Conservation and Economic Efficiency: An Approach to Materials Policy

By Talbot Page; African Diaspora Studies Institute | Go to book overview

achieve it. Let the micro forces work themselves out--they will automatically achieve future livability.15

Many people still think that while the goal of holding constant the costs of material production is basically a good one, there need be no special policy tool such as a severance tax to achieve it. Market forces will automatically keep the costs of material production constant. However, this thinking is giving way to the idea that micro forces will not automatically provide food, energy, and other materials at constant or declining costs. For 100 years the cost of wood production has not been kept constant by market forces, and the government is betting hundreds of millions of dollars a year that the private market will not by itself develop technology to provide substitute energy materials in a timely fashion. As our ability to degrade the environment grows, we can no longer assume that somehow nature (or markets) will harmonize our actions with the conditions for permanent livability. Worse than the boy who cried wolf prematurely are the villagers who too carelessly thought that the wolf would never come.


Notes
1.
Part of the intertemporal inconsistency of the present value criterion has been elegantly modeled by Strotz. See Robert Strotz, "Myopia and Inconsistency in Dynamic Utility Maximization," Review of Economic Studies vol. XXIII ( 1955- 1956) pp. 165-180.
2.
Strotz affirmed that the intertemporal tussle is a frequent occurrence in daily living. People join Christmas clubs in January, locking themselves into monthly payments and knowing that they will regret the club membership in July, but they hope that the entire yearly plan will appear optimal from the vantage point of December. Strotz, "Myopia," p. 173.
3.
For a discussion of irreversibilities, see John Krutilla and Anthony Fisher, The Economics of Natural Environments: Studies in the Valuation of Commodity and Amenity Resources ( Baltimore, Md., Johns Hopkins University Press for Resources for the Future, 1975) chapter 3.
4.
The latter is a public good over time. One generation's contemplation of the resource base's permanent existence does not detract from another generation's contemplation of permanence. The inefficiency of markets in dealing with conditionally valued assets is analogous to the inefficiency discussed by Stephen Marglin in "The Social Rate of Discount and the Optimal Rate of Investment," Quarterly Journal of Economics vol. 77 ( February 1963) pp. 95-111; and by Amartya K. Sen in "On Optimising the Rate of Saving," The Economic Journal vol. LXXI ( September 1961) pp. 479-496. What Sen called the "isolation paradox" is a certain public good aspect of altruism toward the future. To paraphrase Marglin: Just as I am willing to save something toward increasing welfare in the next generation, I am even more pleased to have you save toward the future. Without a social agreement, a certain small amount will be saved. But I would be better off if I could strike a bargain to save more on the condition that others saved more. And others would be better off, too. Hence a private solution to the savings problem is not efficient.

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Conservation and Economic Efficiency: An Approach to Materials Policy
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Foreword xi
  • Preface xv
  • Title Page xix
  • 1 - Introduction: Toward A Materials Policy 15
  • Part One - Material Flows and Uses 17
  • 2 - Virgin Material Intensity and Waste Management 33
  • 3 - Competition Between Primary and Secondary Industries 34
  • Part Two - Intratemporal Efficiency 59
  • 4 - Discriminatory Pricing 61
  • 5 - Disposal 105
  • 6 - Taxes on VIrgin Materials 139
  • Part Three - Intertemporal Equity 143
  • 7 - The Present Value Criterion 170
  • 8 - The Conservation Criterion 188
  • 9 - The Criteria Reconciled 206
  • 10 - Conclusion 208
  • Appendixes 215
  • Notes 221
  • Notes 225
  • Notes 234
  • Notes 251
  • Index 253
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