Academic journal article Review of Social Economy

Neglected Features of the Safe Minimum Standard: Socio-Economic and Institutional Dimensions

Academic journal article Review of Social Economy

Neglected Features of the Safe Minimum Standard: Socio-Economic and Institutional Dimensions

Article excerpt

Abstract This article describes and critically investigates core features of the safe minimum standard of conservation (SMS), as outlined by Ciriacy-Wantrup, which have been neglected, de-emphasized or poorly interpreted. Different ensuing interpretations and developments of SMS, aimed at giving it a theoretical basis and operationalizing it, are scrutinized. It is shown that the definition of features such as irreversibility, uncertainty, threshold and critical zone imply a socio-economic and institutional approach of SMS. Hence, endeavors to find a formal and positive foundation (game theory) or to identify SMS as an adjunct to cost-benefit analysis are unsuccessful. Rather, approaches assigning the definition of acceptable resource use to politics and society conform with SMS (e.g. by political norm setting or societal discourse). Furthermore, the paper discusses close normative relatives of SMS and identifies intragenerational distributional justice as a crucial variable for setting SMS. It is argued that SMS is a socio-economic and institutional approach; this should be the basis for further discussion and development of SMS.

Keywords: Safe minimum standard, resource conservation, irreversibility, game theory, cost-benefit analysis, social choice

INTRODUCTION

Often, when decisions about resource use have uncertain consequences and probably would irreversibly destroy the resource, economists turn to safe minimum standards (SMS) (e.g. Randall 1986, Hampicke 1992; Perrings et al. 1992; Perrings and Pearce 1994; Barbier et al. 1994; Rogers and Sinden 1994, Berrens 1996; Ekins 1997). Yet, ideas about what is a SMS and how it should be determined are vague and controversial (Berrens et al. 1998).

Two core writings have determined the discussion on SMS. The first of these is Ciriacy-Wantrup's book Resource Conservation (1963, first edition 1952) which defines and develops SMS for the first time. This book considers SMS as an economic base level in conservation policy, usually expressed in physical terms, which "should actually be realized under all conditions" (Ciriacy-Wantrup 1963: 261) in order to avoid economically irreversible depletion and hence looming immoderate social loss. The second important contribution is that from Bishop (1978) whose article made SMS widely known and accepted, and it is this interpretation of SMS that most authors refer to and cite. Following Bishop (1978: 10), a standard of conservation is adopted to avoid irreversible depletion unless the social costs of doing so are unacceptably high. The reason for the extensive discussion about SMS since Bishop's publication may be that a definition had finally been proposed which provided a definite means for applying safe minimum s tandards, which built a bridge between ecologists and economists, and which promised economic solutions to problems characterized by ecological complexity, uncertainty and irreversibility.

In the last two decades, however, SMS has been interpreted in a variety of ways and discussion has hardly gone beyond the theoretical stage. The authors of this paper assume that the reason for this unsatisfying situation is twofold: first, Ciriacy-Wantrup's writing on SMS is sometimes ambiguous, and second, fundamental features relating to SMS as outlined by Ciriacy-Wantrup have been neglected, de-emphasized or poorly interpreted.

The main purpose of this article is to outline and discuss critically Ciriacy-Wantrup's views about SMS, evaluate previous discussion of SMS in the light of this review, and to support the view that socio-economic institutional approaches provide promising possibilities for the further development of SMS, e.g. structured discourse approaches such as that inherent in Farmer and Randall (1998).

Therefore, first the authors describe and scrutinize the core issues outlined in Resource Conservation. This examination shows that some issues have been neglected or partially stripped of their content in recent discussions of SMS. …

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