Survey Article: Trading Nature: When Are Environmental Markets (Un)desirable?
Stijn Neuteleers
Abstract
Should there be markets for environmental goods? For instance, should we trade carbon and biodiversity credits? The debate over markets and nature is often polarized. On the one hand, there is a position that assumes that ‘all nature is for sale’ or, more precisely, that there are no principled reasons for excluding certain environmental goods from commodification. Markets are seen as an important tool for dealing with environmental problems, precisely because these are market failures. A combination of existing markets, new markets (for example, carbon trading), and hypothetical markets (environmental valuation and cost–benefit analyses) should allow for socially optimal outcomes. This approach can be found in several major reports,11 Stern 2007; TEEB 2008; UNEP 2011. and is adopted by many governments and international institutions. On the other hand, the opposite position argues that ‘nature is not for sale’ or, more precisely, that most environmental goods should not be commodified. For instance, Robert Goodin and Michael Sandel both argue that emissions trading is morally problematic (see below).22 Goodin 1994; Sandel 2005. Sandel also criticizes other variants of nature commodification, such as trophy hunting and ticket resale for nature parks.33 Sandel 2012. Moreover, markets are often seen as the cause of environmental problems, rather than being a solution. These scholars plead for limiting the scope of markets, both real and hypothetical.44 See, for instance, O’Neill 2001. For authors such as O’Neill, ‘hypothetical markets’ refer to economic valuation, namely putting a price value on a good, but not trading the good (treating it ‘as if’ it is a commodity). The notion ‘real market’ is used here only to contrast with such hypothetical markets. A more radical interpretation considers these new environmental markets, such as emissions trading, as the newest stage of capitalism. The Green Economy, for instance, is seen as a discourse that legitimizes further capital accumulation, by turning environmental goods into commodities.55 See, for instance, Kenis and Lievens 2016. Environmental goods are here understood in the broadest sense: namely, all goods related to nature and the environment, such as wood, water, emissions, animals, species, and so on. The antagonism between the slogans ‘all nature is for sale’ and ‘nature is not for sale’ should not be understood too literally. Obviously, in their extreme version, both positions cannot be true. On the one hand, much of nature is for sale. Some natural or environmental goods are regular commodities: timber, oil, minerals, food, visits to nature parks, fish, land, and so on. On the other hand, most of nature is not in markets: the Earth, landscapes, global biodiversity, particular species, nature reserves, wild animals, and so on. Nonetheless, both slogans represent important positions in the debate, arguing for less or more market-based policy instruments for environmental goods; in particular, they argue for or against new environmental markets. The antagonism in the debate, however, veils the more interesting and relevant question: namely, in which cases are markets desirable and in which cases not? What is the demarcation criterion between desirable and undesirable commodification of environmental goods? While the question of demarcating nature commodification is still underdeveloped, it is also becoming increasingly relevant. First, the urgency of global environmental crises demands new solutions, and markets are put forward as a plausible mechanism. Second, some new markets extend beyond the traditional sphere of environmental goods: trading biodiversity and atmosphere seems to relate to more fundamental aspects of nature than trading wood, animals, and land. Almost all cases of existing nature commodification contain some controversial elements—for example, land can be bought and sold, but its use is very strictly regulated; drinking water is priced, but many hold that ownership should not be private; pet animals can be sold and bought, but once an animal becomes someone’s pet, reselling is relatively unusual. Traditionally, there were always limits on the sale and use of environmental goods. In the words of Polanyi, such goods are more embedded or entangled than typical manufactured goods.66 Interestingly, Polanyi himself claimed that land cannot be a commodity (‘a fictitious commodity’); see Polanyi 2001, pp. 71–80. Thus there is, and always will be, societal, political, and ethical debate about which aspects of nature can be commodified and to what extent. the that can the limits of the market not which markets are desirable or undesirable and we to the in of and against markets. for question is the debate on the limits to Sandel pp. of debate with of but environmental goods not into of these The such as Markets in the between the pp. however, is not about it always as such as wood, or from environmental goods to typical goods than to goods. The such as argues that these refer to and from market goods: the is it is and and it is Some environmental goods to into For instance, a nature is to of and can be the of a the it is for a to be it can be and goods are about and about as and is less for most environmental goods. in debate but their is that markets are undesirable for these a seems for environmental goods. Markets are for some environmental but undesirable for In to the question of of market the of that of the with the of market instruments by their markets and there are relevant The and of to be as a The is that with market such as and This will new environmental markets in carbon markets and biodiversity an and a The is the of these markets. The is to use these cases to the for and against environmental markets and to more in the The cases are in to that the positions of the all new environmental markets are morally and that of First, some new environmental markets are not morally ‘nature is not for sale’ position is to For the against environmental markets, in to that there are cases in which they not This will be for carbon markets. Second, some new environmental markets are morally other can the position ‘all nature is for sale’ be a more namely, that there is one against several environmental markets. This will be for biodiversity This will an important demarcation between desirable and undesirable environmental commodification. The of the the question: an environmental market is what of are on new environmental markets: carbon markets and of and biodiversity for the on nature of an economic with nature While these in in the and on biodiversity Some argue that for are more they for biodiversity but are less market-based than and more see Obviously, there are important between these markets. 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The of is one of the many and which also a the of the for which the to allow for (for instance, of to for to and to which biodiversity are not for the are not always very instance, should be to for biodiversity, or all Moreover, there is debate about the of and is to the outcomes. to be a often or to certain See, for instance, 2012. in the question the for commodification can be by See, for instance, of the for both biodiversity and carbon is the of the the are several only is there the of See, for instance, often there is also an of rather than for and What seems is a with an which about biodiversity and While it is the only to about and these that is and that we should be very in for they the of in they not for biodiversity be will not all the against biodiversity as for carbon markets. to that of the against a market a against by to on the fundamental with biodiversity it be to for biodiversity the of natural or The question here is there are also is that limits can be in but that limits are to the of for nature are often and See, for instance, O’Neill 2008; and their with the First, it is that nature is to for their food, from and so on. A of these can be with market nature a be to for its environmental goods market and but these are the market that economic to by (for example, markets (for example, carbon or hypothetical markets (for example, environmental cost–benefit Second, nature can be of a more For instance, many the that there is morally problematic the of such as there is a about such a or environmental such nature can be of the In to such value also be to the other of biodiversity, and For instance, there an international on In other the international that a to the and trading The that the of the or the not the we and a of to the land that we pp. is that a always can to certain goods from the market there is a about Some aspects of nature are very on a (for example, very but it is such a about or to many aspects it to biodiversity in The of valuation is nature is not only to for because of its but also because biodiversity is always embedded in a particular A is not only a of natural and but certain for The with is one cannot be for in that always is no that there is often against or natural a with important to a will as a the value is is it is an not to particular not which or carbon is or a good is or to the between and 2007; O’Neill which to a a valuation is a valuation of a or instance, a a a valuation is a valuation about the nature goods are because valuation is a new or a for an good there is no to goods are not to for The to nature to which important about such particular they that its is of the they from about the in as a no nature is of it is of A of such nature is that cannot be valuation is most typical for and traditional but and can also such with as the of the environmental that such a with nature is a good of a O’Neill goods are goods that to a and that are a to the in particular to a pp. A certain of goods that an of with nature is a for a however, the of being it with For with these are of their these the of these be that not that is a for a for all are other to in and so one cannot that should such a to nature or that should to Nonetheless, the in the that many hold such we to that biodiversity is also a nature is to many particular certain such these with such market and goods. one a that is to a by a cannot for all the The of such a for biodiversity market in a that not to carbon that nature can be or such a value to particular seems an position and a rather interpretation of the of market The is more The policy is a one that the for economic instruments and will not on the valuation of one but also on the for that of valuation all biodiversity is in a there are (for example, nature it is still for reasons to For instance, it is that some nature is so that all are of an species, for Nonetheless, there are no reasons there be for biodiversity will be only will there be the of environmental and biodiversity, and no some fundamental such as is and no more than is Nonetheless, markets are undesirable because of and biodiversity is the question of to with in a a to should we about and in a not to market the The and the of to for the nature by its new and the and on land the as a for both nature and The for nature a nature to of the and many This seems to the of a market a trade that both criticizes arguing that should the namely, the of a traditional and 2016. the is there is an of that cannot be In other that the of the market is and that we should to other Goodin criticizes markets in nature by an with Goodin Nonetheless, argues that an be so as are First, one and for the one the not to the that the morally problematic and should be in the that these or a for nature that is of for or should be and not for of such nature is is but one should the that it is a one that should be in the In that it to rather than for goods or, in a rather than a This is with to from market not so much the of as being a to be in the A is but is not as a What the in important or are policy should it is not a regular market For instance, one can for for biodiversity for the nature over a certain for an of they should be for of that is not to a it an The also to for or more in to a of for the nature This of the is in with in on the of on that are not the of but rather of the into the these are seen as market or as a tool to and 2016. of with to about in particular that all nature is Moreover, a in for nature While is an it is not and the that nature or the is the of commodification, market instruments are desirable or in an market the and that of the are for This is a trading between in a it that there can be environmental markets, in particular goods (for example, and (for example, market The of many environmental goods limits on commodification. This is the for biodiversity, but to many other environmental goods. to commodification are not only but also the here can limits to trading on the particular of for nature a value that cannot or should not be by market This value can be instance, the extreme of certain or more can to such nature For instance, in a certain natural for these of their such a can be a both an and a In such market with the nature of the goods nature in a a should we with such nature is for or it should be and not for can of markets Nonetheless, of nature can be or the policy should still the value nature the should be as a rather than as a cannot be by the The that market instruments are undesirable not that are such are desirable on the they the they are one to with the of particular environmental such as being or of the should the for these goods.