* Assistant Professor of Law, Cornell University. B.A., 1995, Indiana University. J.D., 1998, Harvard University. For helpful comments on earlier drafts, I thank Robert Bone, Ronald Cass, Herman Daly, Kenneth Dau-Schmidt, Michael Harper, Jon Hanson, Lisa Heinzerling, Keith Hylton, James Salzman, Theodore Sims, and attendees at the Environmental Law Workshop at the Georgetown University Law Center and the Feminism, Corporations, and Capitalism Workshop at the Baldy Center for Law and Social Policy of SUNY-Buffalo. I especially thank Jeffrey Rachlinski and Stewart Schwab for their generosity in providing extensive comments and discussing at length the issues addressed herein. All misjudgments, errors, and omissions are my own.
1 Alfred North Whitehead, Science and the Modern World 288–89 (1925).
2 See Grover Foley, The Threat of Rising Seas, 29 Ecologist 76, 76 (1999).
3 See id.
4 See id.
5 See Jim Kirksey, Warming Puts Antarctic Ice Shelves in Full Retreat, Denver Post, Apr. 10, 1999, at A27.
6 See id.
7 Id.
8 See Foley, supra note 2, at 77
9 See id.
10 See id.
11 See id.
12 “Free market environmentalists” advocate the creation and clarification of property rights as a means of overcoming a variety of environmental problems. See, e.g., Terry L. Anderson & Donald R. Leal, Free Market Environmentalism: Hindsight and Foresight, 8 Cornell J.L. & Pub. Pol’y 111, 112 (1998). However, they do not typically advocate such solutions with respect to environmental goods and services that cannot be narrowly defined or easily withheld from free-riders. See id. at 128–30.
13 Anne Platt McGinn, Charting a New Course for Oceans, in State of the World 78, 78 (Lester R. Brown et al. eds., 1999).
14 The Kyoto Protocol is an agreement reached by member nations of the United Nations Framework Convention on Climate Change to reduce global emissions of carbon dioxide and other greenhouse gases. See Third Conference of the Parties (COP-3) to the United Nations Framework Convention on Climate Change, Dec. 11, 1997, 37 I.L.M. 22. Although President Clinton signed the treaty in 1997, the United States Senate failed to ratify it and the Bush Administration later refuted U.S. agreement with the treaty’s principles.
15 See, e.g., Mark Kelman, Choice and Utility, 1979 Wis. L. Rev. 769 (1979); Mark Kelman, Consumption Theory, Production Theory, and Ideology in the Coase Theorem, 52 S. Cal. L. Rev. 669 (1979); Duncan Kennedy, Cost-Benefit Analysis of Entitlement Problems: A Critique, 33 Stan. L. Rev. 387 (1981); Arthur Allen Leff, Economic Analysis of Law: Some Realism About Nominalism, 60 Va. L. Rev. 451 (1974); Richard H. Pildes & Elizabeth S. Anderson, Slinging Arrows at Democracy: Social Choice Theory, Value Pluralism, and Democratic Politics, 90 Colum. L. Rev. 2121 (1990); Donald H. Regan, The Problem of Social Cost Revisited, 15 J.L. & Econ. 427 (1972).
16 See, e.g., Jon D. Hanson & Douglas A. Kysar, Taking Behavioralism Seriously: The Problem of Market Manipulation, 74 N.Y.U. L. Rev. 630, 633–35 (1999) (describing efforts to incorporate cognitive psychological and other evidence of human behavior into law and economics); Christine Jolls, Cass R. Sunstein, & Richard Thaler, A Behavioral Approach to Law and Economics, 50 Stan. L. Rev. 1471 (1998); Russell B. Korobkin & Thomas S. Ulen, Law and Behavioral Science: Removing the Rationality Assumption From Law and Economics, 88 Cal. L. Rev. 1051 (2000); Jeffrey J. Rachlinski, The “New” Law and Psychology: A Reply to Critics, Skeptics, and Cautious Supporters, 85 Cornell L. Rev. 739 (2000); Cass R. Sunstein, Behavioral Analysis of Law, 64 U. Chi. L. Rev. 1175 (1997) [hereinafter, Sunstein, Behavioral Analysis].
17 Sunstein, Behavioral Analysis, supra note 16, at 1175.
18 See David M. Driesen, The Societal Cost of Environmental Regulation: Beyond Administrative Cost-Benefit Analysis, 24 Ecology L.Q. 545, 563–77 (1997) (assessing the merits of cost-benefit assessment of regulatory options in light of macroeconomic considerations such as long-term economic stability, employment maximization, and sustainability); Jeff L. Lewin, Toward a New Ecological Law & Economics, in Law and Economics: New and Critical Perspectives 249 (Robin Paul Malloy & Christopher K. Braun eds., 1995) (arguing for the incorporation of ecological economic concepts into legal analysis).
19 This narrowness of focus comes with good reason: law and economics itself has been restricted largely to applications of microeconomic theory. As Mark Kelman has noted, “When legal scholars and law students discuss the impact of economics on their understanding of law, they invariably think about microeconomics, not macroeconomics.” Mark Kelman, Could Lawyers Stop Recessions? Speculations on Law and Macroeconomics, 45 Stan. L. Rev. 1215, 1216 (1993) (emphasis omitted). Thomas Ulen, a leading law and economics scholar, has likewise noted that “[t]he novel aspect of law and economics scholarship is its use of microeconomic theory to examine the consequences of legal rules and institutions in the core areas of the common law—property, contracts, torts, civil procedure, criminal law and procedure, and constitutional law.” Thomas S. Ulen, The Lessons of Law and Economics, 2 J. Legal Econ. 103, 105 (1992) (emphasis added).
20 As will be seen, ecological economists do not devote significant attention to many of the “standard” macroeconomic subjects that readers may expect to encounter (i.e., inflation, business cycles, deficit spending, and monetary policy). Rather, they focus upon the more basic concerns of economic growth and total output, believing that fundamental conceptual errors have been made at that level, before one even addresses the more specific, technical macroeconomic subjects.
21 For reasons explained infra text accompanying notes 256–287, the necessity of adopting an ecological economic worldview depends on highly empirical questions about the ability of human technology to circumvent naturally imposed constraints on economic expansion, questions that will only be answered by the annals of history. This Article therefore does not ask the presently unanswerable question, “Are the ecological economists right?” Instead, it asks the more fruitful question, “What if they are right?”
22 See supra note 19.
23 See infra notes 27–207 and accompanying text.
24 See Ecological Economics: The Science and Management of Sustainability (Robert Costanza ed., 1991).
25 See infra notes 208–295 and accompanying text.
26 See infra notes 296–318 and accompanying text.
27 Indeed, Mill’s prescient thoughts are worth quoting at the outset:
If the earth must lose that great portion of its pleasantness which it owes to things that the unlimited increase of wealth and population would extirpate from it, for the mere purpose of enabling it to support a larger, but not a better or a happier population, I sincerely hope, for the sake of posterity, that they will be content to be stationary, long before necessity compels them to it.
John Stuart Mill, Principles of Political Economy 750–51 (Augustus M. Kelley ed., 1987). The current debate between mainstream and ecological economists can be understood as a debate over whether Mill’s stationary state has become, as he predicted, necessary, rather than merely desirable.
28 Kenneth E. Boulding, The Economics of the Coming Spaceship Earth, reprinted in Valuing the Earth: Economics, Ecology, Ethics 297 (Herman E. Daly & Kenneth N. Townsend eds., 1993).
29 See A.C. Pigou, The Economics of Welfare 149–79 (1920) (introducing and discussing the concept of market externalities).
30 Boulding, supra note 28, at 303.
31 Id.
32 Id.
33 See id. at 303–04.
34 Id. at 303.
35 Crew members aboard the Mir space station experienced a real-life example of Boulding’s metaphorical warning: “Somewhere up there in the starry void, two Russian cosmonauts and an American astronaut have been facing a problem Moscow’s mission control has been unable to solve: Their toilet tanks are overflowing.” Uli Schmetzer, Even Orbiting Cosmonauts Occasionally Need a Plumber; Mir Toilet Tanks Full and No Helper at Hand, Wash. Post, Nov. 12, 1996, at A12.
36 Boulding, supra note 28, at 297.
37 Id. at 304.
38 Mill wrote:
[A] stationary condition of capital and population implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the Art of Living, and more likelihood of its being improved, when minds ceased to be engrossed by the art of getting on. Even the industrial arts might be as earnestly and as successfully cultivated, with this sole difference, that instead of serving no purpose but the increase of wealth, industrial improvements would produce their legitimate effect, that of abridging labour.
Mill, supra note 27, at 751.
39 Boulding, supra note 28, at 304.
40 Id. at 305.
41 Id. at 307.
42 Kenneth E. Boulding, Spaceship Earth Revisited, in Valuing the Earth: Economics, Ecology, Ethics 311, 311 (Herman E. Daly & Kenneth N. Townsend eds., 1993).
43 Garrett Hardin, The Tragedy of the Commons, 162 Sci. 1243 (1968).
44 See H. Scott Gordon, The Economic Theory of a Common-Property Resources: The Fishery, 62 J. Pol. Econ. 124 (1954).
45 There has been some confusion over terminology. As David Pearce has noted, the term “commons” traditionally referred to commonly owned property that had certain social norms constraining its use. Thus, the “tragedy of the commons” did not, strictly speaking, happen to the commons. Rather the problem occurs with respect to “open-access” property, in which no constraints, legal or social, prevent overutilization of the resource. See R. Kerry Turner et al., Environmental Economics: An Elementary Introduction 210 (1993). The elegance of Hardin’s phrasing, however, weighs in favor of its use, despite the ambiguity.
46 Ronald H. Coase, The Problem of Social Cost, 3 J. Law & Econ. 1 (1960). In the category of articles with agrarian imagery, one might also mention the instant classic by Robert Ellickson. His exploration of the use of norms among neighbors to resolve disputes provides a vivid illustration of how the “commons” might be regulated by social, rather than legal, restraints. See Robert C. Ellickson, Order Without Law: How Neighbors Settle Disputes (1991).
47 Hardin, supra note 43, at 1244.
48 See Garrett Hardin, Second Thoughts on “The Tragedy of the Commons,” in Valuing the Earth: Economics, Ecology, Ethics 146, 146 (Herman E. Daly & Kenneth N. Townsend eds., 1993).
49 See David R. Hodas, The Role of Law in Defining Sustainable Development: NEPA Reconsidered, 3 Widener L. Symp. J. 1, 25–26 (1998) (“Current law mirrors the view of most economists that environmental externalities are an inconvenient theoretical contaminant in an otherwise elegant market system. Externalities are only an afterthought in a legal system driven by an individual/market oriented paradigm.”).
50 See Hardin, supra note 43, at 1245.
51 See id.
52 See id. at 1246.
53 Id. at 1247.
54 See supra text accompanying notes 38–39.
55 Hardin, supra note 43, at 1248.
56 Hardin, supra note 48, at 149.
57 Nicholas Georgescu-Roegen, The Entropy Law and the Economic Problem, reprinted in Valuing the Earth: Economics, Ecology, Ethics 75 (Herman E. Daly & Kenneth N. Townsend eds., 1993).
58 Herman E. Daly, Beyond Growth: The Economics of Sustainable Development 192 (1996).
59 See Georgescu-Roegen, supra note 57, at 77.
60 See id. at 78, 80.
61 Id. at 80.
62 Some have questioned whether the second law of thermodynamics represents a “truth.” This objection is addressed infra text accompanying notes 217–222.
63 Georgescu-Roegen, supra note 57, at 81.
64 Id. at 83.
65 Of course, this “long-run” is estimated to be some five-billion years long, see id. at 83, and appears all the more likely to include a developed human civilization within its benefice given advances in solar technology made since the time of Georgescu-Roegen’s lecture. Nevertheless, the massive time frame involved with the sun’s dissipation does not change the fact that solar activity is bound by the laws of thermodynamics. See infra text accompanying notes 217–222. More importantly, there appear to be significant current constraints on the availability of solar energy for human appropriation, given that one cannot advance the rate of solar entropic flow. See infra text accompanying notes 276–287.
66 Georgescu-Roegen, supra note 57, at 85.
67 See Nicholas Georgescu-Roegen, Energy and Economic Myths, in Valuing the Earth: Economics, Ecology, Ethics 89, 103–05 (Herman E. Daly & Kenneth N. Townsend eds., 1993).
68 Georgescu-Roegen, supra note 57, at 85.
69 See supra text accompanying note 22.
70 See Toward a Steady-State Economy (Herman E. Daly ed., 1973).
71 Jeff Gersh, Bigger, Badder—But Not Better, The Amicus Journal, Jan. 1, 1999, at 32, 35.
72 See Susan L. Smith, Ecologically Sustainable Development: Integrating Economics, Ecology, and Law, 31 Willamette L. Rev. 261, 272–73 (1995) (“The Brundtland Report catapulted the principle of sustainable development to paramount international significance.”).
73 See U-Md. Economist Honored in Netherlands, Wash. Post, Apr. 12, 1996, at B3 (describing Daly as “one of the first economists to focus on environmental problems and . . . the founder of the new discipline of ecological economics”).
74 See G. Pascal Zachary, ‘Green Economist’ Warns Growth May Be Overrated, Wall St. J., June 25, 1996, at B1.
75 See id.
76 See Economist at UM Wins ‘Alternative Nobel Prize,’ Balt. Sun, Oct. 3, 1996, at 13A (noting that Daly was awarded an honorary Right Livelihood Award for fostering a discipline “that integrates the key elements of ethics, quality of life, environment and community, in contrast to the mainstream obsession with quantitative economic growth and free trade”).
77 Herman E. Daly, Elements of Environmental Macroeconomics, in Ecological Economics: The Science and Management of Sustainability 32, 33 (Robert Costanza ed., 1991).
78 Daly, supra note 58, at 193.
79 See Janet N. Abramovitz & Ashley T. Mattoon, Reorienting the Forest Products Economy, in State of the World 60, 60 (Lester R. Brown et al. eds., 1999) (noting that “[b]etween 1980 and 1995 alone, at least 200 million hectares of forest were lost—an area larger than Mexico”).
80 Lester R. Brown, et al., Vital Signs 60 (Linda Starke ed., 1999).
81 See Marc Reisner, Cadillac Desert: The American West and its Disappearing Water 455 (1986).
82 See Lester R. Brown, Facing Food Scarcity, in The Worldwatch Reader on Global Environmental Issues 215, 222 (Lester R. Brown & Ed Ayres eds., 1998).
83 See Sandra Postel, Where Have All the Rivers Gone?, in The Worldwatch Reader on Global Environmental Issues 173, 178 (Lester R. Brown & Ed Ayres eds., 1998).
84 See Brown, supra note 82, at 223.
85 See Postel, supra note 83, at 179–80.
86 See Peter Bunyard, How Climate Change Could Spiral Out of Control, 29 Ecologist 68, 71 (1999).
87 See id.
88 Gersh, supra note 71, at 34.
89 See Daly, supra note 58, at 5–6 (recounting failed attempts to introduce any concept of the environment into a World Bank diagram that purported to show, “The Relationship Between the Economy and the Environment”).
90 Id. at 47.
91 See Peter Weber, It Comes Down to the Coasts, in The Worldwatch Reader on Global Environmental Issues 79, 86 (Lester R. Brown & Ed Ayres eds., 1998).
92 Joseph E. Stiglitz, Growth with Exhaustible Natural Resources: Efficient and Optimal Growth Paths, 41 Rev. Econ. Studies 123, 124 (1974).
93 Daly, supra note 58, at 48.
94 Id.
95 See, e.g., John Naisbitt, Megatrends Asia 87 (1996) (reporting that “a billion Chinese want to become rich and buy millions of TVs, washing machines, refrigerators and videocassette recorders”); id. at 92 (arguing that China’s recent growth trend will result in a $7.2 trillion economy by 2001, equal in size to the current U.S. economy).
96 See Lester R. Brown, Who Will Feed China?, in The Worldwatch Reader on Global Environmental Issues 196 (Lester R. Brown & Ed Ayres eds., 1998).
97 Brown, supra note 82, at 229. Thus, China’s 1.2 billion people would consume nearly half of total global grain output, leaving the world’s remaining 4.5 billion people struggling to obtain even subsistence levels of food. See id.
98 See infra text accompanying notes 276–287.
99 See infra text accompanying notes 256–287.
100 Christopher Flavin, The Next Energy Revolution, in The Worldwatch Reader on Global Environmental Issues 56, 61 (Lester R. Brown & Ed Ayres eds., 1998).
101 See id. at 57.
102 Christopher Flavin & Seth Dunn, Reinventing the Energy System, in State of the World 22, 28 (Lester R. Brown et al. eds., 1999) (“Wind power is now economically competitive with fossil fuel generated electricity, and the market, valued at roughly $2 billion in 1998, is growing more than 25 percent annually.”).
103 See Flavin, supra note 100, at 60.
104 See Daly, supra note 77, at 35.
105 See Daly, supra note 58, at 27.
106 See, e.g., id. at 7 (noting that the World Bank “cannot acknowledge limits to growth because growth is seen as the solution to poverty”).
107 See id. at 27.
108 World Commission on Environment and Development, Our Common Future (1987).
109 Id. at 8.
110 Smith, supra note 72, at 262–63.
111 Framework Convention on Climate Change, 31 I.L.M. 849 (1992).
112 Convention on Biological Diversity, 31 I.L.M. 818 (1992).
113 Rio Declaration on Environment and Development, 31 I.L.M. 874 (1992).
114 1 Agenda 21 and the UCED Proceedings, U.N. Conference on Environment and Development (Nicholas A. Robinson ed., 1992).
115 Statement of Principles for a Global Consensus on the Management, Conservation and Sustainable Development of All Types of Forests, 31 I.L.M. 881 (1992).
116 Daly, supra note 58, at 1.
117 See id. at 2 (“Acceptance of a largely undefined term sets the stage for a situation where whoever can pin his or her definition to the term will automatically win a large political battle for influence over our future.”).
118 Herman E. Daly, Sustainable Growth: An Impossibility Theorem (1990), reprinted in Valuing the Earth: Economics, Ecology, Ethics 267, 269 (Herman E. Daly & Kenneth N. Townsend eds., 1993).
119 Daly, supra note 58, at 50.
120 See id. at 3. The classical economist Mill supported a similar notion, which he called the stationary state, in which the size of a population and its capital stock remained constant while technological and cultural improvements continued. See supra notes 27, 38.
121 To be sure, economists such as Nobel laureate Robert Lucas have developed the “microfoundations” of macroeconomics by exploring how the aggregation of individual rational behavior can impact (and undermine) Keynesian economic theories. See V.V. Chari, Nobel Laureate Robert E. Lucas, Jr.: Architect of Modern Macroeconomics, 12 J. Econ. Persp. 171 (Winter 1998). They generally have not, however, asked the far more basic question that Daly is asking: whether an increase in total output costs more than it is worth. See infra text accompanying notes 132–172.
122 See Daly, supra note 58, at 27.
123 See id. at 51.
124 Id. at 27–28.
125 Daly, supra note 118, at 271.
126 See id. at 271.
127 See id. at 271–72.
128 See id. at 270.
129 The productive capacity of the human economy generally increases with population size due to the increased availability of labor and, to a less quantifiable extent, greater opportunities for improvements in technology, skills, and knowledge. The carrying capacity of the earth decreases with population size, however, because the earth’s finite endowment of natural capital must be spread among an ever-growing number of people. Note that this is not, strictly speaking, a Malthusian argument. Malthus believed that humanity would eventually face social and ecological ruin because it was incapable of checking population growth. See generally Thomas Robert Malthus, An Essay on the Principle of Population (1798). History has of course proven Malthus wrong, at least with respect to a significant number of societies in the late twentieth century. See Reed Boland, The Environment, Population, and Women’s Human Rights, 27 Envtl. L. 1137, 1138 (1997) (noting that “[p]opulation stabilization has been achieved in some thirty countries”). Ecological economists accept Malthus’s premise that many natural resources cannot be replicated exponentially in the way that population size can, but they emphatically reject the proposition that there is something inevitable about population growth. Indeed, the very notion of regulating scale presupposes some ability on the part of society to regulate its population size (a primary determinant of scale).
130 See Boulding, supra note 28, at 303.
131 See id. at 303.
132 See Clifford Cobb et al., If the GDP Is Up, Why Is America Down?, 276 Atlantic Monthly 59, 70 (1995) (quoting Paul A. Samuelson & William D. Nordhaus, Economics (16th ed. 1998)). Economist John Vaizey voiced a pervasive corollary to this principle: “I must confess to an instinctive conviction that what cannot be measured may not exist.” Herman E. Daly & John B. Cobb, Jr., For the Common Good 31 (2d ed. 1994) (quoting John Vaizey, The Economics of Education 14 (1962)).
133 See Scott Allen, Deep Problems 10 Years After Exxon Valdez: Worst Oil Spill in US Has Lingering Effects for Alaska, Industries, Boston Globe, Mar. 7, 1999 (page unavailable).
134 See id.
135 See Environmental Protection Agency, 1994 Superfund Annual Report to Congress 41–43, 129 (1994).
136 See Janet N. Abramovitz, Nature’s “Free” Services, in Worldwatch Reader on Global Environmental Issues 150, 155 (Lester R. Brown & Ed Ayres eds., 1998). Although much of the United States has been “reforested,” such monocultural plantations provide an imperfect substitute for the ecological functions performed by diverse old growth forests. See G. Gordon Davis, Land Use Planning in Furtherance of Sustainable Development in Asia, 3 Widener L. Symp. J. 119, 135–36 (1998) (noting that “converting a natural forest to a tree farm would impair the carrying capacity of the supporting ecosystem”).
137 Scott Petersen, Discrimination Against Overweight People: Can Society Still Get Away with It?, 30 Gonz. L. Rev. 105, 108 (1994).
138 Jonathan Kaufman, Frustration With Crime Wave, and Criminals, Led To a Huge Surge in the Construction of Jail Cells, Wall St. J., Oct. 27, 1998, at A18.
139 See Maggie Gallagher, Fatherless Boys Grow Up Into Dangerous Men, Wall St. J., Dec. 1, 1998, at A22.
140 Similar examples abound. See, e.g., Cobb et al., supra note 132, at 70–72 (citing crime, divorce, mass-media addiction, natural disaster relief, and other examples of anomalous “growth”); Herman E. Daly, Introduction to Essays Toward a Steady-State Economy, reprinted in Valuing the Earth: Economics, Ecology, Ethics 11, 40–41 (Herman E. Daly & Kenneth N. Townsend eds., 1993) (noting that the medical bills necessitated by cigarette induced cancer and pollution induced-emphysema are added to GNP, and calling such expenditures “swelling, not growth”).
141 Daly, supra note 58, at 41.
142 Cobb et al., supra note 132, at 67 (quoting Kuznets).
143 See Daly & Cobb, supra note 132, at 443–507. Many others have conducted similar exercises. Robert Eisner, for instance, has been championing a major reform of national income accounting for two decades. See Robert Eisner, The Total Incomes System of Accounts, 65 Surv. of Current Bus. 24, 24–48 (1985); Robert Eisner, Total Incomes in the United States, 1959 and 1969, 24 Rev. of Income & Wealth 41, 41–70 (1978). Even before Eisner, William Nordhaus and James Tobin discussed the adjustment of GNP for a variety of factors, including correction for certain disamenities of urbanization, reclassification of expenditures into consumption, investment, and intermediate categories, and imputation of service value from consumer durables, leisure, and household work. See William Nordhaus & James Tobin, Is Growth Obsolete?, in Economic Growth 1 (National Bureau of Economic Research ed., 1972).
144 Daly & Cobb, supra note 132, at 445.
145 See id. at 464–65. The authors achieve this adjustment by using an income inequality index in which the distribution of income in 1950 serves as a neutral baseline. See id. at 465. Thus, when income inequality decreased during the 1960s, ISEW rose. Conversely, when greater inequities in income distribution occurred during the mid-1970s and 1980s, ISEW fell. See id. at 493.
146 See id. at 458.
147 Current national accounting systems simply calculate all expenditures on consumer durables as current income, rather than attempting to separate the transactions into a capital expense and an income stream. This leads to the ironic result that shoddy products necessitating rapid replacement indicate rising economic “welfare.” See id. at 466. Daly and Cobb take the more appropriate accounting approach of treating spending on consumer durables as a capital investment; thus, they exclude current consumer durables expenditures but impute an annual income component to the total measure of economic welfare.
148 See id. at 467–68.
149 See id. at 468–69. The authors do not count all of public health and education expenditures because they view much of the costs as “defensive” in nature. Citing Lester Thurow’s model of education as a sorting mechanism to signal “trainability” rather than enhanced productive skill, see Lester C. Thurow, Education and Economic Equality, in The “Inequality” Controversy: Schooling and Distributive Justice 170, 172 (Donald M. Levine & Mary Jo Bane eds., 1975), Daly and Cobb argue that much of education spending represents an attempt to maintain competitive employment status, rather than an actual improvement in the stock of human capital. “In other words, people attend school because the failure to attend would mean falling behind in the competition for diplomas or degrees that confer higher incomes on their recipients.” Daly & Cobb, supra note 132, at 468.
This aspect of Daly and Cobb’s calculation is open to considerable challenge. Even if competitive educational expenditures fail to increase one’s relative position in society and fail to increase national productivity, there still may be an intrinsic benefit from educational experience that accrues to the individual and should be counted as a contribution to social welfare. In other words, Daly and Cobb’s view of education as requiring tangible benefits to be considered welfare-enhancing may be an example of the same narrow economic perspective that they are attempting to reform.
150 See supra note 149.
151 Daly & Cobb, supra note 132, at 469.
152 See id. at 469–70.
153 See id. at 470.
154 See id. at 471 (calling such expenses a “real cost of industrialization and higher traffic densities”).
155 See id. at 471–74.
156 Daly & Cobb, supra note 132, at 474–77.
157 See id. at 477.
158 See id. at 477–78.
159 See id. at 478–82.
160 Although causation may not be scientifically contested, valuation is always a difficult issue. See id. at 471.
161 Daly & Cobb, supra note 132, at 471.
162 See id. at 475–76. Nevertheless, some might contend that at least some of Daly and Cobb’s current environmental costs do not impact overall welfare. For instance, some might argue that the loss of wetlands and farmland should not be considered an economic cost as these areas are likely being converted to other economically productive purposes. Regardless of the purpose for which the land is developed, however, there are still real costs associated with conversion inasmuch as humans have no reliable substitute for many of the services provided by wetlands and farmlands. Thus, if one is to credit the consumer dollars spent at a new suburban shopping mall, then one must also debit the irretrievable loss of arable land that was covered in the process. Daly and Cobb are merely attempting to arrive at a net figure for the value of industrialization—any other approach would provide a less than full depiction of economic welfare.
163 Id. at 482.
164 Id. at 484. Daly and Cobb use the production cost of ethanol, a plant-derived substitute for many uses of oil. See id. at 485. Given the difficulties of producing ethanol on a large scale, however, the author’s selection might overstate nonrenewable depletion costs as against other renewable energy sources that are less costly to produce and can replace oil in certain applications.
165 In particular, the authors attempt to assign a dollar figure to a hypothetical annual set-aside that would be required to compensate future generations for the costs associated with global climate change. See id. at 489–90. A similar methodology is used with respect to the production of chlorofluorocarbons and other ozone-depleting gases. See id. at 490.
166 Daly & Cobb, supra note 132, at 491–92.
167 This table is derived from id. at 462–63, tbl.A.1. The total differs from the sum of the individual items due to rounding.
168 Id. at 37. It is also interesting to note that a capitalist economy featuring such massive externalities becomes, in some respects, an economy of chaotic socialism. Externalized costs are borne ultimately by the public—in effect, they are socialized—but without even the minimal benefit of the central planning efforts associated with socialism.
169 Id. at 462–63, tbl.A.1.
170 Id.
171 See id. at 505.
172 Redefining Progress, a think tank specializing in the use and improvement of economic indicators to guide sustainable policy solutions, has continued Daly and Cobb’s work in the years following 1990. That organization’s index, dubbed the Genuine Progress Indicator (GPI), is similar to the ISEW but adds adjustment categories for such factors as volunteer work, leisure time, crime, and underemployment. The GPI portrays the 1990s as slipping even further away from sustainable economic activity:
Overall, the decline of the GPI in the 1990s has been the most rapid in five decades. It suggests that the recent financial boom, with the associated shopping spree, has masked an erosion in the real economy that the conventional indicators hide. Increasingly the U. S. is living off its capital—social and environmental as well as financial. In the parlance of policy experts, the economy has become rife with “unintended consequences,” as well as intended though unspoken ones.
Jonathan Rowe & Mark Anielski, Genuine Progress Indicator 1998: Executive Summary, available at http://www.rprogress.org/publications/gpi1998/gpi1998_execsum.html (last mod-ified Mar. 1999).
173 Gersh, supra note 71, at 36.
174 See Brian R. Binger et al., The Use of Contingent Valuation Methodology in Natural Resource Damage Assessments: Legal Fact and Economic Fiction, 89 Nw. U. L. Rev. 1029 (1995); Note, “Ask A Silly Question . . .”: Contingent Valuation of Natural Resource Damages, 105 Harv. L. Rev. 1981 (1992).
175 See Frank B. Cross, Natural Resource Damage Valuation, 42 Vand. L. Rev. 269, 297–320 (1989).
176 See id. at 273.
177 A recent issue of the Stanford Environmental Law Journal contained several articles on the concept and measurement of ecosystem services. See, e.g., James Salzman et al., Protecting Ecosystem Services: Science, Economics, and Law, 20 Stan. Envt’l L.J. 309 (2001).
178 See infra text accompanying notes 234–252.
179 See James Salzman, Valuing Ecosystem Services, 24 Ecology L.Q. 887, 893 (1997).
180 See id.
181 See id.
182 Id. at 894.
183 See Abramovitz, supra note 136, at 156.
184 See Nature’s Services: Societal Dependence on Natural Ecosystems (Gretchen C. Daily ed., 1997).
185 See Gretchen C. Daily et al., Ecosystem Services Supplied by Soil, in Nature’s Services: Societal Dependence on Natural Ecosystems 113, 125 (Gretchen C. Daily ed., 1997).
186 See Robert Costanza et al., The Value of the World’s Ecosystem Services and Natural Capital, 387 Nature 253 (1997).
187 See id. at 256.
188 See id. at 259.
189 Redefining Progress, Economists’ Statement on Climate Change, available at http://www. rprogress.org/publications/econstatement.html (last visited October 22, 2001).
190 This issue also has achieved great salience among legal scholars. See, e.g., John J. Donohue III, Why We Should Discount the Views of Those Who Discount Discounting, 108 Yale L.J. 1901 (1999); Lisa Heinzerling, Discounting Life, 108 Yale L.J. 1911 (1999) [hereinafter Heinzerling, Discounting Life]; Lisa Heinzerling, Discounting Our Future, 34 Land & Water L. Rev. 39 (1999); Lisa Heinzerling, Environmental Law and the Present Future, 87 Geo. L.J. 2025 (1999); Richard L. Revesz, Environmental Regulation, Cost-Benefit Analysis, and the Discounting of Human Lives, 99 Colum. L. Rev. 941 (1999) .
191 L. C. Gray, The Economic Possibilities of Conservation, 27 Q.J. Econ. 497, 515 (1913).
192 See Revesz, supra note 190, at 977–81.
193 Charles Perrings, Reserved Rationality and the Precautionary Principle: Technological Change, Time and Uncertainty in Environmental Decision Making, in Ecological Economics: The Science and Management of Sustainability 153, 155 (Robert Costanza ed., 1991).
194 Daniel A. Farber & Paul A. Hemmersbaugh, The Shadow of the Future: Discount Rates, Later Generations, and the Environment, 46 Vand. L. Rev. 267, 290 (1993).
195 Id.
196 See Daly, supra note 58, at 50–51.
197 See id. at 50.
198 Richard B. Norgaard & Richard B. Howarth, Sustainability and Discounting the Future, in Ecological Economics: The Science and Management of Sustainability 88, 90 (Robert Costanza ed., 1991).
199 See id. at 88–101. In an especially lucid article on the issues posed by discounting, Richard Revesz has proposed a similar demarcation between environmental regulation benefits that accrue to current and future generations. See Revesz, supra note 190, at 947–48. Like Norgaard and Howarth, he concludes that discounting is only justifiable in the former case. For intergenerational decisionmaking, Revesz proposes a “theory of intergenerational obligations” that combines elements of sustainability, distributive justice, corrective justice, and opportunity cost criteria. See id. at 1015–16.
200 Joseph Stiglitz, Growth with Exhaustible Natural Resources: The Competitive Economy, 41 Rev. Econ. Stud. 139 (1974).
201 Id. at 139.
202 See supra text accompanying note 192.
203 Norgaard & Howarth, supra note 198, at 97–98.
204 Robert M. Solow, The Economics of Resources or the Resources of Economics, 64 Am. Econ. Rev. Papers & Proc. 1, 10 (1974) (“The choice of a social discount rate is, in effect, a policy decision about . . . intergenerational distribution.”).
205 Id. Indeed, Solow argues that “no generation ‘should’ be favored over any other,” and that instead discounting should be viewed as simply a “concession to human weakness . . . .” Robert Solow, An Almost Practical Step Toward Sustainability, 19 Resources Pol’y 162, 165 (1993).
206 Norgaard & Howarth, supra note 198, at 98.
207 Heinzerling, Discounting Life, supra note 190, at 1915.
208 Mark Sagoff, Carrying Capacity and Ecological Economics, 45 BioScience 610, 614 (1995).
209 Michael Brower, Cool Energy: Renewable Solutions to Environmental Problems 13 (1992).
210 See Sagoff, supra note 208, at 614.
211 See id.
212 Id. at 614-15.
213 See Daly, supra note 58, at 28.
214 See id.
215 See id.
216 See id. at 28–29.
217 See Sagoff, supra note 208, at 612–13.
218 Id. at 612.
219 Herman E. Daly, Reply to Mark Sagoff’s “Carrying Capacity and Ecological Economics,” 45 BioScience 621, 623 (1995).
220 Sagoff, supra note 208, at 612.
221 Id. at 613.
222 Georgescu-Roegen, supra note 57, at 77.
223 See Vicki Schultz, Life’s Work, 100 Colum. L. Rev. 1881, 1924 (2000).
224 See Samuel Estreicher & Stewart J. Schwab, Foundations of Labor and Employment Law 36 (2000).
225 Abramovitz & Mattoon, supra note 79, at 76.
226 See Keith Jamtgaard, Farm Labor and Management, in Planning the Future: Developing an Agriculture that Sustains Land and Community 83, 86 (Elizabeth Ann R. Bird et al. eds., 1995).
227 Paul R. Ehrlich & Anne H. Ehrlich, Betrayal of Science and Reason 165 (1996).
228 See id. at 165.
229 Id.
230 See id. at 166.
231 See Abramovitz & Mattoon, supra note 79, at 76.
232 See id. at 75.
233 Herman E. Daly, Postscript: Some Common Misunderstandings and Further Issues Concerning a Steady-State Economy, in Valuing the Earth: Economics, Ecology, Ethics 365, 375 (Herman E. Daly & Kenneth N. Townsend eds., 1993).
234 Solow, supra note 205, at 164.
235 Colin W. Clark, Economic Biases Against Sustainable Development, in Ecological Economics: The Science and Management of Sustainability 319, 320 (Robert Costanza ed., 1991).
236 See Daly, supra note 58, at 54.
237 See Molly O’Meara, The Risks of Disrupting Climate, in Worldwatch Reader on Global Environmental Issues 27, 54 (Lester R. Brown & Ed Ayres eds., 1998).
238 See A. Mitchell Polinsky, An Introduction to Law and Economics 11–13 (1989).
239 See Daly, supra note 140, at 33.
240 See Hardin, supra note 43, at 1245.
241 See Abramovitz, supra note 136, at 150–51.
242 See Mona L. Hymel, The Population Crisis: The Stork, the Plow, and the IRS, 77 N.C. L. Rev. 13, 78–79 (1998). There are clear signs, however, that the revolution has ended: “Global grain production per person has slipped downward since 1985.” Id. at 79.
243 See id. at 80–81.
244 See id. at 82–83. Nitrogen from fertilizers can be toxic to humans, especially children. See id. at 84. Likewise, “[t]he EPA considers at least 62% of all pesticides to be carcinogenic or potentially carcinogenic.” Id. at 85.
245 See Abramovitz, supra note 136, at 161. The severity of this situation should not be underestimated: “One-third of U.S. agricultural output is from insect-pollinated plants . . . .” Id.
246 See Chris Bright, Bio-Invasions, in Worldwatch Reader on Global Environmental Issues 115, 123 (Lester R. Brown & Ed Ayres eds., 1998).
247 See id.
248 See id.
249 See Gordon, supra note 44.
250 See McGinn, supra note 13, at 83.
251 See Abramovitz, supra note 136, at 157.
252 See Harald Maass, Fresh Air in Beijing Comes in Tube; Uncontaminated Breathing Proves an Enticing Novelty, S.F. Examiner, July 2, 1995, at A13 (describing how in Beijing, one of the world’s ten worst cities for air pollution according to the World Health Organization, people have begun frequenting “oxygen bars” and purchasing “U.S.-manufactured machines that emit oxygen”).
253 See supra text accompanying notes 190–207.
254 See Daly, supra note 58, at 54.
255 Id. at 45.
256 Peter F. Drucker, Post-Capitalist Society 8 (1993).
257 See, e.g., Julian L. Simon, The Ultimate Resource (1981); Julian L. Simon, Resources, Population, Environment: An Oversupply of False Bad News, 208 Sci. 1431 (1980).
258 Solow, supra note 204, at 11.
259 See Georgescu-Roegen, supra note 67, at 92 (“One must have a very erroneous view of the economic process as a whole not to see that there are no material factors other than natural resources.”).
260 See supra text accompanying notes 217–222.
261 This would be true only if the predicate conversion to renewable energy were satisfied. As noted above, widespread adoption of renewable energy is a measure that appears to follow inevitably from the ecological economist’s worldview but only begrudgingly (and perhaps too late) from the mainstream economist’s. See supra text accompanying notes 217–222.
262 See, e.g., Wendell Berry, The Unsettling of America: Culture & Agriculture (1977); Duane Elgin, Voluntary Simplicity: Toward a Way of Life That Is Outwardly Simple, Inwardly Rich (1981); Paul Hawken, The Ecology of Commerce: A Declaration of Sustainability (1993); Fred Hirsch, Social Limits to Growth (1976); Amory B. Lovins, Soft Energy Paths: Toward a Durable Peace (1977); Juliet B. Schor, The Overworked American (1991); E.F. Schumacher, Small Is Beautiful (1973).
263 Daly, supra note 58, at 76.
264 See id. at 77.
265 Id. at 76.
266 See supra text accompanying note 261.
267 Sagoff, supra note 208, at 614.
268 Peter Vitousek et al., Human Appropriation of the Products of Photosynthesis, 36 BioScience 368 (1986).
269 Id. at 372. The figure is 25% for total global net primary production, including photosynthesis which occurs in the ocean. The higher terrestrial percentage is considered the relative constraint, given humanity’s primarily land-based existence.
270 W. E. Rees & M. Wackernagel, Ecological Footprints and Appropriated Carrying Capacity: Measuring the Natural Capital Requirement of the Human Economy, in Investing in Natural Capital: The Ecological Approach to Sustainability 362, 383 (A. Jansson et al. eds., 1994).
271 See Paul R. Ehrlich & Anne H. Ehrlich, Why Isn’t Everyone as Scared as We Are?, in Valuing the Earth: Economics, Ecology, Ethics 55, 57 (Herman E. Daly & Kenneth N. Townsend eds., 1993).
272 Harrison Brown, Human Materials Production as a Process in the Biosphere, Sci. Am., Sept. 1970, at 195.
273 Flavin & Dunn, supra note 102, at 22, 24.
274 See id.
275 Daly, supra note 58, at 107.
276 See Lester R. Brown, Feeding Nine Billion, in State of the World 115 (Lester R. Brown et al. eds., 1999).
277 See id. at 128.
278 See id. at 127.
279 See id. at 126–27.
280 See id.
281 See Brown, supra note 276, at 124.
282 See id. at 125.
283 See id. at 121.
284 See id. at 131.
285 See id.
286 See Lester R. Brown & Christopher Flavin, A New Economy for a New Century, in State of the World 3, 8 (Lester R. Brown et al. eds., 1999).
287 See United Nations, World Population Prospects: The 2000 Revision 6 (2001) (reporting projections of between 7.9 billion and 10.9 billion for world population in 2050, with a medium variant of 9.3 billion).
288 See supra text accompanying notes 236–252.
289 See Perrings, supra note 193, at 153.
290 Id. at 165–66.
291 Paul R. Ehrlich, Ecological Economics and the Carrying Capacity of the Earth, in Investing in Natural Capital: The Ecological Approach to Sustainability 38, 49 (A. Jansson et al. eds., 1994).
292 Daly, supra note 219, at 624.
293 Although a fuller treatment is beyond the scope of this Article, it must be acknowledged that the precautionary principle is, in many respects under-theorized and much in need of further analysis and research. The most obvious criticism of the principle, for instance, highlights the fact that the opportunity cost of “precaution” may in fact be more harmful than the cost sought to be avoided. See Frank B. Cross, Paradoxical Perils of the Precautionary Principle, 53 Wash. & Lee L. Rev. 851 (1996); see also John D. Graham & Jonathan Baert Wiener, Risk Versus Risk (1995).
294 Jay Hancock, Growth Can Be Bad, UM Economist Says, Balt. Sun, Oct. 31, 1996, at 1C (quoting Julian Simon, professor of business at the University of Maryland).
295 See infra text accompanying note 322.
296 See Jim Chen & Daniel J. Gifford, Law as Industrial Policy: Economic Analysis of Law in a New Key, 25 U. Mem. L. Rev. 1315, 1347–61 (1995); Driesen, supra note 18; Kelman, supra note 19, at 1227–76; Lewin, supra note 18.
297 See Robert M. Stern, Conflict and Cooperation in International Economic Policy and Law, 17 U. Pa. J. Int’l Econ. L. 539 (1996).
298 See Tony Caporale & Kevin B. Grier, A Political Model of Monetary Policy with Application to the Real Fed Funds Rate, 41 J.L. & Econ. 409 (1998); W. Mark Crain & Lisa K. Oakley, The Politics of Infrastructure, 38 J.L. & Econ. 1 (1995); Daniel R. Fischel et al., The Regulation of Banks and Bank Holding Companies, 73 Va. L. Rev. 301 (1987); Geoffrey P. Miller, An Interest-Group Theory of Central Bank Independence, 27 J. Legal Stud. 433 (1998); Geoffrey P. Miller, The Role of a Central Bank in a Bubble Economy, 18 Cardozo L. Rev. 1053 (1996); Dominick Salvatore, The International Monetary System: Past, Present, and Future, 62 Fordham L. Rev. 1975 (1994); Kate Stith, Rewriting the Fiscal Constitution: The Case of Gramm-Rudman-Hollings, 76 Cal. L. Rev. 595 (1988); Rajesh Swaminathan, Regulating Development: Structural Adjustment and the Case for National Enforcement of Economic and Social Rights, 37 Colum. J. Transnat’l L. 161 (1998).
299 See Howard F. Chang, Liberalized Immigration as Free Trade: Economic Welfare and the Optimal Immigration Policy, 145 U. Pa. L. Rev. 1147 (1997).
300 See Richard J. Pierce, Jr., Small Is Not Beautiful: The Case Against Special Regulatory Treatment of Small Firms, 50 Admin. L. Rev. 537 (1998).
301 See John J. Donohue III & Peter Siegelman, Law & Macroeconomics: Employment Discrimination Litigation Over the Business Cycle, 66 S. Cal. L. Rev. 709 (1993); Daniel J. Gifford, Labor Policy in Late Twentieth Century Capitalism: New Paradoxes for the Democratic State, 26 Hofstra L. Rev. 85 (1997); Kelman, supra note 19; Gillian Lester, Careers and Contingency, 51 Stan. L. Rev. 73 (1998); Gary Minda, Opportunistic Downsizing of Aging Workers: the 1990s Version of Age and Pension Discrimination in Employment, 48 Hastings L.J. 511 (1997); Andrew P. Morriss, Bad Data, Bad Economics, and Bad Policy: Time to Fire Wrongful Discharge Law, 74 Tex. L. Rev. 1901 (1996); Daniel Shaviro, The Minimum Wage, the Earned Income Tax Credit, and Optimal Subsidy Policy, 64 U. Chi. L. Rev. 405 (1997); Peter Siegelman & John J. Donohue III, The Selection of Employment Discrimination Disputes for Litigation: Using Business Cycle Effects to Test the Priest-Klein Hypothesis, 24 J. Legal Stud. 427 (1995).
302 See Edward J. McCaffery, Tax Policy under a Hybrid Income-Consumption Tax, 70 Tex. L. Rev. 1145 (1992); Shaviro, supra note 301; Nancy C. Staudt, The Hidden Costs of the Progressivity Debate, 50 Vand. L. Rev. 919 (1997).
303 See Vandana Date, Global “Development” and Its Environmental Ramifications—The Interlinking of Ecologically Sustainable Development and Intellectual Property Rights, 27 Golden Gate U. L. Rev. 631 (1997); Michael Wenig, Making Sense of Growth and Sustainable Development: Several Responses to Herman Daly’s Latest Book, 28 Envtl. L. 235 (1998).
304 See Phillip J. Cook & Gary A. Zarkin, Crime and the Business Cycle, 14 J. Legal Stud. 115 (1985); Llad Phillips et al., Crime, Youth, and the Labor Market, 80 J. Pol. Econ. 491 (1972).
305 See Daly, supra note 58, at 50–51.
306 See id. at 51.
307 See Sheldon Danziger & Peter Gottschalk, Do Rising Tides Lift All Boats? The Impact of Secular and Cyclical Changes on Poverty, 76 Am. Econ. Rev. Papers & Proc. 405 (1986) (describing popular argument that links poverty reduction to undifferentiated economic expansion).
308 See Louis Kaplow & Steven Shavell, Fairness Versus Welfare, 114 Harv. L. Rev. 961 (2001); Louis Kaplow & Steven Shavell, Should Legal Rules Favor the Poor? Clarifying the Role of Legal Rules and the Income Tax in Redistributing Income, 29 J. Legal Stud. 821 (2000); Louis Kaplow & Steven Shavell, Why the Legal System is Less Efficient than the Income Tax in Redistributing Income, 23 J. Legal Stud. 667 (1994) [hereinafter, Kaplow & Shavell, Why the Legal System]; Steven Shavell, A Note on Efficiency vs. Distributional Equity in Legal Rulemaking: Should Distributional Equity Matter Given Optimal Income Taxation?, 71 Am. Econ. Ass’n Papers & Proc. 414 (1981).
309 See Christine Jolls, Behavioral Economics Analysis of Redistributive Legal Rules, 51 Vand. L. Rev. 1653 (1998).
310 In 1996, the U.S. Bureau of the Census reported that there has been an escalating increase in income inequality since 1968: “[T]he ratio of the average income of the top 20 percent of households to the bottom 20 percent went from 10.2 in 1968 to 12.5 in 1992 and 13.6 in 1994.” Daniel H. Weinberg, A Brief Look at Postwar U.S. Income Inequality, U.S. Bureau of the Census, Current Population Reports, P60–191, at 2 (1996).
311 Allan C. Hutchinson, Life After Shopping: From Consumers to Citizens, in Consumer Law in the Global Economy 25 (Iain Ramsay ed., 1997).
312 Kaplow & Shavell, Why the Legal System, supra note 308, at 669.
313 See id. at 675 (“An argument sometimes offered in favor of redistribution through legal rules is that the tax system falls short of optimal redistributive taxation—perhaps because of the balance of political power in the legislature. This argument raises questions that we do not seek to address about the function of courts in a democracy.”).
314 See supra text accompanying notes 143–172.
315 Union of Concerned Scientists, World Scientists’ Call for Action, available at http:// www.ucsusa.org/about/callforaction.html (last visited October 25, 2001).
316 See supra note 14.
317 See supra text accompanying note 308.
318 See supra note 313.
319 See Lester Thurow, Dangerous Currents 216 (1983) (“One of the peculiarities of economics is that it still rests on a behavioral assumption—rational utility maximization—that has long since been rejected by sociologists and psychologists who specialize in studying human behavior. Rational individual utility (income) maximization was the common assumption of all social science in the nineteenth century, but only economics continues to use it.”).
320 Whitehead defined the fallacy as “neglecting the degree of abstraction involved when an actual entity is considered merely so far as it exemplifies certain categories of thought.” Alfred North Whitehead, Process and Reality, An Essay in Cosmology 8 (David Ray Griffin & Donald W. Sherburne eds., 1978).
321 See supra text accompanying notes 15–17.
322 Royal Society of London & United States National Academy of Sciences, Population Growth, Resource Consumption, and a Sustainable World (1992).
323 Whitehead, supra note 1, at 289.
324 See Daly & Cobb, supra note 132, at 53.