Academic journal article Journal of Australian Political Economy

Marketising the Environment

Academic journal article Journal of Australian Political Economy

Marketising the Environment

Article excerpt

Is the environment the new market frontier? In the past, markets have commonly shaped processes of resource extraction and waste disposal that impact on environmental quality. However, their use as economic policy instruments for dealing with the environmental threat of climate change is relatively novel. Current policy proposals for 'putting a price on carbon' signal a form of 'marketisation' that requires particularly careful attention. Is it a progressive step toward meeting what now seems to be the greatest challenge for the future of humankind and the planet? Or is it an application of neoclassical economics and neoliberal politics that creates more dangers than it is likely to resolve?

Proponents of marketising the environment contend that it can drive the transition to a more sustainable economy. Indeed, to generate major changes in patterns of energy use, industrial production, urban form, transport and consumer spending is an enormous task. To make the changes happen quickly enough to avoid the possibility of catastrophic climate change is a particularly tall order. As the contributors to a special issue of this journal on 'Contesting Climate Change' emphasised, corporate interests are at stake as well as prevailing ideologies and consumerist behaviours.

The goal of sustainability, although commonly simply asserted, is itself complex and multi-dimensional. Economic sustainability requires the reproduction of productive capacity, including the replacement of depreciating capital, whether natural or human built. Social sustainability implies the reproduction of acceptable social structures and institutions, producing social cohesion. Ecological sustainability is a yet deeper concern, requiring the maintenance of biodiversity, ecological integrity and intergenerational equity. All such considerations are threatened by climate change. The scientific evidence of the severity of this problem has been cumulative and increasingly consensual (Diesendorf 2009, 2011). While proponents of 'putting a price on carbon' formally accept the need to make a transition to sustainability, their view of sustainability mainly emphasises its economic dimension.

The criteria for assessing the effectiveness of a transition to sustainability also require consideration. From a political economic perspective, it cannot properly be just a transition: it must be a just transition. This concern with justice may imply arrangements for redress or compensation for past wrongdoings: the 'make the polluter pay' principle is a case in point. A broader concept of social justice invites yet more considerations of how to create reasonable equality of opportunity, equality of outcome or equality of sacrifice. For example, some would say that socially just environmental policies require greater sacrifice by wealthier individuals, classes or nations. If so, there are implications for who should take the primary responsibility for leading the way towards more ecologically sustainable patterns of production and consumption. Questions of equity and ethics intertwine with political economic judgements about the likely policy impacts.

This is the context in which we need to consider the current proposals for 'putting a price on carbon'. We need to understand why a market-based approach has been adopted in response to the challenge posed by climate change. We also need to compare this market-based approach to other policy possibilities. The modest contribution that this article makes is to show that the 'marketisation' of the environment is not inexorable. Rather, it is a strategic policy choice that reflects particular economic ideas and interests. To emphasise this point, the article describes an array of policy approaches, ranging from (i) market creating to (ii) market adjusting, (iii) market regulating, (iv) market augmenting and (v) market contesting. This parallels the spectrum of 'light green' to 'deep green' positions in debates on the nature of environmental problems (Neumeyer 2010; Goods 2011). …

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