Environmental Economics

Robert Stavins: Environmental Economics

Editor’s Note: Robert Stavins is the Albert Pratt Professor of Business and Government, Director of the Harvard Environmental Economics Program, Chairman of the Environment and Natural Resources Faculty Group at the John F. Kennedy School of Government, Harvard University, and Director of Graduate Studies for the Doctoral Program in Public Policy and the Doctoral Program in Political Economy and Government, and Co-Chair of the  Harvard Business School-Kennedy School Joint Degree Programs, and Director of the Harvard Project on Climate Agreements.

To read his full bio, please visit here, here and here.

eTalk’s Niaz Uddin has interviewed Robert Stavins recently to gain insights about Environmental Economics which is given below.

Niaz: Dear Robert, thank you so much for joining us in the midst of your busy schedule. We are so honored to have you at eTalks.

R. Stavins: Thanks for having me Niaz.

Niaz: You are one of the most influential voices in environmental economics and the field of environmental economics is more important than ever.  At the beginning of our interview, can you please tell us about environmental economics?

R. Stavins: In a market economy – the form of economic system that is now found in nearly all countries of the world – the cause of environmental problems are fundamentally economic, namely the fact that environmental pollution is an externality, a negative, unintended consequence of economic activity, whether carried out by individuals or firms.  In addition, the consequences of environmental problems have important economic dimensions.  For these two reasons, economics and economic analysis provide an exceptionally useful lens through which to examine environmental problems, so that they are fully understood, and so that as a result public policies can be designed which are environmentally effective, economically sensible, and therefore more likely to be politically pragmatic.

Over the past two decades, environmental economics has evolved from what was once a relatively obscure application of welfare economics to a prominent field of economics in its own right.  The number of articles on the natural environment appearing in mainstream economics periodicals has continued to increase, as has the number of economics journals dedicated exclusively to environmental and resource topics.  Likewise, the influence of environmental economics on public policy has increased significantly, particularly as greater use has been made of market-based instruments for environmental protection.

Niaz: Do you think environmental economics is conflicting with capitalism or market economy? Why or why not?

R. Stavins: At first blush, many people think of the phrase “environmental economics” as oxymoronic – an internal contradiction – since it’s either the economy or the environment.  Although there are typically trade-offs between environmental protection and narrowly-defined economic well-being (i.e., financial well-being), for the reasons I stated above, environmental economics is not an internal contradiction, but rather an effective discipline with which to study the performance of proposed and implemented environmental policies.

Niaz: What are the distinctive perspectives of environmental economics that make it the next big thing for entrepreneurs, innovators, economists as well as researchers?

R. Stavins: Given the threat of global climate change, which will bring seriously economic damages when it occurs and which will require significant economic sacrifices to mitigate, an environmental economic perspective is increasingly important for a broad range of sectors in private industry.

Niaz: Dear Robert thanks again for finding time in the midst of your busy schedule.

R. Stavins: You’re welcome Niaz.

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Further Reading:

1. Peter Klein on Entrepreneurship, Economics and Education

2. Derek Sivers on  Entrepreneurship, CD Baby and Wood Egg

3. F. M. Scherer on Industrial Economy, Digital Economy and Innovation

4. Diego Comin on Entrepreneurship, Technology and Global Economic Development

5. Stephen Walt on Global Development

6. Juliana Rotich on Social Entrepreneurial Innovation

7. Naeem Zafar on Entrepreneurship for the Better World