What Environmental Economists Think Every Conservation Biologist Should Know: Reply to Gowdy et al.

Abstract

We believe that Gowdy et al. (2010), in their recent essay in Conservation Biology, do a disservice to the cause of increased understanding between economists and conservation professionals. They give the impression that economists and the economic theory and models they use are much more naive of the shortcomings of market outcomes than they actually are. The end result is that the reader is lead to believe that economic theory is useless and should be abandoned altogether or at least until economists “discard the current core economic model.” Given that Gowdy et al.’s apparent objective is to make evident the weaknesses of economics as it is applied to the environment, we find it inexplicable that they fail to mention the existence of environmental economics, a field at least a half-century old (Ciriacy-Wantrup 1952; Gordon 1954; Krutilla 1967). In fact, the very raison d’etre for environmental economics is the development of theories and models for use in analysis of environmental goods and services (e.g., Randall 1987; Baumol & Oates 1988; Freeman 1993). The theme throughout Gowdy et al. is that “the purpose of Walrasian economics [is] to establish that perfectly competitive markets lead to maximum efficiency in resource allocation.” But this is not the purpose of Walrasian economics; it is simply the conclusion of the model if certain conditions are met. One or more of these conditions typically do not hold for environmental goods. Most economists and economics textbooks, from introductory