A challenge to economists

Volume 1l / N u m b e r 5/May 1980

A Challenge to Economists During the last two decades, we have seen a great increase in the awareness of the public to the threat of pollution of the environment and its impact not only on the quality of life on this planet but indeed to our survival. In some cases, there has been a bit of 'overkill' in drawing the attention of the public to some of the hazards of pollution and the consequences that could arise. Many alarmist views have been expressed. These have made good newspaper copy and have produced best-seller paperbacks. As a result of this public awareness of the impact of pollution on society, many environmental groups have been formed, which have brought and continue to bring pressure to bear on the political process for environmental action. In the long run, it is hoped that this action will benefit everyone in terms of a better environment in which to live. Many legislative measures have been introduced to control pollution nationally, and international conventions have been developed and brought into force to control pollution in international waters and to prevent one state from polluting the waters of another. Unfortunately, as with many fashionable ideas and issues which involve sectors of the public, and eventually are reflected in the political process, the interest and the pressure to maintain environmental quality cannot be sustained forever. This is particularly true when other important issues emerge that directly affect people, such as energy and unemployment. Eventually a decline of public interest and involvement in environmental issues is inevitable. Moreover, there may actually be a backlash, which can deal a severe blow to the cause for environmental improvement. We saw a rather rapid rise in environmental interest among the public during the late 1960s, and it probably reached a peak about 1970, after which there has been a general decline in the public interest concerning environmental affairs. One might say that the United Nations Conference on the Human Environment in Stockholm in 1972 provided a certain amount of sustaining power for global environmental interest, but once the United Nations Environmental Programme became established, the global interest tended to wane. Developing countries were told that they should guard against pollution from industrial development, but they often regarded this warning with suspicion that it was mainly coming from the developed countries, which had already derived great economic benefits from such development without much regard for environment. We are now back to the pre-environmental peak era when any action taken by the public or by governments requires sound economic backing. What is the value of environmental quality? How many more dollars will clean water produce? Is it going to produce more fish and feed more hungry mouths? Will it result in something more tangible than clean waters in which to bathe or a clean beach along which to stroll, or clean, fresh waters on which to row a boat? Unfortunately, we cannot always answer such questions in the affirmative. More and more people are turning towards increased utiliT~tion of our resources and a hi~her nroduction of our

economy, without paying too much attention to its impact on the environment. We have seen working peoples disenchanted by pressures brought to bear on multinational corporations to clean up their operations and improve the environment. Some corporations have closed down their operations in states where they consider the environmental regulations are too stringent, and have moved them to countries where there is less environmental control. The unemployed workers from the closed plants do not often look at the improved environment as compensation for not having a job. In fact, there has been considerable sentiment expressed that job security should not be tied to the lack of or the availability of environmental quality in a given operation, and that regulations imposing more stringent measures on a manufacturing plant should not pose a threat to the job security of the employees in that plant. The emphasis in developed countries is reverting to increased production of energy, food and consumer commodities, with less and less emphasis on environmental quality. It is much easier to gain support for fisheries enhancement, which will lead to a higher production of fish, for example, than it is to obtain support for research and monitoring of environmental quality and the effects that water pollution might have on aquatic life and wildlife. Such may be the case even though increased fish production may depend upon sustaining adequate water quality, and even improving it, on spawning grounds and in nursery areas. This applies not only in hatcheries and in artificial spawning channels but also in estuaries and in coastal waters, where juvenile fishes feed and where mariculture may be practised. Unfortunately, we cannot yet provide a financial picture of a fisheries resource husbanded under ideal environmental conditions, as compared with one sustained under degraded environmental conditions. We can usually only say that by improving water quality we should be able to increase the quantity of the product and improve its quality. Economists have been accustomed to working with tangible goods and to provide dollar figures for materials produced that can be sold at a given price. They are reluctant to estimate the value of a particular resource in terms of intangible returns. If we look at a fishless river and estuary and say that with research, control and implementation of research findings we could restore the river and estuary environmentally and rehabilitate the system to its pre-pollution production of fish, then economists might be able to put a dollar value on the efforts expended and equate it with the production achieved from those efforts. It would be difficult, even under the best of circumstances, to restore a river and estuary to the point where the value of fish produced could actually pay for the cost of restoration. It can hardly be said, for example, that the recovery of the River Thames, in terms of the fish produced, since pollution controls have been implemented, can ever pay for the research and treatment of sewage and other wastes discharged into the river. There are other intangible benefits, however, if one takes into account the aesthetics and amenities of a cleaner river, such as the elimination of foul odours from hydrogen sulphide during the anaerobic period of the river, the absence of floating sewage solids, scums and slimes that may have been oresent at one time. and ~enerallv a more

Marine Pollution Bulletin pleasing appearance of this body of water, then we may be able to present a more balanced budget of cost/benefit. What of the marine environment and the improvement in marine quality which has both tangible and intangible benefits? We can easily collect statistics on fish catches in the North Sea and in the Gulf of St Lawrence, and as long as they are not diminishing because of deteriorating environmental quality (and this is difficult to determine under the best of circumstances), we do not show any concern. Once it can be demonstrated that water quality is deteriorating, and as a result of this the fish catch is dropping, then some action can be taken based on diminishing fishing returns. If the fish quality is deteriorating because of high metals, organochlorines, taint or other characteristics attributable to water pollution, then once again we can justify expenditures on environmental improvement by controls on sewage and industrial waste discharge and on research to see how effective this is. In the absence of such clearly-defined trends, legislation is required to make such controls mandatory. We have a long way to go to reach a state of understanding, however, where we can separate effects of exploitation and natural environmental factors from pollution effects in fishery trends. The economist can be of little help here until fisheries and environmental sciences have reached that state of understanding. Much of the cost of oil pollution is in clean-up. We have seldom been able to calculate the costs of environmental degradation and destruction of renewable living resources due to oil pollution. Even in the costs of clean-up of an oil spill, however, the figures become astronomical. But what of the residues that are often left behind aside from their ecological impact? For example, tar balls that litter some of the beaches of the Caribbean have a considerable impact on the users of these beaches when their feet become soiled by the tarry residues present in the sand. The direct cost may be only in terms of cleaning off these residues in solvents and towels. However, to a resort owner, the costs are much higher, in that other visitors may be deterred by word-of-mouth reports that the beaches are littered with oily blobs and tar balls. The result owner may find that his clientele are rapidly diminishing because of such reports. Sewage pollution has its impact in many parts of the world and this will continue and increase with the growing population. In some areas, efforts are being made to control sewage pollution on bathing beaches in order to avoid a health hazard. Studies have shown, however, that there is little epidemiological evidence that serious communicable diseases are transmitted by sea bathing in sewagepolluted seawater, and therefore, some municipalities are not making much effort to reduce sewage pollution in coastal waters by treatment of sewage. Shellfish from sewage-polluted waters can be hazardous if eaten raw or partially cooked. The answer in some areas is that sewagecontaminated shellfish should be transplanted to clean water or put through a depuration plant before marketing. The costs of such transplantation or treatment can be easily estimated and they are borne by the consumer. But what of the recreational oyster collector who may want to eat an oyster on the half shell? Does he have to risk getting viral hepatitis or must he totally abstain from such practice?

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Again, what is the value of the clean water for the desired experience and quality of life? Marine environmental quality has benefits that are not easily quantifiable in monetary terms. These relate to the use of the sea for recreation and for the enhancement of the quality of life. Many people go to the sea strictly for relaxation. The value of recreational fishing to the economy is often estimated according to the fishing gear purchased, boats rented and commercial accommodation used. But sport fishermen sometimes go out on a boat or drop a line into the water from shore without necessarily expecting to catch any fish. In fact, questionnaires filled out by sports fishermen have revealed that catching fish was a rather minor objective in the whole experience of fishing. The psychological uplift that this recreation provides is more important. The opportunity to be out in a boat on clean water and to enjoy the air and sunshine is more rewarding to at least certain fishermen than actually catching a fish. Some people enjoy the sea for purposes other than fishing. They savour the freedom of going paddling or sailing, and this experience is enhanced by water that looks and smells clean. Some people may enjoy the seashore, without even going into a boat. They may relish a stroll along the water's edge, looking at the occasional starfish or cluster of barnacles and mussels, or they may be interested in the jetsam and flotsam that has drifted ashore with the tides and wind-driven currents. They may wish to sit on a log and meditate with the flesh sea breeze blowing through their hair. A small boy may get excited about sailing his little model boat in the clean inshore water, or the experience of his first attempts at casting a line baited with a worm to catch a pike perch. What is the value of such opportunities and such experiences? H o w does one put a value on the relaxation that one derives by watching the waves lap onto the shore and observing a ship go by? And what is the increased value of such an experience when it occurs in clean water compared with, say, oil-polluted waters or waters containing garbage and sewage solids? One might be able to start placing dollar values on such experiences and opportunities if one begins to examine the costs of social services, hospitalization and penal institutions. How many people might end up in hospital from physical and mental disorders because they did not have the opportunities for relieving the stresses of everyday life by being able to enjoy some fishing, a stroll along the beach or to take photographs of intertidal animals? How many people might end up in penal institutions because they turned to crime in the absence of better things to do and the opportunities offered by clean waters for more creative and soul-satisfying outlets? Perhaps some of the social costs that could be saved by allowing for recreational pursuits with a clean environment and renewable resources, which flourish in such an environment, could be used to calculate the value of clean waters. This is a challenge thrown out to economists. It may be a long time before they can answer many of the questions posed, because social values of unpolluted waters must still be evaluated. In the meantime, it may be necessary to await an environmental revival to help us control pollution more fully in our coastal waters. MICHAEL WALDICHUK