Environmental economics and the conflation of value and benefit

Abstract

This essay explores the relationship between willingness to pay (WTP) and whatever conception of value or benefit it may be thought to measure. The essay argues that WTP correlates with no conception of the good - no notion of better or worse - other than WTP itself. The paper contends that concepts such as 'welfare' or 'well-being,' rather than correlating empirically with WTP, function merely as proxies or stand-ins for it. If WTP fails to correlate with any independently defined conception of value, then environmental economics fails as a normative science. Even if WTP provided a meaningful measure of welfare or benefit, it could not serve as a criterion to assess the values that typically underlie environmental decisions. This is true because the reasons - ethical, religious, scientific, and political - that lead people to support or oppose a social policy often have nothing to do with the benefits those people expect that policy to afford them. This essay deplores the penchant of economists to evaluate on the basis of WTP all policy positions except their own. As an alternative, this paper recommends representative political processes, such as 'stakeholder' negotiations and collaborations, which offer deliberative, diverse, and therefore democratic approaches to resolving environmental disputes and solving environmental problems.