Anda di halaman 1dari 4


a place in the rapidly increasing literature provided by good minds on both

sides. But the key problem remains of finding a perspective that combines
growth and preservation, that can restore the working together of biologists
and economists that produced ‘results in the 19th century.
And until we come closer to that perspective we had better pay attention
to the best partial knowledge available, and take seriously warnings such as
those of the Ehrlich’s.

International Institute for Applied Systems Analysis,
A-2361 Laxenburg,

Blueprint for a green economy

Blueprint for a Green Economy. David Pearce, Anil Markandya and Ed-
ward B. Barbier. Earthscan, London, Great Britain, 1989. 192 pp., g6.95.
ISBN 1 85383 066 6.

Blueprint 2: Greening the World Economy. David Pearce (Editor). Earth-

scan, London, Great Britain, 1991. 232 pp. f7.95. ISBN 1 85383 076 3.

These two books Blueprint for a Green Economy and Blueprint 2:

Greening for the World Economy provide a good introduction to the
analysis of resources, environment, and population proffered by neoclassi-
cal economists. The books’ clarity, breadth, and level of sophistication
make them ideal supplemental readings for upper level undergraduate and
graduate level courses or anyone wishing an introduction to the topic.
Although the authors probably did not plan originally for a series, the
organization of material both between books and among chapters within
books aids in the readers’ understanding. Blueprint for a Green Economy
lays out the theoretical constructs by which neoclassical economists analyze
natural resources and the environment. Although the book starts with a
discussion of sustainability, the focus shifts quickly to topics familiar to
neoclassical economists such as valuation, national accounts, discounting,
and project appraisal. Each chapter describes briefly the concepts needed
to understand the topic. For example, the chapter on valuing the environ-
ment describes the various aspects of use value (e.g. direct and indirect
value) and intrinsic values (e.g. option and existence value). Once defined,

the authors describe the methodologies used to quantify value such as

hedonic price estimators, contingent valuation, and travel cost approaches.
Equally important, the authors make no obvious attempt to disguise the
lacunae and contradictions that are associated with the neoclassical ap-
proach. For example, the appendix to the chapter on valuation reprints in a
modified form, a table that summarizes the difficulties associated with each
of the techniques for calculating value. Organized this way, each chapter
provides an intellectual roadmap by which the reader can understand the
general approach to and limits on the neoclassical analysis of natural
resources and the environment.
Blueprint 2: The Greening of the World Economy is a collection of essays
that describe many of the important challenges that confront international
management of the global environment. Topics include alteration of the
planet’s atmosphere and ecosystems, economic development, and popula-
tion growth. In this volume, each chapter describes briefly the instruments
by which neoclassical economists would have policy makers ease resource
and environmental problems. For example, the chapters on global warming
describe command and control strategies such as efficiency standards for
energy using devices, and market based incentives such as a carbon tax or
tradeable permits, to slow the accumulation of carbon dioxide in the
atmosphere. Equally important, the chapters also describe the real-life
complexities that affect the merits of the various policy options. Continuing
with the example of the chapters on global warming, the description of the
carbon tax discusses its impact on social welfare, trade, etc. and describes
how revenue recycling affects each of these impacts. Similarly, the theoreti-
cal appeal of tradeable permits is tempered by a discussion of the difficul-
ties associated with setting targets and allocating permits. The discussion of
these complexities is enhanced further by the very specific examples that
appear as “boxes” throughout most of the chapters. Organized in this way,
each chapter summarizes how economists and policy makers use the
constructs presented in volume 1 to alleviate resource and environmental
The high degree of complementarity between the two volumes begs them
to be read in succession. In many instances, the case studies in volume 2
illustrate the theory in volume 1. The discussion of economic valuation
provides the best example of this complementarity. Blueprint 2 ends with a
chapter entitled Environment, Economics, and Ethics. In it, R. Kerry
Turner describes the philosophical underpinnings and practical implica-
tions of the various components of value that are described by the chapter
on valuing the environment that appears in volume 1. Similarly, the
chapters on global warming in volume 2 illustrate nicely the theoretical
differences between command and control and market based incentives

that are described by the chapter on prices and incentives for environmen-
tal improvement that appears in volume 1.
The books should be read and critiqued based on the organization,
content, and purpose that is described above. These books should not be
read with the expectation that they will describe new ideas or new applica-
tions. As readily admitted by the authors “the ideas in Blueprint 1 are not
new. We never said they were.” The books review neoclassical economic
theory as applied to resources and the environment and fulfill this niche
well. As such, they do not include material from work that attempts to
extend the neoclassical economic model to incorporate more completely
the biological, chemical, physical complexities of resource and environmen-
tal issues, much of which can be classified under the general rubric of
ecological economics. A considerable body of such theory and applications
do exist. Indeed, the evolution of such knowledge is the justification for this
journal. With this omission in mind, the application of neoclassical eco-
nomic theory to resource and environmental problems should not be
mistaken for a new synthesis.
Indeed, reading these two books may leave the impression that a new
synthesis is not needed. The application of neoclassical theory to resource
and environmental issues presents a logically consistent framework for
dealing with these problems using existing policy instruments. This consis-
tency may be envied by some “ecological economists”. But a critical
reading of the volumes reveals an omission that limits the ability of
neoclassical economics to generate sustainable solutions to resource and
environmental problems, the inability to quantify the contributions made
by ecosystems to human wellbeing. This omission is mentioned in the policy
reviews in the second volume, but disciplinary blinders direct the authors to
emphasize issues that can be addressed more easily within the neoclassical
economic paradigm. For example, the chapter on deforestation states at
least six times that an accurate assessment of total economic value is
critical to the formulation of efficient policy. But there is relatively little
discussion of how to do so. Instead, the author devotes much of the text to
the claim that removing distortions introduced by existing policy and
property rights is the critical issue. Similarly, the chapter on tradeable
permits discusses the difficulties associated with setting the “efficient”
level of carbon emissions, but argues that the acceptability of the scheme
used to allocate the permits is the critical issue. Clearly, removing policies
that distort market valuations of tropical forests or generating formulae to
allocate permits among nations are important first steps to slow deforesta-
tion and global warming. But even if such obstacles could be removed,
there is no guarantee that the market would generate an accurate assess-
ment of total economic value. Until humans develop theory and technique

to integrate the biological, chemical, and physical consequences of their

actions into economic calculations, towards which ecological economists
are making tentative first steps, such information will remain the Leibigian
limit for policy that tries to make the leap from economic efficiency to
sustainability. To focus only on economic efficiency using the tools of
neoclassical economics only is hauntingly similar to previous arguments
about the number of angels that can dance on the head of a pin.

Center for Energy and Enuironmental Studies,
Boston Uniuersity,
675 Commonwealth Acenue,
Boston, MA 02215,

Natural resources, growth and development

Natural Resources, Growth and Deuelopment: Economics, Ecology and Re-
source Scarcity. Clement Tisdell, Praeger, New York, 1990. 186 pp.

Clem Tisdell is Professor of Economics at the University of Queensland.

In the 1970s and 1980s he helped cement the various strands of thinking
that came to be the science of environmental economics. This book
comprises sets of lectures that he has given, mainly in Australia and New
Zealand, together with some developments of earlier writings. Tisdell was
one of the first economists to think about what we know as ‘sustainable
development’, although some economic growth theorists would argue
(wrongly) that they had developed this subject in the 1970s in formal terms.
Certainly, it is difficult to find other economists who even knew of the
existence of the World Conservation Strategy in 1980.
The book begins with some contrasts between economics and ecology.
The former, says Tisdell, is distinctly man-oriented, the latter is not;
sustainability is a focus of ecology, it has only recently attracted the
attention of the economists. Tisdell probably xaggerates the current state of
the contrast. Economists have now begun the process of looking at the
‘glue’ that makes the value of an ecosystem asset exceed the sum of its
more obvious economic functions.
Clem Tisdell has worked extensively in developing countries and he
brings his experience to bear in this volume. He shows in simple terms how
there are gains from trade between the North and the South with respect