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Economic Inequality, Environmental Quality, and International Development
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The environmental costs of production and marketing can be internalized a number of
ways so that consumers and producers have information about the real consequences of their decisions. One of the most effective ways is to prevent pollution from occurring. Another innovative approach is for manufacturers to retain ownership and responsibility for their products, lease them to consumers rather than sell them, and then take back the used product for recycling and reuse of parts. True costs can also be pursued through regulations such as emission standards that go beyond the separate media (water, air, and land) to involve a much more integrated and effective program of reducing emissions. Property rights in resources can be allocated in ways that ensure that if depletion of a resource occurs, that is reflected in higher prices, and that the most efficient reductions in pollution are made through trading emission rights. Taxes can send strong signals to reduce pollution and conserve resources; taxes on virgin materials can create strong incentives for recycling. Subsidies for water and energy projects that do damage to the environment and divert resources from more ecologically sound practices are another part of sustainability. Liability rules and the cost of insurance can contribute to conservation.
Using taxes, regulations, subsidies, and other policies to address this kind of market
failure is simply required to make markets work the way they are supposed to in theory, and true cost pricing should appeal to advocates of markets and environmental protection alike. But determining what true prices are is complex and politically controversial. Generating clear and compelling quantitative data on the value of the services provided by ecosystems is an essential part of making true cost prices possible, but only crude estimates are currently available for some ecosystem services. One pioneering study concluded that the value of services performed by some global ecosystems should be valued at from $16 to 54 trillion. Ecosystem services can be estimated a number of ways. One approach is to estimate the cost of restoring damaged systems to a more pristine, undisturbed state. Another is to estimate the cost of constructing a particular ecosystem. Inquiries about how much people value recreational opportunities can help shed light on values that could be incorporated in to prices. Comparing property values of land near natural amenities and protected areas with those near developed sites can also provide rough estimates of ecosystem worth. Because ecosystem services are not well understood, and not widely understood in society, their value is likely to be significantly understated. As analysis improves, we can move closer to approximating true costs and equipping individuals with the opportunity, through market decisions, to increase their collective control over some of the adverse consequences of technology.
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For globalization to survive, its theorists and practitioners will need to broaden their
ideology to find ways to link the interests of North and South. The idea of negative capital nicely captures the idea of integrating the interests of developing and developed nations. Negative capital is defined as “situations, events, or environmental conditions that have externalities that degrade or threaten to degrade the standard of living or life expectancy of great numbers of persons, including those living in wealthy countries.” The rich countries have been able to grow wealthy because of their ability to externalize negative capital, in the form of air pollution, deforestation, greenhouse gas emissions, groundwater depletion, and hazardous wastes, and in the resources extracted from colonization of the South. Poorer nations, as they develop, produce more and more negative capital—polluting energy processes, unsanitary waste disposal, deforestation, and other practices that produce health and environmental degradation—
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19
The environmental costs of production and marketing can be internalized a number of
ways so that consumers and producers have information about the real consequences of their
decisions. One of the most effective ways is to prevent pollution from occurring. Another
innovative approach is for manufacturers to retain ownership and responsibility for their
products, lease them to consumers rather than sell them, and then take back the used product for
recycling and reuse of parts. True costs can also be pursued through regulations such as
emission standards that go beyond the separate media (water, air, and land) to involve a much
more integrated and effective program of reducing emissions. Property rights in resources can
be allocated in ways that ensure that if depletion of a resource occurs, that is reflected in higher
prices, and that the most efficient reductions in pollution are made through trading emission
rights. Taxes can send strong signals to reduce pollution and conserve resources; taxes on virgin
materials can create strong incentives for recycling. Subsidies for water and energy projects that
do damage to the environment and divert resources from more ecologically sound practices are
another part of sustainability. Liability rules and the cost of insurance can contribute to
conservation.
Using taxes, regulations, subsidies, and other policies to address this kind of market
failure is simply required to make markets work the way they are supposed to in theory, and true
cost pricing should appeal to advocates of markets and environmental protection alike. But
determining what true prices are is complex and politically controversial. Generating clear and
compelling quantitative data on the value of the services provided by ecosystems is an essential
part of making true cost prices possible, but only crude estimates are currently available for some
ecosystem services. One pioneering study concluded that the value of services performed by
some global ecosystems should be valued at from $16 to 54 trillion. Ecosystem services can be
estimated a number of ways. One approach is to estimate the cost of restoring damaged systems
to a more pristine, undisturbed state. Another is to estimate the cost of constructing a particular
ecosystem. Inquiries about how much people value recreational opportunities can help shed light
on values that could be incorporated in to prices. Comparing property values of land near natural
amenities and protected areas with those near developed sites can also provide rough estimates of
ecosystem worth. Because ecosystem services are not well understood, and not widely
understood in society, their value is likely to be significantly understated. As analysis improves,
we can move closer to approximating true costs and equipping individuals with the opportunity,
through market decisions, to increase their collective control over some of the adverse
consequences of technology.
67
For globalization to survive, its theorists and practitioners will need to broaden their
ideology to find ways to link the interests of North and South. The idea of negative capital
nicely captures the idea of integrating the interests of developing and developed nations.
Negative capital is defined as “situations, events, or environmental conditions that have
externalities that degrade or threaten to degrade the standard of living or life expectancy of great
numbers of persons, including those living in wealthy countries.” The rich countries have been
able to grow wealthy because of their ability to externalize negative capital, in the form of air
pollution, deforestation, greenhouse gas emissions, groundwater depletion, and hazardous
wastes, and in the resources extracted from colonization of the South. Poorer nations, as they
develop, produce more and more negative capital—polluting energy processes, unsanitary waste
disposal, deforestation, and other practices that produce health and environmental degradation—
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