Table Of ContentA Publication of the Egon-Sohmen-Foundation
Herbert Giersch
(Ed.)
for the Egon-Sohmen-Foundation
Economic Progress and
Environmental Concerns
With 34 Figures
Springer-Verlag
Berlin Heidelberg New York
London Paris Tokyo
Hong Kong Barcelona
Budapest
Prof. Dr. Herbert Giersch
Past President
Kiel Institute of World Economics
D-24100 Kiel
This book was produced with financial support of the
Egon-Sohmen-Foundation
ISBN-13:978-3-642-78076-9 e-ISBN-13:978-3-642-78074-5
DOl: 10.1007/978-3-642-78074-5
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Preface
This is the third volume in the series of books emanating from
the activities of the Egon-Sohmen-Foundation, established by
Helmut Sohmen in memory of his late brother. Egon Sohmen
(1930-1976) was a highly respected international economist who
studied and worked in Vienna, Lawrence (Univ. of Kansas), Tiib
ingen, Cambridge (MIT), New Haven (Yale), Saarbriicken (Univ.
of the Saar), Heidelberg, Minneapolis (Univ. of Minnesota).
The first two books, published in 1991 and 1992 by the
Springer-Verlag, contain essays on The Economic Transformation
of Central and Eastern Europe and on Money, Trade, and Competi
tion. The essays were discussed at conferences held at Laxenburg
near Vienna and at Tegernsee in the Bavarian Alps. The Tegernsee
Conference was organized in 1990 to commemorate Egon
Sohmen's 60th birthday and assembled scholars eager to pay trib
ute to his major achievements.
At the end of the Tegernsee discussions Regine Sohmen,
Egon's widow, suggested holding a symposium on environmental
issues relevant to present-day economists. Linz in Austria, Egon's
birthplace, was chosen as the conference venue.
In preparing the conference we adopted as a working title
"Economic Evolution and Environmental Concerns." The em
phasis on evolution was to serve several purposes. We wanted to
avoid "growth" for the reason that the term is often misunder
stood to describe an essentially quantitative phenomenon. More
over, it seemed useful to direct attention to the role that innovation
plays in advanced countries, notably innovation for quality im
provement and resource saving. Innovations are like mutations in
evolutionary biology; some of them are viable, others are not. The
selection mechanism of competition could perhaps be biased in
vi Preface
favor of what has been termed "sustainable development." But we
also wanted to avoid the word "development," as many econo
mists and others have become used to associating it with the prob
lems of poor countries in what was once called "the Third World."
Finally, "economic evolution" was chosen, as a challenge to those
scholars who are working towards an evolutionary approach in
economics. It was our hope that we could enlist more than one
author to show that evolutionary economics is particularly suit
able to meeting environmental concerns.
As we failed on the last account, we decided to reserve "evolu
tion" for another occasion and to use the word "progress" in the
title of this book. It reflects the editor's belief that progress in
meeting environmental concerns - as they arise when people en
deavor to overcome scarcities - will essentially come from the
growth of knowledge, a growth we can expectJrom the increasing
division of labor among brains in a market for ideas that becomes
ever larger as communication costs continue to shrink. This opti
mism is in tune with the nonalarmist nature of most of the papers
in this volume. It should, however, not be misunderstood to imply
that environmental concerns are unwarranted. They remain a
great challenge to the natural sciences as well as to economics.
There is no need to summarize the papers or the discussions or
to make more detailed comments. The titles speak for themselves,
and the major points made during the conference, which was held
in late August 1991, were taken account of in the versions revised
for publication. One paper was withdrawn by its author after the
conference. During the conference, the discussions were quite re
laxed, though from time to time opposing views were brought for
ward and harsh criticism was applied.
As at previous conferences, members of the Sohmen family
who were present attended all of the sessions and took an active
part in discussions. The whole atmosphere was pleasant, not in
small part due to their involvement. Presiding over the meetings
was an enjoyable experience.
If all participants went home with good feelings, despite the
seriousness of the issues raised, generous credit has to be given
also to the Raiffeisenlandesbank in Linz and to its Director-Gen
eral, Mag. Dr. Ludwig Scharinger, and his aides. Their hospitality
and support greatly added to the quality of the conference. The
Preface vii
participants all enjoyed the beauty of Linz and its surrounding
countryside.
The conference and the present volume owe a great deal to the
considerable advice and help I received from Joachim Fels before
and after the event. Thanks are also due to Torsten Amelung and
Johannes Heister for their valuable advice on the choice of topics
and speakers for the conference. We are also indebted to Prof.
Friedrich Schneider of the University in Linz who not only con
tributed a paper to the volume but also assisted with the organiza ..
tion locally.
Contents
Preface ........................................... v
Part I: General Aspects ............................. 1
The Environmental Limits to Growth: A Fresh Look
Wilfred Beckerman ................................. 3
Ecological Concerns in a Market Economy: On Ethics,
Accounting and Sustainability
Johannes Heister and Friedrich Schneider .............. 25
Philosophical Aspects of Intergenerational Justice
Joanna Pasek ...................................... 49
Evolutionary Economics as an Approach to
Environmental Problems
Georg Erdmann .................................... 65
Part II: Policy Instruments ........................... 97
Designing Markets for CO Emissions and Other
2
Pollutants
Johannes Heister and Peter Michaelis ................. 99
Pollution Charges as a Source of Public Revenues
Wallace E. Oates ................................... 135
The Role of Economic Incentives for Natural Resource
Management in Developing Countries
Edward B. Barbier. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 153
x Contents
Part III: Trade Issues 179
The Impact of Domestic Environmental Policy on
International Trade
James A. Tobey .................................... 181
Economics of the Trade in Endangered Species:
Implications for Sustainable Management
Joanne C. Burgess .................................. 201
Part IV: The Global Dimension 231
Tropical Deforestation as an International Economic
Problem
Torsten Amelung 233
How Much Should We Invest in Preserving Our Current
Climate?
William D. Nordhaus 255
List of Contributors 301
Part I
General Aspects
The Environmental Limits to Growth:
A Fresh Look
Wilfred Beckerman
Introduction
A The Limits to Growth
The proposition that there must be limits on the feasibility or
desirability of economic growth set by the adverse impact of eco
nomic activity on the environment has always been just one
strand in the frequently encountered arguments to the effect that
continued economic growth is fraught with many dangers to the
human race. lust over twenty years ago many people in developed
countries began to express grave doubts as to the desirability of
continued economic growth. The main reasons for this concern
were first set out brilliantly by E.l. Mishan (1967), who enumer
ated various alleged shortcomings of economic growth. Pollution
of the environment was only one of them. Others included conges
tion of travel facilities and holiday resorts, and other forms of
externality, as well as less tangible effects, such as the subordina
tion of nobler social values to the pursuit of commercial objectives
and the consequent deterioration in society's moral standards.
Similar concerns were set out in well-known books by Fred Hirsch
(1977) and E.F. Schumacher (1973).
Paradoxically, at the same time as the undesirability of con
tinued economic growth was being proclaimed it was also often
maintained - usually by the same people - that continued eco
nomic growth was also impossible on account of an impending
shortage of raw materials or food supplies, or of environmental
catastrophe. It was never clear why such groups of people were so
alarmed at the prospect that economic growth was both undesir
able and impossible, for it would have presumably been much
more alarming if it had been either undesirable but inevitable, or
