A blueprint and not a plan

By Kirit Parikh
Last Updated: Saturday 04 July 2015 | 03:16:47 AM

Blueprint 2 -- Greening of the World Economy Editor: David Pearce Publisher: Earthscan Publications Price: £ 8.95.

THIS BOOK, a collection of articles by six authors, is meant to be a sequel to Blueprint for a Green Economy (Earthscan), which was published in September 1989. The theme of the earlier book was that economics can and should come to the aid of environmental policy. Properly interpreted, economics provides a potentially powerful defence of conservation and a novel array of weapons for correcting environmental degradation. It also offers the prospect of doing it all rather more efficiently than traditional approaches based on "command and control".

Blueprint 2 - Greening of the World Economy extends this message to the problems of the global economy -- climate change, ozone "holes", tropical deforestation and resource loss in the developing world".

The earlier book aimed to bridge the communication gap between the ecologist and the economist. It showed that economic logic is not anti-environment and that, in fact, it can help in attain the desired environmental goals at the minimum cost. This book keeps on this tone and deals with global environmental problems. Apart from the introduction which summarises the central messages with admirable clarity, the book contains 10 articles dealing with global commons ranging from the economics of carbon tax and tradeable permits for global warming to environmentally sensitive aid.

These articles are an economist's non-technical and clear exposition of issues. It should convince environmentalists that economics can help in improving and preserving the environment. Yet, the book has some serious omissions. It does not deal with the root cause of present global environmental stress -- the unsustainable consumption patterns of the rich.

In dealing with global environmental problems one must give due consideration to distributional aspects -- how the various solutions affect different countries. One can afford to neglect such considerations when one is dealing with a relatively affluent country like Great Britain, but not when one is dealing with global problems.

While the authors are sensitive to southern viewpoints, they get inhibited with their economic logic that implies a significant transfer of wealth from the rich to the poor. For example, Scott Barrett examines the economics of carbon tax to contain global warming. He reports on a study which estimates that in a globally administered carbon tax, high income countries will have to transfer $90 billion, or 2.8 per cent of their GDP, to low income countries.

He finds this an "unprecedented transfer". But is it? What have been the level of transfers from the colonies to Europe? From Africa to USA in the form of slaves? In more recent times, hundreds of billions have got transferred to OPEC countries. One may argue that this was through trade in oil and not voluntary transfers, but if one recognises that the global commons belong to all, then the transfers to the poor from the rich for leasing the carrying capacity of global commons is also trade and not charity.

Similarly, Anil Markandya, who examines the economics of tradeable emission permits to contain global warming and finds it a superior solution, argues that any global agreement has not only to be "fair" but also "acceptable". He also asserts that "it is unlikely that a global sharing of permits can ever (emphasis in original) be agreed." If economists, in the guise of being pragmatic, stop arguing for just and efficient solutions then he is probably right.

Ed Barbier's papers describe environmental degradation in the South and tropical deforestation. A number of boxes from various studies provide quantitative insights into some of the costs and alternatives to deal with the problems. However, since the studies of different authors are so briefly summarised -- sometimes even the meaning of the numbers in a table has to be inferred from the text -- that it is difficult to judge how reliable the estimates are.

If you are looking for a magic technical fix to solve our global environmental problems, this is not the book for you. But if you want to think about the issues in a more structured way, this book will help you. However, developing country readers should question the pragmatism with which the authors reject arrangements for equitable sharing of the global environment's carrying capacity.

In sum, read this book, by all means, but don't regard it as the last word. As David Pearce observes in his preface, "there is still a lot more to say". Even after Blueprint 2 -- Greening of the World Economy, that is still true.

---Kirit S Parikh is the director of the Indira Gandhi Institute of Development Research, Bombay

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