Economist values nature

It seems obvious that there’s economic value in nature’s raw potential for goods. But nature has other, perhaps less obvious, economic value, said Scott Barrett.

It seems obvious that there’s economic value in nature’s raw potential for goods. But nature has other, perhaps less obvious, economic value, said Scott Barrett.

Scott Barrett is an economist and director of the International Policy Program at Johns Hopkins University.

He told us that an economist would value nature for its raw potential for goods. But there’s more to it than that.

Scott Barrett: We actually look at the environment from a human perspective. That’s not to say that other perspectives are not legitimate, but humans dominate the Earth. I mean, we’re also dependent upon the Earth.

And humans both create environmental disturbances – and clean them up. An economist measures the effects of pollution – say, from a waste dump – using economic factors such as the decline of property values nearby. Those effects are fairly concrete. Less concrete are the positive effects of cleaning up a waste dump.

Scott Barrett: And when we undertake policies that have the effect of improving the environment, those policies involve costs. Those costs are usually very apparent to society, and they certainly would be apparent to those upon whom those costs would be borne.

In other words, it’s easy to count up the economic costs of improving the environment but much harder to measure the economic benefits of the environment once it’s been improved. Barrett says a better understanding of these tradeoffs could help us make tough decisions.

Our thanks to:
Scott Barrett
Director
The Paul H. Nitze School of Advanced International Studies
International Policy Program
Johns Hopkins University
Washington, DC

Jorge Salazar