Posted: April 10th, 2015

Assignment 2 – IEST7100 Environmental Management – Economic Fundamentals; Where do ethical considerations enter environmental economics (in the broad sense of the later term)? Discuss the role of ethics (or ethical assumptions – implicit or explicit) in neoclassical/mainstream environmental economics AND EITHER ecological economics OR institutionalist OR Marxist analysis of the environment.

Assignment 2 – IEST7100 Environmental Management – Economic Fundamentals; Where do ethical considerations enter environmental economics (in the broad sense of the later term)? Discuss the role of ethics (or ethical assumptions – implicit or explicit) in neoclassical/mainstream environmental economics AND EITHER ecological economics OR institutionalist OR Marxist analysis of the environment.

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Where do ethical considerations enter environmental economics (in the broad sense of the later term)? Discuss the role of ethics (or ethical assumptions – implicit or explicit) in neoclassical/mainstream environmental economics AND EITHER ecological economics OR institutionalist OR Marxist analysis of the environment. (Note that there are different ethical perspectives (or priorities) out there and that some people place a high value on things like ‘liberty’, ‘loyalty’ and respect of ‘property rights’ and that being ethical – for them – is not just about care and fairness). Feel free to make your own judgements on the two economic perspectives with regard to

Assignment 2 – IEST7100 Environmental Management – Economic Fundamentals.
Essay Questions.
Choose to do one of the following. Word limit 1,500 – 2,000 words. Due 3pm Wed April 15th (in submission folder online) and please bring hardcopy to lecture or mail it in for distance students.
Q.1. In class we have discussed how ‘market failures’ mean that relying on the free market alone may not deliver socially optimal results for the environment. What we didn’t discuss was ‘government failure’. Discuss the various reasons why relying on governments alone may also not provide the socially best outcomes for the environment. Think about the various ways governments can intervene and their limitations. Include examples relating to the environment. Given that some in-between approach may be necessary, can you think of any principles or considerations economic managers should include in policy design given the limitations of both free markets and governments (being aware that different environmental problems have different contexts and that only broad principles, on when to rely more on one than the other, would be at best possible).
A couple of references that may help:
Hepburn, C. (2010) ‘Environmental policy, government, and the market’
Oxford Review of Economic Policy, Volume 26, Number 2, 2010, pp.117–136
And a more general introduction on government failure.
Geoff Riley 2012 Government failure – an introduction
http://tutor2u.net/economics/revision-notes/a2-micro-government-failure.html
Since ‘government failure’ probably brings up a lot of results in google or UNSW library, I’d also enter other key words that are relevant to our specific topic like ‘market failure’, ‘externalities’, ‘environment(al)’ etc.
Q.2. Where do ethical considerations enter environmental economics (in the broad sense of the later term)? Discuss the role of ethics (or ethical assumptions – implicit or explicit) in neo-classical/mainstream environmental economics AND EITHER ecological economics OR
institutionalist OR Marxist analysis of the environment. (Note that there are different ethical perspectives (or priorities) out there and that some people place a high value on things like ‘liberty’, ‘loyalty’ and respect of ‘property rights’ and that being ethical – for them – is not just about care and fairness). Feel free to make your own judgements on the two economic perspectives with regard to ethics.
Q.3. ‘Wicked problems’ is a term used in a number of disciplines and they are characterized by high degrees of scientific uncertainty and a profound lack of agreement on values. Many environmental problems can be fairly described as wicked. Try to overview the implications of wicked problems for mainstream environmental economic methods and policies (e.g. is typical cost-benefit analysis appropriate with deep uncertainty?).
[This question is more challenging as we won’t have gone through all the different tools of mainstream economics until Part 2 of the course. But it is a very interesting question and may resonate with some people who are particularly fascinated by the implications of profound ecological and social complexity and uncertainty. I’d start from the wicked problem direction and look at some of the more general papers on them which probably mention implications for the way we analyse problems and make policy prescriptions. And when such papers refer to economic methods, they probably by default are commenting on conventional neoclassical economic tools and policy instruments. So the example I gave was whether cost-benefit analysis tools (which use point predictions of future costs and benefits) are appropriate when there is deep uncertainty about future costs or benefits or should other tools that acknowledge the deep uncertainty be used. The ‘resilience’ and ‘robustness’ literature, and all the recommendations that come out of that, probably resonates closely to the wicked problem literature. Given the limited length of these essays, I’d be hoping for, say, four or so interesting insights for economics after a more general discussion of what wicked problems are.]