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Environmental Economics Seminar Series
Department of the Environment, Sport and Territories, 1996
ISBN 0 642 24878 8
Chairman: We are fortunate to have with us Bob Goodin, who will spend 10 or 15 minutes offering us his reflections on what has passed so far today, from the point of view of a philosopher. And philosophers have a particular interest in equity, I understand. We will then finish the proceedings with general discussion.
Robert Goodin (Research School of Social Sciences, ANU) Sessional discussant: Let me first claim the philosophical privilege of not having to know any facts or anything, and also the privilege of making politically impractical proposals. We go where the argument leads and philosophers just can't help themselves. If I am a bit disjointed in these reflections, I had no advance notice of the papers; I heard them when you did. So this is all back of the envelope stuff in a big way.
I want to say something though about the two key terms in today's seminar and a little bit about politics as well. As for the notion of equity itself, I guess we haven't had a very formal definition of it, and I don't intend to start now, but roughly speaking equity is not a philosophical term; rather it is an economist's misspelling of equality. Economists alone talk about equity really, and lawyers occasionally - and they mean something even different again by it.
Roughly speaking, equity equals equality. Within philosophy there are massive debates couched in terms of 'Equality of what?' There are various ways of filling out the phrase equality of welfare, happiness in older terminology, and nowadays wellbeing, which is one option. Equality of resources is another option. Equality of opportunities is another. Equal consideration of interests, or equal respect is yet another.
There have been philosophers who spend massive amounts of time debating the finer differences that each of these formulations might suggest. So you have the examples of people who are keen on pre-phylloxera claret, needing to achieve equal welfare, with rather more resources than people who aren't and who have more modest tastes. We don't want any of those, so it suggests we want equality of resources.
But then you wheel out the cases of the handicapped who need an expensive wheelchair to get around rather than make do with shoe leather, and there we are led more toward equal happiness or equal wellbeing rather than equal resources. And there are lots of frankly crazy cases, and sometimes even fairly common cases that you can use to distinguish at the margins between all these different standards of equality.
What I want to say about them is just that they largely converge for most practical purposes. In terms of who is in the top 10 per cent and who is in the bottom 50 per cent in the world's population, it doesn't matter which of those standards of equality you use, I bet you. So let's not let the finer points of difference that the philosophers might be preoccupied with preoccupy us for policy purposes.
We are interested not just in 'Equality of what?' but equality for whom. Philosophers and here I think we make common cause with economists, or at least most analytic Western philosophers fairly insistently say that we are talking about equality or equity for individuals. Occasionally perhaps we might want to be talking about equality or equity across culturally distinct communities David Bennett's Aborigines and Torres Strait Islanders come in here obviously as a prime example. But usually we are talking about equality or equity across individuals and the sorts of issues that were raised this morning about equity between nations. Negotiating international conventions and protocols are from the philosophical point of view, just as from an economic point of view, wholly and totally artificial. It is not what matters. Nations are of no consequence morally or economically either, I guess, except as barriers to trade and barriers to the fairer redistribution of the world's resources. Cultures might matter, nations don't.
Equality raises questions of equality across what. We have had those issues canvassed a bit today: equality across contemporaries both within nations and across national boundaries; equality or equity across time - future generations, maybe past generations too. And perhaps as well - though we haven't had much discussion of it today - equality or equitable treatment across various natural agents and objects. So you might want to put animals in here; you might want to put natural processes in here; you might want to put rocks in there. All of those things are, I think, involved in what we mean by equity-cum-equality.
We had in the first paper this morning and in Mick Common's background paper some discussion of equality of resources, I take it primarily, or perhaps equality of opportunities as they would prefer to see it: that we can equalise welfare across time by counting on substitutability of resources, substitutability particularly of built as against natural capital.
If we take this seriously, let me just say in passing, putting on my old political scientist hat, that what we might want to do is count on the same sort of technology, the same sort of built capital, that we are counting on to save us from having done an injustice to future generations. In Mick's background paper that is how we can justify using up everything we can get our hands on now so long as we leave enough technology to future generations so that they can make do with whatever we leave them, plus the extra technology to make better use of it, so that it is all hunky -dory and we haven't done them an injustice.
Well, let's take advantage of the same possibility of substitutability of technology for material resources to solve our current problems of equity between rich countries and poor. Let us transfer technology to the poor countries of the world. Let us indeed transfer the R&D shops of the world to the poor countries - relocate Bell Labs in Calcutta, and put the jet propulsion lab somewhere in South America and everything might be okay. It's another example perhaps of the proposal to use energy efficient gadgets to overcome the problems of CO2 emissions and greenhouse gases. Well, let us just hand out those gadgets free to the poor first, if we are worried within time about equity.
But that's by way of an aside. What I wanted to emphasise more, considering the issues of substitutability, was how we cash out notions of substitutability, what is to be substitutable and what that might tell us in turn about environmental values - my second topic of the day.
Substitutability, as Clive Hamilton said, is typically criticised by environmentalists and those who are trying to avoid the economistic line on environmental problems in terms of incommensurability. Sometimes that in turn is cashed out in terms of saying that these objects have infinite value. That's not quite the same. To say it has infinite value means that no amount of any other good can make up for any amount of loss however small in this good. There are very few things that we really think that is true of. There is some price - maybe very high - for which I would trade my finger. It's not an infinite value. To say the two things are of incommensurate value is to say that there is no common yardstick - not that no amount of one can compensate for any amount of the other, but that there is no amount of knowing how much of one is required to compensate for any amount of the other.
The one is too strong. To say that it has infinite value means that we can never make any trades across the things, and that doesn't seem right. The other is too weak. To say that they are of incommensurate value means there is no yardstick and that anything goes.
There is a wonderful story of Sartre being approached by one of his students during the Second World War. The student asked if he should go and fight the good cause for a free France and honour the claims of his nation upon him, or whether he should stay with his ancient mother who would be heartbroken if he were to leave her. Sartre said: 'Ah, well, they are of incommensurate value', then shrugged his shoulders and said: 'Flip a coin'. And that's the right conclusion if you are talking about incommensurate values: there is no way of judging. Any answer is right, any answer is wrong. It is pointless to worry about the issue at all. That's not right either.
So I think what we want to talk about instead is a model that goes something like this. Yes, we might have substitutes in the sense that I can be made as well off by being given a lot of money in exchange for an environmental degradation. I am as well off but I am differently off; I am pursuing different objectives in my life. I am leading a different character of life. The sort of thing that David's Aboriginals would say about the loss of their lands is: 'We have lost our identity, though we might be as well off in some global sense.'
The same sorts of issues arise in a much less dramatic case than that of the Aboriginal attachment to land with people who are being displaced for public works. If asked: 'How much will you sell your house for?', some of them would say: 'No amount. I don't want to sell my house. It's where my kids grew up.' 'But you can buy a much nicer house elsewhere.' 'Yes, that is true, but is it is not the house where my kids grew up, it is not my house. It doesn't have my personal history invested in it.' Similar issues arise in other cases than the Aboriginal case and they are important.
So some things in our value structure - in each and every one of our value structures, not just weird environmentalists but all of us who value family heirlooms and so on - are not substitutable in the sense that we are different. We are perfectly happy having more of this and less of that and more of that and less of this. It doesn't matter to us. They are not substitutable in the sense that they make up one for the other. We might be as well off in some indifference curve sense, but where we are along those indifference curves, which bundle of goods we have that make us as well off, matters to us. And it matters to us particularly that we are not shoved around among that set of things that makes us as well off without our consent. We want to lead a certain sort of life. We want to have certain sorts of ongoing projects. We have certain sorts of attachments. We could be as well off leading all sorts of other lives. They are substitutable in that sort of 'as well off' sense, but not substitutable in the sense of being interchangeable in the kind of life that we are actually leading and have chosen to lead.
At this point I want to come back to Clive Hamilton's model that future generations should have the same opportunities that we have, and draw a conclusion from that model that he didn't, or didn't explicitly draw. The conclusion is that for them to have the same opportunities that we have is for them to have the opportunities to do the same things that we do. Sometimes where new technology can perfectly substitute in a functional way for all technology, that's fine. But sometimes that would mean roughly the same obligation is imposed upon us as imposed upon any trustee watching out for the interests of an under-age ward: you keep the capital intact. You keep as wide a range of possibilities as possible open for that under-age ward so that he or she will have open to them a free choice among all those possible lives that she or he might lead.
I want to say a little bit more about the nature of environmental values, picking up on the two papers this afternoon that concern notions of water pricing and carbon tax, ideas of economistic user charges and all that sort of thing.
I think we all are perfectly happy and comfortable with economy in one connection but not in another. Let me see if I can prise them apart for you. The connection that I think we are all comfortable with in using economic instruments is in creating incentives for people to think what we think they should do in implementing policies that we have determined ought be implemented. Putting up the price of something is a good way to get people to do less of something that we want them to do less of. I take it that we are all happy with that.
The face of economy that some of us aren't very happy with is the bolder claim that is associated with both user charges and water pricing, and, I take it, the carbon tax. The bolder version of economy says that we need to find out what sorts of externalities these activities are creating, what sorts of external costs are being imposed on other people, price them in dollars, and then sheet those costs home to people who are causing those expenses to arise in the form of a tax or water price or something. The conclusion of that stronger claim, if we accept that that sort of pricing can be done and done effectively, is that as long as people pay the price, it is perfectly fine for them to engage in the activities because the price already contains the costs that they are imposing on other people.
It is a different and stronger claim. You might say, sure, we want to reduce the amount of carbon in the atmosphere, and the way we want to reduce it is by, among other things, charging people a lot of money for it. We might want to say that independently of using these economistic techniques to decide how much carbon we think is okay to have in the atmosphere. We may make that determination politically, or we may just pull a number out of the air, or we may make it by thinking in terms of how much realistically can we hope to get people to reduce emissions. We can use taxes and prices just to achieve our policy ends, without thinking that there is anything magical about the price we set, without thinking that the price we set necessarily encapsulates all the externalities, all the harm that is being done by those activities. So I take it that we are all happy with one but not with the other sort of use of economics and economic incentives in environmental policy.
That in turn led me to a further reflection on the nature of environmental values, coming back to the notions of being equitable and treating equally environmental values as well as human interests. That is the old argument within environmental ethics that you have all heard, I am sure, that comes down to an argument between anthropocentric and ecocentric values - between saying that the environment has purely subjective value for us, it just gives us a buzz, and saying that there is some objective value or objective attributes of the environment that are of value in and of themselves independently of any subjective buzz that we get out of it.
Connecting this to the pricing point, I want to recall for some of you, and tell some of you for the first time, a wonderful line that my friend Mark Sagoff has on all of these things. He says that willingness to pay, asking people how much they would be prepared to pay for environmental amenities is quite simply a category mistake. It's mistaking a judgment of worth for a judgment of truth. What you should be asking people when you ask them: 'How much is the environment worth to you?' is for some objective assessment of how good the environment is. In some cosmological sense, is it good or bad to have an environment with these properties? It is not a question of how much it is worth to you in dollar and cents terms. In his telling example, it is like asking people: 'How much would you pay for it to be true that two plus two equals four?' It is a nonsense, it is a category mistake. It is asking a price question about an objective truth.
I close with a political aside, picking up on a familiar standard economics notion of the second best. It has a political side as well, so let me call it the politics of the second best.
In closing his talk earlier, Michael Seery said that we shouldn't use water pricing policies to pursue social objectives. And we all know exactly what he means by that. We have heard economists say it to us often enough, and in some ideal state of the world, we ought not use water prices to pursue social objectives. We ought just have a lump sum capital transfer to fix up any distributional problem - the redistribution of capital assets that Clive Hamilton talked about this morning.
But if for some reason or other you cannot get a lump sum redistribution of capital assets in this country, or indeed across the world, then how best to pursue social objectives is an open question. If you can't pursue things in the ideal way, then the second best way to do it might be absolutely and totally different from the first best way. So it may well be that in the ideal world we ought have redistribution achieved through a lump sum capital transfer and water pricing used, as it should be used, just to determine how much water is used. It may be the ideal state of the world, but it is not the world we are in - not unless anybody can come up with a good idea like how to effect this capital transfer across the world. So given the state we are in, we may well want to use water prices, among other things, to achieve some social objectives.
To take another example, from Frank Topham's paper this morning, he suggested that we ought to pursue a standard of equal emissions per person, with a few knobs on, as our ultimate and ideal objective in greenhouse gas emissions policies. But what we should really be doing - it is a partial optimisation exercise that he is engaging in - is not pursuing an equal share of emissions per capita across the world, emissions of just one of the many natural resources that we use in our daily lives. We should be pursuing an equal share of all the earth's resources per capita across the world. And if we cannot achieve an equal distribution of all the earth's resources across everyone in the world, then it may well be that in the second best world we ought let the poor emit more. Maybe that would be equitable.
Henry Leveson-Gower (DEST): A couple of responses to Bob Goodin and a couple of questions to Michael Seery.
First, on the comment as to 'equality of' and that we don't need to fill in the blank there because when you look at the actual situation, whatever you filled the blank in with would lead to the same sort of identification of where wealth was distributed, I can certainly agree with that. The only thing is that maybe filling in the blank has a different value in terms of how you fill it in presumably will set the sort of objectives that you will be trying to achieve in changing the nature of that unequal distribution. It would set the dynamic and quality goals, and there perhaps you do have a connection with the environment. If you fill in the blank, for instance, with consumption per se or material consumption or something like that, then maybe you set in the policy responses obviously to get everyone consuming at the same sort of level.
However, if you start to look at a more qualitative idea of getting everyone to have a worthwhile, fulfilling life or something on those lines, you possibly will change the direction somewhat of what you are thinking about in terms of what you are trying to equalise, which has hopefully different consequences in its environmental impacts. I make that by way of comment.
Something occurred to me in keeping options open for the future which, in terms of irreversible change, I wonder whether people had thought about. I refer to moral options or moral structures or cultural norms. Some would claim that the public service ethic is under threat because of various changes and new ideas coming along and so forth. One option that could be closed is a certain societal value. You can imagine that once you destroy, reduce or get rid of a particular ethical idea, getting it back is probably quite difficult. In the same sort of way, if, say, you destroy the sense of connection - and probably the Aboriginal and Torres Strait Islanders may be an exception - if you take people away from a set of values or cultural values, then getting them back or recreating them might be very difficult. That also is a comment.
I have a couple of questions for Michael Seery. On the comment that one should not use pricing to meet social objectives. Did social objectives mean equity objectives or did they include environmental objectives?
Secondly, has Michael done any research into how pricing affects usage? I believe in Canberra a lot of water is used in the garden and if you increase the price, the one thing people can do is reduce their watering of the garden, but they don't tend to reduce water use in the house because people have to flush the loo, and launder clothes regularly as they don't want to wear them for a couple of weeks just to save water.
A third question that interests me was that I noticed Michael had removed the progressive pricing of water in Sydney. It seemed to suggest that the more water you used initially, the higher the price you paid per unit. But you had moved to a flat rate. I wondered why you had decided to move in that direction, as some people had decided that could be used to address equity considerations.
Michael Seery: On the social and environmental question, I was probably taking the social side as being more confined to the true social side. I wouldn't include environmental objectives in that. Ideally, you would want to include environmental objectives in pricing and shouldn't be using the so-called social obligations of authorities or of governments in terms of pricing. In other words, you should include the environmental costs, if you know what those costs are, but use some other mechanisms which are better targeted.
One of the biggest problems in using water pricing or any sort of utility pricing to meet social objectives or income redistribution objectives is generally that the outcomes are not very well targeted. The wrong people get the benefits. You might provide a rebate directly to pensioners. There are a lot of rebates provided to pensioners in New South Wales for water and electricity services, but those rebates do not necessarily go to the people who would be better off by receiving them. They may go to people who have a pensioner health benefit card but who live in a very high value property and use a small amount of water. They may be lone pensioners who live in their family home that they have never sold because it has historical value for them. But there may be someone else who is a single income earner with five children and who uses a very large amount of water and gets no benefit because they are not entitled to that particular pensioner rebate. So if you use better targeted mechanisms that are directed at those people, I think you get a much better process.
On the research into what affects water usage, we haven't done a lot of work in that area. In terms of impacts, the last year 1994-95 was the first full year of the high 65c usage rate. I am sure that if you looked at the consumption figures you would see that they are very low. So somebody running through the files in 20 years' time will be able to say: 'Sydney Water Corporation introduced this massive usage charge in 1993-94, and look what happened to usage. It went down.' And I have a graph to show that consumption went down over the years. But in 1994-95 it must be remembered that for six months of that period there were water restrictions in Sydney. So any signal that you might get about the impact or sensitivity of customers to the price increase is masked by the need to conserve water because of drought. Hunter Water Corporation in 1983 introduced usage charges and over the next couple of years their water consumption reduced dramatically. But one factor that people always ignore is that prior to 1983 people in the Hunter didn't have water meters. So not only were they not charged on usage, but nobody had any notion of telling them how much they were using. They just paid a flat fee and used the water until it ran out in the dam. So there are some mixed signals there. Someone needs to do some good time series analyses of particular customers.
On the point relating to the old progressive rate to the flat rate, I can't remember the arguments that we used for taking that course, but it was a conscious decision to move to the one flat rate rather than to have a progressive rate. Our main argument possibly would have been based on uniformity and one marginal cost rather than a number of marginal costs.
John Dargavel (Australia Institute): I wish to make a couple of points about Michael Seery's paper and then comment on another matter.
Michael said pricing should not be used to achieve social objectives. Well, I think pricing always achieves a social objective. It doesn't matter what form of pricing you have, it always has some implicit social construct, it is a political act, and we completely kid ourselves if we think that adopting some sort of pricing policy is value -neutral. There is no pricing policy that is value-neutral.
The other point where I disagree with Michael - and I am not quite sure what he meant so perhaps he could enlighten me - was when he said that user pays was an equity concept. I inferred from that that he took it that adopting the user pays principle improved equity. We have had a lot of discussion about what equity is and obviously by some criteria that would not follow. Quite obviously, the capacity to pay of Kerry Packer, or the marginal value of a dollar to Kerry Packer, is considerably different from that to even a senior economist like Michael.
The other comment I wish to make about today's discussion is that we have talked about different forms of equity but haven't really talked about different forms of the environment and our choice of the type of environmental issue that we select for analysis. I am surprised that hasn't had an airing today.
My mind was drawn to some research that was carried out in the Journal of Peace 20 to 25 years ago on the critique of the limits to growth debate. There are very substantial equity considerations in the choice of the environmental topic that we choose for analysis. So that in the limits to growth debate very typically the crisis that is foreseen is always comfortably 40 years off, and the greenhouse is the classic one. That enables us to ignore the fact that the environmental crisis is a very real effect in the daily lives of about a third of the world's people.
Michael Seery: I will leave the first point because we could get into a long discussion about it.
On user pays as an equity concept, my meaning of that would be that by adopting the user pays principle based on marginal cost, everyone who uses a unit of water or electricity or whatever the service may be pays the same amount for it. On that basis it is equitable. The argument is as to whether they can both afford the product. However, I am not sure about Kerry Packer's liking of Coca Cola.
The analogy I often think of in terms of water pricing is that the cost of a kilolitre of water in Sydney is half the cost of a 375ml can of Coca Cola. I know that we use two different things with the products, but Kerry Packer doesn't get charged generally a dearer price for his Coca Cola than I am charged. The same applies to water. But if we have the prices right, perhaps governments can use other instruments to give equity on an income basis.
David Butcher (World Wide Fund for Nature): I wish to raise a couple of points. The first relates to something said by Robert Goodin which I think is worth noting, and that was his definition of the transfer of equity to future generations. It was transferring the opportunity for them to use the types of resources we have today - effectively our transferring a good representation of those natural resources that we have available today to future generations for them to make the choice.
That then starts to move us away from having to decide what changes there are likely to be in the future so that we can decide for the future that yes, we will make sure that we transfer enough land for them to grow grain, for instance, for the future. What we should be doing in the area of living natural resources, the wider spread of biodiversity, is effectively transferring our bequest to future generations.
The other thing relates to an equity issue that hasn't really been covered. It is an intragenerational equity issue. While it is most probably the flip side of the greenhouse gas issue, it is one about inequitable recruitment of a natural resource. About the only one that is available at the moment, of course, is the marine resource. While all countries have an economic zone which they effectively control in terms of marine resources, those controls are basically down to how much someone will pay to recruit that resource. So we have got the central part, an international resource that anybody can recruit, covered by the Law of the Sea which is still pretty tenuous. We have got the coastal resource which is controlled by the owning country. And yet when you look at the marine resource that is recruited, you see that the vast percentage of that is recruited by developed nations.
Developing nations in many cases have a subsistence fishery industry. If you look at the amount of the marine resource that is being recruited on an annual basis at the moment, it equals about two and a half times the sustainable resource of the ocean. So you can then start to see that there is an equity issue that will come up in the very near future. If we as developed nations continue to use such a resource to that extent, then there will be a large number of people - far more in those developing countries than use the marine resource in the developed countries - who will be in a position where their resource becomes the corporate resource over a period of time. So how do you value that?
You can see it currently happening between developed nations - this year between France, Spain and Canada - and the concern about the recruitment of a resource inequitably. Canada has closed down its fishery industry and yet the remnants of that fishery industry are still being recruited by two affluent countries. It is being recruited, not because it is economic to do so but because those countries effectively subsidise their fishermen to go and recruit that resource.
If you look at the whole cost internationally, you have this incredible equation where the total cost of fishing worldwide is $US1.2 billion; the total revenue for fisheries worldwide is $US70 billion. So between those two figures is a gap of many billions of dollars which is an effective subsidy to go and recruit this resource. It is our proposition that most of that subsidy is paid by developed countries to use a high value capital infrastructure, those being fishing fleets, and some other social effects to go and remove a resource from the other side of the world which is effectively something that needs to be used and will need to be used by other people in other countries in the future.
Michele Smith (DEST): I have a question for Michael Seery. In relation to the scepticism that people have about the payment of dividends from government business enterprises, if you price at marginal cost and then decide that environmental costs should be included in that equation and have it reflected positively in prices, there will be an excess of revenue over financial cost. That seems to be a reasonable justification for dividend payments which represent revenue raised from the recognition of environmental costs rather than from tax per se. Has the payment of dividends ever been explained in those terms to those who have that opposition in New South Wales?
Michael Seery: Up until March this year one of the greatest protagonists of dividends in New South Wales was the Labor opposition. The current Treasurer, Michael Egan, was the promulgator of dividends in New South when he was previously in the Labor Government prior to 1988. So dividends have been there a long time and have gone in a very wide circle.
In regard to environmental impacts, the special environmental levy was a specific levy; it was not introduced as a tax but as a levy. It was paid into an environmental fund supposedly to pay for works. And yet it was one of the greatest sources of contention, particularly in one year when over $100 million in a special dividend was taken from the Water Board and put into consolidated revenue. It was argued by someone at the time that that amount happened to just match the environmental levy raised. It is a concern.
One speaker earlier mentioned what one should do with money raised. I think it is important that if you have a special levy or tax - whether a carbon tax or an environmental levy - what it is raised for is hypothecated to a particular activity rather than going straight to consolidated revenue. I think people might be more willing to accept that. I don't think they do.
Another issue in New South Wales is the matter of tolls. Tolls are clearly going towards payment for the infrastructure, and yet there seems to be a perceived view that tolls are not a great thing.
John Saw (Ecologica): I have a question for Robert to do with decision theory and category mistakes. I agree with Robert wholeheartedly about the kind of category mistakes he mentioned. But if one is involved in decisions about a project or decisions between different policies, approaches, technologies, is there any systematic way of trying to avoid category mistakes and putting a valuation or ranking, if you like, on a particular aspect of the environment? It might be, say, a small galaxia species that will be wiped out by the building of a hydro-electric dam, or a butterfly species lost in cutting down a copse of timber. In determining a ranking of, say, 10 elements of the decisions, it is very difficult to say how important is that galaxia or that butterfly species, is it not?
Robert Goodin: If you are to make a decision that will be justified, you have to come up with a ranking of how good things are. But that doesn't have to equate to a ranking of how much they are worth. How you justify how good they are in that ranking is then a tricky question.
John Saw: The ranking that I am referring to doesn't necessarily have anything to do with dollar valuations. Some of the categories may, but most of them will not. Most of them will be environmental aspects in which there will be major problems of evaluation, and they are subject to category mistakes.
Robert Goodin: If we ask the WWF whether a butterfly is more important than a snail, I doubt whether they will come up with dollar values. But I dare say they would have a good idea about how they could justify it.
John Saw: When arguing in a group decision-making process, is there any systematic way of establishing a ranking of that snail or butterfly or galaxia?
David Butcher: It has been done many times before. It is based, I suppose, on whether that species is part of or a linchpin of a greater system - for example, if pulling the butterfly out of the system means that a whole group of other animals or plants will crash, or if it is the only pollinator of a whole spread of particular parts in the system. This is often what has not been looked at very much in the past. Or in terms of parasites, a fish might control one of the major pest species in the area, so if you pull the fish out of the system you will allow the pest species to increase dramatically in number. But you can define those things. The butterfly might be a sub-species of a whole rank of butterflies, and it might only be saying that we have lost a little bit of the genetic material, which is most probably justified. But if in fact it is one of the linchpins in a whole environmental system, then you pay with enormous cost in future when that occurs. And that has happened many times.
John Saw: That is ecological systems analysis and is fairly clear. I was thinking of a more generalised approach.
David Butcher: Such as aesthetic values?
John Saw: Yes, they might be aesthetic values; they might be spiritual values. Is there any systematic way of presenting a case?
David Butcher: That was one way.
Robert Goodin: Any one of those would be fine, whether aesthetic, spiritual or whatever. The trouble comes in deciding how to justify an over-arching ranking that would incorporate environmental, spiritual, aesthetic or economic values. There are lots of arguments around to say that it is impossible. There is the theory that what is good is just an expression of your own personal preference, which is essentially unjustifiable - just that I happen to like it. So I suppose that most of us would go for some sort of monistic theory and try to incorporate the others within that monism as a sub-species of our value theory.
John Saw: It might come down to a political process.
Robert Goodin: For all of us - not just Aboriginals and Torres Strait Islanders but for all of us - certain attributes of our environment characterise our community. For Americans it is the grizzly bear and the Great Plains; for Australians it is the bush; for Islanders it is presumably something to do with the seas. The way that we identify ourselves as a people is not just that we are tribes, but that we are intimately tied with symbolic values embedded in the environment. That would then provide the over -arching way of integrating aesthetic, environmental, economic and all the other values. That is one way to do it.
Brett Odgers: I am interested in two particular barriers to the implementation of environmental policies which appear to be quite contemporary barriers. I refer to equity and jobs. A number of initiatives that have been taken in the environmental field have had to contend with the objection that it could mean a net loss in jobs or, perhaps more formidable, it could mean that there are equitable considerations which might postpone or even prove fatal to an environmental initiative - for example, the carbon tax, a matter that was addressed by Don Siemon.
I would have thought a coalition of social welfare and environmental and social justice groups would have been quite formidable, but you came to the conclusion that the carbon tax in this instance would not be effective enough.
I am inclined to think that you have under-estimated the benefits that might have been available from the exercise. I was particularly interested in the fact that you did not consider jobs and the net effect on employment and job generation as a part of your equity considerations.
I know it was a complex calculus that you entered into, but it would seem that you didn't take a further step which might have led to a different result. The outcome to me was surprising.
Don Siemon: Perhaps I should clarify what I said. The political position that we got to was to say in a sense that carbon taxation was not a particularly high agenda item for the welfare sector. If the environment organisations were pushing for it and took note of some of the equity implications, albeit that they were relatively minor in the scheme of things, then there was no reason why we should be kicking up a stink and saying that equity would suffer dramatically because of this. That relates to the political outcome.
My reading of the situation was that in terms of a whole range of policy objectives of the environment movement, it didn't come out with a whole lot of reasons why it should be a high priority. I am quite willing to say that that would be open to argument on all sorts of grounds.
In terms of jobs there is material in the paper which I did not give in my address, but in regard to the overall economic effects and the jobs issue there was discussion of that at the time and my view was that it depends heavily on precisely how it is done. The economic impacts of the carbon tax would be very different if it is involved in some other tax trade-off or whether it is there as an additional tax-and-spend item. I had observations to make about that.
I don't think anyone was suggesting that a carbon tax per se would necessarily generate jobs. I did refer to a debate in the environment movement in Victoria where there has been a long-standing discussion about the idea of trading off higher energy and resource prices more generally. This is aimed at raising the money from those factors to subsidise labour, in the belief that material capital is energy-made and resources-made material. The argument is that we have ever more capital intensity, which means we have ever more energy intensity; and that in order to reverse that process and restore full employment we need to put up the price of energy and use it to subsidise labour. That economic argument is not quite mainstream but I did refer to it.
Mick Common: On the contrary. If you wish to increase employment, it is an entirely mainstream economic argument and you don't need to subsidise labour.
Don Siemon: Well, in some ways it is mainstream, but as to some of the ways that I have seen it advocated, I wouldn't have said it was mainstream.
Mick Common: But the idea that you change relative prices to drive things in a particular direction is straight down the line mainstream economics.
Don Siemon: Absolutely, but my point here was that if you were expected to give an immediate substantial transfer from the sort of thing that was being talked about, I did not think it was a particularly big issue. A lot depended more on how it was done than the nature of the carbon tax itself.
That was my conclusion.
Welfare organisations and environmental organisations make a bit of a coalition, but in this case it was nothing like what was required to get up. In a sense, it wasn't a coalition as such so much as welfare organisations saying: 'If you want to run with this, we are happy with it and will not scream and shout. We will not put the kiss of death on it', rather than giving it a positive endorsement.
Henry Leveson-Gower: I would like to comment on the decision making factor, which I regard as pretty crucial.
Dealing with the issue of how in an ecological sense you decide which species are important, the project to link ecosystem function to biodiversity is quite interesting. There was a recent interesting collection of articles produced in 1993, edited by Schulze and Mooney, which basically concluded that the connections are very difficult to draw and there is an enormous amount of species redundancy, at least in the short term. This links into intergenerational equity, because a lot of species might be an insurance policy so that you do not know which are important and which are not. So the implications of removing a species may have quite long term effects.
In terms of the larger decision-making process, I found very interesting Bob Goodin's comment about an idea of the sort of person you want to be - that there might be equal welfare but you say: 'I am going to be that because that's the sort of person I am, that's the sort of direction I want to set.' Maybe in terms of decision-making in relation to a country, you also need a concept involving some sort of general agreement, within Australia or wherever, of the sort of country you want. Do you want a country that has quite a reasonable amount of rainforest? Do you want a country with values? There could be equal welfare. You could work out that in different situations people in different countries were somehow entitled to equal welfare. But is that the sort of country you want? Perhaps that is what the political process has to do to allow that sort of decision-making at a lower level.
David Bennett: I would like to make a short interjection about Brett's discussion on jobs which hasn't been taken up. As I am sure Brett is very well aware, it is a false choice, to use another philosopher's term, between jobs and the environment. It is probably closer to a choice between both or neither. The notion of trying to build these things into once again a system that is purely economically driven, I think has the same sorts of problems as dispossessing Aboriginal people from their land. By dispossessing a person from their job, you are also dispossessing them of an identity. However, we could use that in our favour to derive better jobs of which people could be more proud rather than less proud, given some of the ways in which things are working today.
Chairman: I will draw the formal proceedings to a close. That doesn't mean you must not talk to one another beyond this point.
I wish to thank everybody who has given a paper or been a discussant here today. The people who gave papers were all admirably and remarkably on time in the length of their presentations. I would like to thank you all for coming. That's it, it's all over, except in so far as you want to talk to one another!