How to value the environment, however, is at the center of the questions raised by the environmentalists, and needs more scrutiny. It is best illu- minated by reference to some common examples of environmental dam- age from trade expansion that groups such as the Defenders of Wildlife have cited in their activist agitations. These include the contention that the demand for softwood, pulp, and paper in the United States has
accentuated the “over-harvesting of the boreal forest in Canada, while demand for mahogany and other precious hardwoods drives deforesta- tion in the Brazilian Amazon,” and that “in countries like Chile, millions of square miles of native and globally-unique forest have been cleared to make way for monoculture tree plantations to feed international de- mands for wood products.”15
These groups write as if public policy is wrong when any environ- mental damage is observed. But this criticism is mistaken unless one puts an infinite value on saving the boreal forest in Canada or the forests in Chile. In the absence of such an extreme valuation, which puts zero weight on income and infinite weight on environment, the optimal out- come will be characterized by some trade gains and some environmental damage. Once this is recognized, it follows that, except in the few situa- tions where it makes sense to attach an infinite weight to environmental preservation, the environmentalists are more credible if they ask, quite properly, for a rise in the relative valuation of environment to income.
Moreover, when environmental groups such as the Defenders of Wildlife condemn the harvesting of the Canadian boreal forest, their complaint is misdirected at trade. It is really about the valuation that the Canadians are putting on their boreal forests. And since Canada is a democratic society, it is up to the Canadians through their domestic political process to make that choice, and not up to the Defenders of Wildlife to impose their extraneous valuation on what Canadians should do, and not do, within their own jurisdiction with their natural resources. Democracy is not a right that people are willing to sacrifice to such groups, no matter how altruistic and selfless they might be. This is par- ticularly so in countries that have escaped from the colonial yoke and have not been ensnared into a neocolonial embrace. The proper role for these international environmental groups is to aid and assist the domes- tic groups that, in turn, go legitimately through domestic political chan- nels and attempt to shift the balance of political forces toward a higher valuation of the environment.
And it is fair to say that environmental valuation has indeed risen in the last three decades as the environmental movement has come into its own. Aside from this trend effect, there is also a demographic effect. I have long argued that the intensity of environmental preference or com- mitment is characterized by a U-shaped curve: if you plot intensity of preference on the vertical axis and age on the horizontal axis, the plotted curve comes down and then moves up in a U-shape, since the prefer- ence is high among the young and the old.
The very young care intensely for the environment. They rarely think in terms of trade-offs, implicitly ignoring the cost of reaching
Environment in Peril?
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143environmental goals and therefore never having to revise environmen- tal preferences in light of knowledge about the cost of indulging them. They also have an oversimplified view of what must be done. They get upset when, confronting their parents and asking for cloth diapers to be chosen in preference to disposables, they are told that cloth diapers are likely to be washed with detergents and that, if you go yet further back in the chain of inputs, it is possible that a shift to cloth diapers may cause net environmental harm. And they are not alone: several environ- mental activists get agitated as well by what they call “obfuscation,” which any systematic and comprehensive analysis often leads to. And that is precisely, of course, what economists bring to the table. I recall one of my Oxford teachers, Ian Little, a world-class economist, telling me when he had returned from a couple of years advising in Whitehall: “I thought we economists worked with models that sometimes abstracted too much from complexity. But I found that bureaucrats and politicians worked with even simpler, naive models: if x affected y, that was the end of the matter; whereas the economist typically argued, ‘But y will affect z, which in turn will affect x and feed back on y as well.’” In fact, the iconoclastic
New York Times columnist John Tierney once told me that the greatest
amount of condemnatory e-mail he had received was over a New York
Times Magazine article showing how recycling programs had actually
worsened the garbage problem!16
But if the very young hold intense preferences on environmental objectives, unmindful of complexity and trade-offs, the old also tend to do the same. After life’s fitful fever, as they retire to Sanibel Island in Florida and other sunny climates that are kinder to their arthritic bones, they are closer to their six feet of ground. And one sees countless such old folks turning to protect turtles and ospreys, and putting money into the environmental groups.
So we have intense preferences among the young and the old, and those in the middle are the ones who worry about trade-offs and com- plexity. The environmental economist Matthew Kahn, to whom I sug- gested this U-shaped phenomenon, actually looked at the referenda on environment in California and found some evidence supportive of it.17
But if this is so, then there is an important implication as populations age around the world, especially in the rich countries. In Europe, already we have “35 people of pensionable age for every 100 people of working age; in Spain and Italy the ratio of pensioners to workers is projected to be one-to-one.”18 As the middle shrinks in the foreseeable future, we have an
additional reason environmental valuations will rise: demographics will reinforce the trend effect from environmental activism.