Globalization and the environment

By Tim Worstall | 4 April 2005

The Millennium Ecosystem Assessment was released last week and was, to my mind, sadly under-reported. You can get a copy here if you wish to read all 256 pages. The Guardian was correct as far as it went and was typical of the press coverage:

The wetlands, forests, savannahs, estuaries, coastal fisheries and other habitats that recycle air, water and nutrients for all living creatures are being irretrievably damaged. In effect, one species is now a hazard to the other 10 million or so on the planet, and to itself.

But it perhaps did not go far enough. All of the problems found by the report are to do with the old chestnut, the Tragedy of the Commons. When there is open access to a resource, and pressure on that resource is growing, then access must be limited. As the report goes on to point out (starting at page 154) we know, in general, how to do this. One (not the only, but one) method of doing this is to assign private ownership of the resource in question, and then promote a market in its use, so that ownership passes to those who value it highest, and that is certainly what I think they are suggesting in these two policy recommendations:

...[a] wide range of opportunities exists to influence human behavior to address this challenge in the form of economic and financial instruments. Some of them establish markets; others work through the monetary and financial interests of the targeted social actors; still others affect relative prices.

Greater use of economic instruments and market-based approaches in the management of ecosystem services.

Specific examples mentioned are individual transferable quotas for fisheries (along with no fish zones) and private ownership of wildlife like the big game animals of Africa.

There are also four scenarios developed to save these ecosystems, one of which is:

More specifically, in Global Orchestration trade barriers are eliminated, distorting subsidies are removed, and a major emphasis is placed on eliminating poverty and hunger.

In short, globalization in order to save the planet. A good week for Alex to move to the Institute full time I think.