15 Nov

The New Environmental Economics

Posted By Politybooks

By Éloi Laurent

On September 18th, 16 years old climate activist Greta Thunberg appeared before the United States House of Representatives. When asked to submit a formal version of her inaugural statement, she replied that she would be giving lawmakers a copy of the IPPC special report on the impacts of global warming of 1.5 °C, the so-called SR1.5. “I am submitting this report as my testimony because I don’t want you to listen to me, I want you to listen to the scientists”, she said eloquently.

By the same token, when asked what words she wanted to be printed on the sails of the boat carrying her across the Atlantic Ocean from Sweden to the US, she asked for a blunt message urging citizens and policymakers to act upon climate knowledge: “Unite behind Science”. Greta Thunberg deserves considerable praise for her intelligence, courage and determination in the face of ignorance, skepticism and animosity. But she is wrong on one important point: nations and people around the world won’t unite behind science. They will only unite behind justice.

Any meaningful conversation among humans about change and progress starts with debating justice principles and imagining institutions able to embody these principles. This is especially true of the titanic shift in attitudes and behaviors required by the ecological transition, which goal is nothing short of saving the hospitality of the planet for humans. In this respect, the notion of “ecological transition” can be misleading: it is really a social-ecological transition that we must build in coming years, combining social issues with ecological challenges.

The main goal of The New Environmental Economics – Sustainability and Justice, is precisely to show how social dynamics, such as inequality, cause environmental degradations and, reciprocally, how environmental conditions such as climate change impact social dynamics. It is aimed at considering the reciprocal relationship between social and environmental issues, demonstrating how social logics determine environmental damage and crises and exploring the reciprocal relation, that is, the consequences of these damages on social inequality. Environmental risk is certainly a collective and global horizon but humans are socially differentiated actors of their living conditions. Who is responsible for what and with what consequences for whom? Such is the central question of this book.

Consider climate change. A handful of countries, ten percent exactly (and a handful of people and industries within these countries) are responsible for 80% of human greenhouse gas emissions, causing climate change that is increasingly destroying the well-being of a considerable part of humanity around the world, but mostly in poor and developing nations. On the other hand, the vast majority of the people most affected by climate change (in Africa and Asia), numbering in the billions, live in countries that represent almost nothing in terms of responsibility but are highly vulnerable to the disastrous consequences of climate change (heat waves, hurricanes, flooding) triggered by the lifestyle of others, thousands of miles away.

Why is climate change still not mitigated and actually worsening before our eyes, while we have, as the book shows, all the science, technology, economics, and policy tools we need to fix it? Largely because the most responsible are not the most vulnerable, and vice-versa. Climate justice is the key to understanding and eventually solving the urgent climate crisis. Climate justice is the solution to climate change.

What is true in space among countries is also true in time, between generations. Thanks to Greta Thunberg and the movement she initiated, climate strikes and marches are growing in importance and impact. Part of the new generation is now aware of the grave injustice it will suffer as a result of choices over which it has yet no power. But the recognition of this inter-generational inequality comes up against the wall of intra-generational inequality: The implementation of a true ecological transition cannot escape the social challenges of here and now, in particular the imperative of inequality reduction. The social-ecological transition will be just, or just not be.

We need a new economic approach to make sense of the world where inequality and ecological crises feed one another. Sustainability is intertwined with justice: Human communities depend on natural ecosystems, environmental issues are social matters, planetary boundaries are human frontiers.

This book is thus guided by two strong imperatives: it is unreasonable (and empirically wrong) to dissociate humans from Nature and the economy from the biosphere that contains it (economics without the environment makes little sense in the twenty-first century); it is unconvincing and ethically dubious to reduce environmental economics to a science of efficiency that leaves aside distributional analysis and justice policy.

In the twenty-first century, it thus makes environmental sense to mitigate our social crisis and social sense to mitigate our environmental crises. We should worry about our fragile societies, weakened by inequality, facing unprecedented environmental shocks. We should be anxious about the potential explosion of injustice in the face of deteriorating ecological crises. To give life to these concerns and translate them into meaningful policies, justice needs to take back its place as an input and outcome of environmental economics.

To put it simply, The New Environmental Economics is different from existing textbooks because it attempts to bring together the insights of environmental economics (resource economics, externality economics) and ecological economics (sustainability economics) under the imperative of justice. Political economy of the environment is the disciplinary category that best fits this ambition. The two major crises of the early twenty-first century, the inequality crisis and ecological crises, are really twin crises: they demand to be studied jointly to be fully understood and possibly mitigated.

Éloi Laurent is a Senior Research Fellow at OFCE (Sciences Po Center for Economic Research, Paris), Professor at the School of Management and Innovation at Sciences Po, and Visiting Professor at Stanford University. His new book The New Environmental Economics is available now from Polity.