Patricia Hill
Georgia-Pacific Corporation
1575EyeStreetjNW ..-'*. " ,
: Suite775 ... :~\._ V V-*.' . C.'-"-- -':"
Washington,-DC 20006 ^ -'„>.•
Ralph Horowitz] !_•• -^r •'-*"
Environmental Journalist, '-."•";•' ~;'-,
• Austin American'Staresmen !• ?r;,?, .-•
,POBox670. t .- -. ]-;.. .. ../' :':- ;:
Austin, TX 78767 :v.;.'' . '•. '•. •-£" •"
Larry Hocrde, Professor ;• ' .•'_ .
George Washington Law School •«, ;j
720 20th SL, NW, Room S414 " -^ l^
Washington, DC 20052 ''•' C
Robert Hnggett| ;• • • -.: ;• •*- ; ' :,' ^
•' Asst Administrator for Prevention,' '
Pesticides andlToxic Substances '.''__
.U5. Environmental Protection Agency .
401 M Stree^ SJT, M.C.' 7101. --, •
Washington, DG 20460 /- :;: • '
Mr! Jeflrey Hunker - ' :
. Department of Commerce
Office of Policy & Strategic. Planning
14th & Constitotioa Ave, NW, Rm. 5415
Washmgton, DC 20230
Dayid Hunter, Senior Attorney -.
^ •-
for International . - '••'•'.
Environmental Law.
, 1621 Connecticut Ave, Suite 200
Washington, DC 20009 • . . ,, • '•-;
. Thomas Jorling • ,'.''•"
• t Vice President, Environmental Affairs .
International Paper •'.'.'', . ,• .. '.'
ZManhattanvine'Road '
Purchase, NY 10577 . ; . ' ;
» , >•' . p - • , S:
.,; Stephen Kass :, . ." ').-
-,< 2 Wall'Street - • ' '"
Carter Ledyard & MHborn. .
.. V New York, NY 10005
Dr. ADen V. Kneese / -, /. -
Resources for the Future , , -
. V 1616 P Street, NW :.- . - - ' . , .
: Washington, DC 20036 '
'• \* - .' . • ' ' '
Ms-GlynnKcy , ,;' ; , •
: OflSce of the Secretary .' " ;
' Department of the Interior
: 1849 C Street, NW, M^. 622? , 1
Washington, DC 20240 '
'• ': ' . '.' ••".-.
is King " ..-;. ' - '". .'
& Associates.. " "-".. , ,
1616PSLNW ' ..-.' !
Washington, DA 20036 ; .. ,
Kheryn KLubnikin •'•.••'-'.' '•,-,
StaffEcologist . -
Forest Environment Research ' • T
U^J5-A. Forest Service . .
P.O. Box96090 - •' - .
WasHngron, DC 20090-6090 .-,
\ Dr. Charles D. Kolstad -
Professor, Department of Economics <
: Univcrsily of California - ' . ' •'
Santa Barbara, CA 93106 , .
• Margrct BMtz ' - '
Staff Correspondent, -t
National Journal lac;. .
Washington, PC 20036 .
: ».- K- •, '-
- '. ':-. .-• .e--. '• '
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y J^' A •> - *' ''
AHen Krupnick '•">•—
Senior Fellow '' • '- ••.,., '
Quality of Environment Division '" • ,-.
Resources For the Future ».; ' •-'
1616PSL,NW
Washington, DC 20036 , • •'
,. ' ' • "'•."':'-'
.-.- •'•••- , "..',''. t. f
John S. Larsea
Vice President-Office of the Environment
. Weyerhanser Company .<-•/' •
M/SCH1L28 -
Tacomai WA 98477 ::- ' ;/; '
Keith Langhlln '•
Associate Director for--
Sustainable Development '•-,-.,.';..
Office of Environmental Policy " ;;'
. Rm. 360, Old Executive Office Building <.;
Washington, DC 20501. ,
Asst. Administrator for Solid Waste ';'•'', ,~
v and Emergency Response • • ;.. '"!..i•.'•.'•' •'*
U.S. Environmental Protection Agpicyj <-. •: '-
401M Street, SW, M.C 5101 : ~ ; ;;: 7
Washington, DC 20460. l yr "
;JeflBr^LewiS-r:-^V^;-" >';..>"•'.; '. ^V.,7.
Executive-Director • r^;-'"; '".-".'iy.,--..~,' [ :"-/-. ::i^
Heinz Endowment, --•' :~~f'''<~\ ''-'x.t.-.^'•'"'.'"
1201 Pennsylvania Aye^ NW, Suite 619 *:' ?• '
^ashmgton,DC200b4:--/.. .".^•••".-•^'^M:~':\
Dr. Morton Lippmann '- •. r, .^'/•"•.. "•• •,-
Professor, Dept^of Environmental Medicine ';
: New York Unrversity:\.,:./TJ;:;^>'-,v-,
AJ. Lanza Lab " v' " "
Tuxedo, NY 10987."-'^\. M^~^"^ /v
'-. . s, '.'". (-:'rl-v':-?';-^i.-:-^. ^-^•••••..Sf-'?. •- :
; Snowmass, CO 81654 'ny
•"; ',--"'•''' "••'"-. - ,.~; ;'^~s^>.':--5-jl 'v.-»n'. >r'^l •'-
-Gregtow '>^1;WU'^-. ^W "•
-Director of Major Program Development .--
-The Natoie Coaservancy^^/';:/.3', ^ V.»:^.;-:
•: 1815 R Lyna St. .;.>>•» :• '-.^ *O ? r "^-l-'
: Arlington, VA22209 .'y\^^>i :^..U'''
-v-~ ,: •: •:". ';-v .:-".• -^-.'S •<^- -•.' ,-T..."'
.';./. ; •>?'• ".';V ,. .-'^; v-.--:- -'.V*?-'- ", r;'^>r,
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.•" -.'''.>• • ••.' '"v^-, •: '•':*• -• .,*-.
Nancy Maynardv '••'?•', '• '«f ..
Deputy Director ," - "' -
NASA's Mission to Planet Earth
NASA Mafl Code YDA .
Washington, DC 20546-0001 "-.
Debbie Kslso McArthur '••_•"
'Executive Assistant ( ,r... '•
Office of Lc Gov. Beyer . ..'•,..
:V.P •'• <*. .^r. .._ •-•:-• - -. v"." ••y-o'.
S;7 >.-"'"'••'.' '•£$L'f*''' T-A/X;"•/; -.J;^-""'.
Supreme .Coort Building
Richmond, VA.23220, ^', \ ^'c v
Gerald McCarthy ~' .
Executive Director . ' -- -."• '•
. Virginia Hnvironmental Endowment
POBox790. - . .
Richmond, VA 23206XJ790 - > ;
. - _, • .. • ', • . _ :. j> ,
Dr. John McCarthy:. .'; "•)_ ";
Professor of Computer Science;
• Stanford University, .*•...-'•>.;;•"
Computer Science Department " €
Stanford, CA 94305 . ^.] vT'^
'' , "^ i- ' ' •*• .* ' "J ' "*' ." " 'i">*-*''
Dr. Roger McCIdlan r'J; v ^
Chemical Indnstry.Institnte of .:",
: Toxicology ' :^ ••'..-'• -;;::T,jcv;
. P.O. BOX 12137 :X;. V^":''1'"-;
Research Triangle Parkj NC 27709
^';,i
1-;;-Vi
"S'•..••*.
•^.^y
' wnilam 1
Wiffiam'.
410 East Water Street, Suite 700 ;«-f
Oiarlottesvule, VA 22902'" ^?t ^':
'../ .-.-••."''•-. ~'^A''-'?'*&&^$'\,
: .Andrew McElwalne, Program Officer
Heinz Endowment
• 30 CNG Tower ';'^
- - 625 Libcr^ Ave-./ -i
5'-:>->•'" .••'•'"-''•*• •"
" ':'
U5. Environmental Protection Agency : r- J . ^(
4Q1 M Street, SW '•'•'^,-V.. ;^v'>-" :'"V-~. ;^"
Washington,.DC 20460'; \ -C'!$?:',.^. ;' ;.-,>.
•-i- '' --^-"''• ,:^•'-:''- ^-'--l-'--1'/'-•?•.-.'• i •"''"
JeraldT.McNea ;: '?'.->'''' '*:-:';:•'^.;--V ;•-'{
Director of Environmental Prograins.^ ^" ;. tf
Nationai Associadoa of Coonties ^.'.,**-V. .'.";,;
440 1st Street, NW '• .''•;'. . '-,<^? VvV'?: \.' ; •"•
Washington^.DC. 20001 •_ ^vff^T ^;* ""^ *:; '
P'tedmont Environment Coimcili
45 Porter St. .V ' jv,";:s -;- 'V-.
: Warrenton, -VA 22186 -? V''- • ;
'•
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/Millet ,/7 ;..;-•_ ,"-;•-./ • -, •
ources for the Future
1616 P Street, NW ,, . -^ . .
Washington, DC 20036 . ; "' ,,, .
Tim Mohin •-'.'."
Professional Staff Member, , ' /
Senator Bancus's staff " .-.-..'... '•
Environment & Public Works Committee
SH-415, Hart Senate Office Building
Washington, DC 20515 <' .
<• ' • - .". . -' •"" . - •' ' •
Richard Moore, Executive Director '';•; :
' Southwest Network for Environmental •'-'
& Economic Jnstice •••.-,. .'. ."
P.O. BOX 7399 -;'-- •;' '£•".}
Albuquerque, NM 87194-7399 V ;.:'
Frank Munyon, Attorney ": .;.;/ ,. ._.'_•
Office of Legislative Service . • '«'• ^ •-';!, .;
Virginia Assembly ' , _••. r.-.V*' \-
General Assembly Building ., *. . "4
910 Capital Bmldhig, 2nd floor. ' v -' •'• ;
Richmond, VA 23219 • . *v
- ' " • • . . " ' " v '''••••*;'' '•
• >. ' ••-••'..'. - -, t :• ''. . -•
- Daniel Newion, Economics . ;v,' f. .'•-. '
National Science Foundation1'. ;' ••'.. ,. '
. 4201 Wpson Bhd^ Rm 995 '.?... " ,VT rs; '
Arlington, VA 22230 •'.';;>: •1;£. • "
• s .-. ;i -'•-".' '""'; ~ •' "' ..
• t; - - - I. ^\ , , , ' •- - .,
! Mary Nichols- •/••"; '•'"•-. ''-; •_..'"
- AssC Administrator for Air and Radiation
U^. Environmental Protection Agency
401M Street, SW, M.CL 6101.
Washington, DC 20460" , > ~ ,'"
TheodorePanayoton '.••'. "* •
Economist, Harvard Institute for ':
Intcrnatiooal Development
1 EOot SL . . • •
Cambridge, MA 01238
.Lee Paddock " , . ' "
Director of Enviroumcntal PoEcy.
Office of the Attorney General
102 State Capitol
SL Pad, MN 55155 ; ' : '
Robert Peraasepe
Asst Administrator for Water
U.S. Environmental ProtecrioB Agency
, 401 M Street, SW, M.C 4101
' Washington, DC 20460 -> -\.
. John Pezzy . v
U^tJniversity College London . ' '
*-""." ' d. "
'• Michael A. Kerle . -• '. :
Corporate Vice President " ^ ". ':
Environment, Health and Safety .' •
'. . Monsanto Company, Mail Code DIR
800 North Lindbergh BiwL ; , . -
'••-'• St Lpois, MO 63167 •••'.." .V *
'•' '.& •:.''. •} ''-' ,'';'"-''•' '^-~:••','..'.••
Dr. Paul R. Portney " .
- Resources for the Future /
".. ' 1616 P Street, NW V .":. . ":;<..
Washington, DC 20036 . .
Dr. William Nordhaos
: Professor, Department of Economies'
Yale University'; _ : ' , .-• ^
28 Hmhouse Avetme^. . •.:.-- .4- : :;
NewHavisn,CT "'''
USS.Seith Avcnuc-^x ."-'"; ^ ' ,'...
Berkeley, CA 94708 f";: '/•?;':, •':,\>'.!
MoricNowak * ':: ; ..iv'* :^.'/"'.'-
Execotwe Director ..>'•• '•v '-
Popnlation-Enyironment Balance.
1325 G St, NW, Suite 1003 • %)
•WasUngton, DC 20005 V^;.";.;'. r>;
' TSlbotPage '-'.•-•..'•tv-|">-'.'"]." ';, .'••>,„.•>•'-': -
U/Departinent of Economics ' ;. /-.•',- • :; .
Brown University'; *.';,. .-.-^^: ••/>".-V"^v
Providence, Rl 02912 . ^_.,'•'_ V ;: :.', -' i
Junmie Powell •* . r
Professional Staff -. ;^
Committee on Environment & ' ..
. Public Works:
407 Senate Hart Building " ~ •
Washington, D.C 20510 . .
'.»••', *
Ann Powers • . ;- • :''..'
Vice President/General Counsel -
Chesapeake Bay Foondalion. .
. 162 Prince George St. s .
. Annapolis, MD 21401 • •' .
Katherinc Ransel •'.."- -'..",.
Co-Director > . '; - ..;..-''•
American Rivers ' • ;- . ' .
. 4518 University Way, NE, Suite 312,
Seattle, WA 98155 . • •
. "- ' . •'J '
•r ' . '" -» '
' JoyceRechtschaffen. ' -' v•'',,-'
• Legislative Counsel " ' : .
Office of Senator liebennan
502 Hart Senate Buildmg r -
Washington, DC 20510 / .
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,/
DaveRejeskt •• V;.; *•' •""'-%.•'•. -..",-'. •
Agency Representative /.:• ''<• ,'."
Office Science and Technology PoGcy
Room 437, Old Executive Office Building
17th St and Pennsylvania Ave,' NW ,. .
Washington, DC, 20500, -^-^ ' - >
" '-• ••. .'...-. .-'-•.•.-.' ,-•'-.-'.
, Ken Ringle •' ' _' • •' .'.".' V;; . ;"-:
Washington Post Staff Writer ; ;' ;.
•c/o Style Section • . '•.:;* -,-.-.
. 1150 15thSt,NW " -V"-vr '••• '.;.....%'
Washington. DC 20515 "•'"' '
1 _»,«---QT-....^ _ ^ ^^ ,. _ " -, J ^ > ,W.
.Nicolas Robinson , \; - , v; : >.
•<•• Center fof Environmental Legal Studies *;*
. Pace University School of Law .": :, "'•''?^..
78 North Broadway SL .;.;,-" -:.;':'i*:-*-&
. White Plains, NY 10603 . ;o :;'^" ?*•
:. . ~ '•'-..'• .T'.' :,' '; ' :-'^.-!v:""i '•'. :-«v "•,'
AmRothe. -.: ••^.^' T • -;•''.••'.,''^'-^-'
EiBcnrivB Director ••. , . :'•' I; ^ "t'
Trustees for Alaska ;•. ;'•";.'.: ",,Cii-^'' ••
. 725 Christensen Dr. Suite 4,:;.;' v i \:,{: '!
Anchorage, AL99501 ;^t;*,j. rf;V.--S.; -*
".'• ••' ' ''"'.•„". .-" '•'• --''•-., "'-i-'.i'^"-*--^
; Susi'Ruhl, President' v^/'^-^rb'V^
Larry Schwrager, Vice President :; ;"'
National Wildlife Federation •_> -
1400 lob SL NW >••••.„•' , • '"\ •;;
Washington, DC 20036 V" .,; •
Kathy Sessions . •••' •-. * ._ • - '. ^.; •'.•••"•,
U.N. Association of the'tlSj\. \ ^
1010 Vermont Avenue, NW, Suite 904 .; '
Waidiington, DC 20005 .
tp Shabacoff
Greenwire .'-;"".i-'v'- - *,
282 N. Washington Sf!
Falls i
: "'• Dr. Mark L. Shaffer > ' . vi-' '•
• ...V Director of Heritage Programs
The Nature COnservancy
:--.. 1815 North Lynn Street^?::;
; ArEngton, VAV22209 :"y V'-"•..
rm Sheldon... *;->: ; -*
" Vermont Law School; :;.
'
, .
':;,'.• :^''''"-^-:IA::--.*' '>^
.-.. .'/./:•:•;. :'•*••:•••--•'-•-:;*
. Foundation
1115 Gadsdea St.'
'J. Tallahassee, FL32303-6327:-
Vexnon Ruttan ;• y-' •. -j . ;>~.••^-:'.v""; ^ '•
Agricoltural Economist'..;. ;T . :•.--,.-:•_ •&•-.,
Unnersity-of Minnesota i ,;5^'V':;~/'V;-;.^
Classroom Office Building, Rm 332 C < '•;';
1994 Buford Avenue * • ••'<~:\i T.'..-. ^ ? ;
yvSL Paul, MN55108^. -J^g^^y;-^;
if^-
tor, Biodwcisty'Support Program^; ^
"Vic Sheir, President. :--!: •• ' ""
Sierra dub Legal Defense Fund
ISO Montgomery St, #1400. : .
San Francisco, CA 94202-4209-:-
,. Steven
Staff Director/Chief Counsel
0 Senate Committee on Environ
:" , .and Public Works ' .".-• ••'- •?--'^>-^V^;^'^f.^&^
, SD-407 Hart Senate Office Bufldm&.NE. -V.'^.Ct-' ^'••^~''^l
''-. Washington,D.C. 2Q51D ; • ,'./,.; i-'»'•• ^'^ f'-^^Jf^
' - " : L v-:-v;v:_;!- .-y v-rv:.va r ;-^f/^•••:;:^^%:l;f v|
hogren • _. •^^::V^-.;^3-iV^:^..^-.;.:^i-r^"--i
BCspepartmenf;;'.-?4-.>,v:V'.-i'..[^ > v^-;;.;-•": ;-^-^ ^
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/World WiWEfe Foimdadoav ?•,.-;r
t. .. *" _-.. . .. - w>j • '•
r- President; _•
' Defenders of WfldUfe ,X.;
-.Washington,-DC
- ^^
:Room E52-456
Cambridge, MA
Department of Economies';.- '".^t-,.1-/.''j^-?;.-/'•'.'• .'-
Duke Unwersiry' ,;v, -,-'-:' '": •".*;,.. ^ ' -3< ';
Dnirham, NC 27708^ ::'; •'',';> '^-J.^A, ' ^
!. Velma Smith "V'^jV^ '.'.':4;'-'%"-' ..*••%'• ' y-.'
Executive Director
•Dr. Richard Schmalehsee
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Bffl Snape , '." • .>>•••' .'••"'. •'.-••
/Defendersofwndlife "^ . ,
' r . ." "' ,' •
Robert Stavins, Economist - V
Kennedy School of Government'
Harvard University .':'"•*';
"Cambridge, MA 02138 .. ' :'-.
Bernice Steinhardt . " '.',-•'•'•.
Associate Director •". -
GcMcralAccbutiiaig Office " ?'-.
Environmental Protection Issues - ' ",
Ul Massachusetts Ave. NW, RM 201 - '
Washington, DC 20001 v
""• « • " - '. i •' " l *
WuBamSteOe ••'". ,' •/.-'•.
Director, Northwest Repon , • -1
National Marines Fisheries . .
7600 Sand Point Way, NE .. ;
Seattle, WA 981JL5 . . ; .;•'• ^
W^JRpss Stevens, in . * . : . •
x^nager, Corporate Issues '?, •"•:". ;
DuPont External Affairs ;.. .. . ,:
1007 Market SL (N-9523) ' :: - ,
Wflmington, DE 19898 _ ' .
'• ^ - ."••
Susan Stranahan -•" , • •' •__ .. /•• . ''.: ;
Staff Writer' ':-' '-.' -.'J-, •'-:v,v ;<-'" .-
PhHadelphia Enquirer .-_, ,:\ ..
.PO 8ox8263 .-:• , V ^ : >
Philadelphia, PA 19101 -I .';?M' .
Doreea Turnbo ' • . '••-'•• ! "•. • "• ^
Education Coordinator, Water Resources
. Delaware Department of Natural Resources
. 89 Kings Highway ^ . .'•;;,
.Dover, DE 19901 • " . :. . Y
' Jack Vanderryn - -. " 't ' ''"'.;•
/pVogram Director for th* Environment ' .
The Moriah Fund .':; -"'•• - .•'•-• , :.. "-.•••
35 Wisconsin. CSrcte, Suite 520 ;A • ; .
' Chevy Chase, MD 20815; *,; ;'"' ' ;.'• -r,'..
Steve Viedennan, President' \ *•" .r
Jessie Smith Noyes Foundation ' ;:> .. ;,
16 E. 34th St, 22nd Fir. •.•; .' ;""v •' r^
New York, NY 10016 • ' . • ^: ?•',- '.".'.'; *-
Dr. W. B3p VISCOSI ; . ' - :
', Professor^ Department of Economies'
Duke University /•; - ' '. '„ •'•'" /.. ,
#305 Social Science Buflding
. Durham, NC 27706 ' . . :"' •
Susan Vogt, Director;-
Environmental Policy, Training,
& Regulatory Affairs
Georgia-Pacific Corporation
1875 Eye Street, NW, Suite 775
, Washington, D.C. 20006
Alan VotheeS) Chairman '
- Summit Enterprises
1308 Devils Reach Rd. Suite 302
Woodb'ridge, VA 221S2
live Director
Lvironmental Health Center
1019 19th SL NW, Suite 401
Washington, DC. 20036 ,
Jonathan Weiss • ' . .. * •
U^. Environmental Protection Agency
' 401M Street, SW
Washington, DC 20460 :
Keith Welks, Chief Counsel
PA Dept. of Environmental Resources
PO Box 2063 ., •
- Harrisburg, PA 17105-2063 ,
' Roy R Weston, P£, DJE£.. .; '
Chairman Emeritus , •' '
'. Roy F, Weston, Inc." 'j.
1 Weston Way
West Chester, PA 19380-1499
Lori C Winiams, Counsel
Committee on Environment -:
>& Public Works' ' -,
407 Senate Han Bmldmg, .
Washington, D.C. 20510
; Samuel Winder . • . -
- Executive Director . --•
' -'Native Tribal Environmental Council
. 1225 Rio Grande, NW *
ADjuquerque, New Mexico 87100
' Robert Yaro . r
Executive Director "
Regional Planning Association
570 IlexingtOJX Ave. t • •
'• New York, NY 10022 7 ; ^ : ' .
.obert Yuhnke, Attorney ,_' ' _
1405 Irapaho Avenue, •• . . -
Boulder, CO 80302 -. ' , ,
• '•+ si. •
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1
.
"
.Ted
World Bank, IFC
1419 Eye Street"
Washingtoa,
Rick Cbthern .;^V* '••'^'•: £ [ ".' ?v": •-
...
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''"' ' "' '
COLLOQUIUM ON ECONOMICS, ECOLOGY, AND SUSTAINABIL1TY POLICIES
JANUARY 10, 1995
' ' :; ••:.<". TV ''"••-. .. .WASHINGTON,. D.C. •• .' . ,,,-,'; ••>'•';''•'
WALK-INS .• --"- '' :'-; ..';_•' '" -'\ " - •'-;"•' . '" "' -'• '- , v. ' V';.^/ " ../;;"" - - '
David.Behler ''•'-. •'-. ''_..' Y • -'•:'•'•_";'. ..."'• .. ' - •' -",'••• •".•' 'V!- ' . -.. "••'•:.' .X
Special Assistant to the Director. " ' '• • . V\ . • --'-. '..-•. .'".."
Bureau of Land Management, MS-5640
Department of Interior . , .;.
1849 C Street, NW - . " ." :; ; ;
Washington, D.C. ., ; r
(202) 208-6795 : '\ -; - ;; V, ..'
'BillSnape '•; -.'."•- _: . . 4 --•••' • ,• ",
Defenders of Wfldlife '/,.'>. : ,
1101 14tbi Street, NW . . , ,
Suite 1400 . : . : •*.:-- --
Washington, D.CC. 20005 . ;•-
•'.Macol Stewart .-;'• - '. 'J~, :•'. '': . 'f "•''; '",'- .
Sea Grant Fellow
NOAA- "•>,•.';'/ •- '...
Office of Global Programs ~*\" ''..
1100 Wayne Avenue, Suite; 1225
SUver Sjpring, MD 20910 "' . . ,
(301)427-2089 ,-"-';.
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