Book Review

A book review report to be submitted for one of the courses I am taking this semester (the course name is Philosophical Issues in Geography, the content is interesting, but the teaching style is...well...)

Book Name: Greenhouse Economics: Value and Ethics
Publisher: Routledge, London
Author: Cli_ve Sp_ash
Year: 2002

Sp_ash’s book offers insightful counterarguments to neoclassical economics with reference in particular to enhanced Greenhouse Effect. Despite titled as ‘Greenhouse economics’ the book is developed as a critical review of mainstream environmental economists’ misunderstandings of the issue. Intensive discussion on the misplaced role of economics as well as science in general is built upon a postmodernist perspective as a response to their methodological weaknesses in addressing the nature of the problem which is characterized by evidently high uncertainties, complexities and indeterminacy. It calls for a theoretically different approach that removes the consequential and utilitarian preoccupation of standard economics, and accommodates pluralist values and admits partial ignorance.

Normal science and mainstream economics, according to Sp_ash, restrict their analysis and policy recommendations to a claim of truth-seeking and neutrality. This
‘golden rule’, however, limits the development of good policy if applying to the public sphere. His criticisms come with a distinction between weak and strong uncertainty, which the former is meant to acknowledge predictable risks with unknown probabilities while the latter denies any predictability as with the climate change. Justified by a deterministic worldview, the linear and predictable trajectory of climate change then form the basis of cost-benefit analysis that formulates the money balance in case of catastrophic events. An objective fact is taken as given and awaiting to be discovered in forms like the dollar value of the damages following a rise in global temperature, which can then inform what should and should not be done to assure sustainability. However, Sp_ash dismisses such faith as ‘hard’ guidance for policymaking given the strong uncertainty, irreversibility and indeterminacy of climatic catastrophes that make experimental speculative numbers meaningless in developing proper responses to truly unpredictable events. The characterisation of future states via ‘scientifically sound’ cause-effect relationship would excessively simplify system behaviours in action which often operate in non-linear patterns, like human interaction.

Another problem that follows is the treatment of ethical dimensions. Reliance on science throughout the last century appears to promote the merits of a value-free position in the realization of adaptive responses. Sp_ash is sceptical to such a relegation of moral judgement especially in the high-profile debates of global warming. Relocation of inhabitants in low-lying areas and the international distribution of mitigation costs, for instance, inevitably involve justice issues and are beyond the economic dogma of utility maximization defined exclusively by neoclassical criteria. Sp_ash contends that “many economists claim that economic values and scientific research are separable from the moral and ethical dimensions of the problem they study. However, whether discounting or valuing damages, ethical and distributional issues are central to discussing the enhanced Greenhouse Effect (p.192)”. The utilitarianism well established in mainstream economics that serves well in dealing with private goods has entirely missed the point as far as the public good nature of the environment, as exemplified by the case of global warming, is concerned.

The need of a transition from normal science to post normal science is stressed by Sp_ash, following Funtowicz and Ravetz (1993, 1994), who are inspired by a specific postmodernist standpoint. Scientists and economists attempt to search for an objective truth for achieving a set of definitive solutions to the problem and restrict the criteria to their initial worldview. Under a methodological individualism they construct disciplinary boundary based on a set of unrealistic assumptions isolated from the human world and at the same time ignore evidence that is incompatible to their recognized empirical knowledge. Multiple values and deontological positions are excluded from positive economics thus cutting off the connection between science and society. Blatantly contradictory and misleading messages are then created under this narrow definition of global warming issues and its impacts, as demonstrated in the Stern Review on the Economics of Climate Change strongly criticized by Sp_ash in another article (Sp_ash, 2007).

Criticisms to Sp_ash’s position can be drawn from pragmatic needs. Economists’ simplification can make policy actions manageable and scientific ‘evidence’ can also minimize controversy. Admission of partial ignorance and incorporation of multiple values require a fundamental change in institutional behaviours as acknowledged by Sp_ash. Despite theoretically correct, practitioners may find it impotent to commit such a big move and be sceptical to withdrawing from vested interests, and this creates questions about the extent that the Sp_ash’s recommendations can genuinely make a difference in practice. He may also be challenged as being over-optimistic to an enhanced role of the public when he recommended a deliberative, discursive approach rather an expert-led one. Emphasis of subjective moral imperatives will leave rooms for policy manipulation too. Further, existing institutions tend to have a resistance to the unspecified, or sometimes ambiguous, roadmap, so do the general public in some circumstances.

Nevertheless, the major contribution of this book is in distinguishing the role of objectivity and subjectivity with respect to enhanced Greenhouse Effect issues, while leaving policy recommendations open (in fact, this must be open based on the contexts). Critics should not ignore the fact that the exclusive focus on objectivity is part of the problem per se. It not only relegates ethical dimensions but also puts too much faith to future technologies. If being objective is meant to rely more on science, then one cannot eliminate surprise events associated with the environment as well as human society. “Future technologies cannot be predicted and therefore all the worries of environmentalists may be solved by scientists and engineers. The very same analysts fail to see the logic of their argument. If the future is unpredictable we must plan for the unexpected” (p.279).

Acknowledging subjective values is meant to enhance the capacities of human to cope with strong uncertainties by extending the peer review community to lay people and stakeholders, and the concerned in other disciplines like social psychology and political science. This helps identify unknowns and develop novel solutions, and most importantly, assure equity in the distribution of costs and benefits associated with surprise events, such as relocation of coastal inhabitants due to sudden sea level rise. The issues about who gain and who lose are in fact central to the global warming discourse. They are however more an art than a science that objective judgement always fails to address if not intensifies the problem by, as some economists did, suggesting that a potential (hypothetical) compensation would justify ‘rational’ decisions like transferring chemical wastes to poor countries for lower costs in accordance with the Pareto optimality principle. Sp_ash stresses that objective information and approaches are to some extent ‘subjectively’ created. In his book, the enhanced Greenhouse Effect is taken to indicate the weaknesses of holding such an ‘objective’ position in tackling contemporary complex problems. Criticising on pragmatic issues does not reduce the credibility of his arguments but just repeat the narrowly defined economic doctrines. In fact, part of the current problem actually arises from the intentional avoidance of these complex issues.

To conclude, this book is worth reading in depth. In general it is suitable for readers who have basic knowledge in economics and are interested in a pluralistic approach. It broadens the understanding of the enhanced Greenhouse Effect by critically reviewing the interpretations of mainstream economics in particular. It reminds economists and those who accept their approaches that the issue can never be adequately understood within their disciplinary confines. Sp_ash raises suspicion over the prevalent neoclassicism and meaningfully approaches the issue following the postmodernist trend, while leaving more difficult (but unavoidable) questions to practitioners, including to himself.