Economic Calculation in the Environmentalist Commonwealth
16 Pages Posted: 14 May 2009
Date Written: April 20, 2009
Do environmental initiatives like carbon accounting provide a viable alternative to monetary calculation based on profit and loss? Economic insights about calculation and imputation suggest that they do not provide a reliable, rational guide to action. Non-monetary calculation of the environmental effects of action runs into the same problems of in natura calculation and commonly-owned means of production. The information needed for rational economizing does not exist when we forsake the price mechanism. A legal regime based on strict private property rights solves environmental problems. Relaxed restrictions on property rights can generate environmental benefits and reduce our contribution to environmental degradation. Examples include the elimination of restrictions on housing markets and privatization of municipal recycling and garbage collection.
Keywords: Environmental Economics, Calculation, Sustainable Development, Recycling, Price Mechanism, Private Property
JEL Classification: A10, B53, D02, D46, D49, D62, D63, D74, D83, H23, K23, N5, O13, P28, Q5
Suggested Citation: Suggested Citation