This brief, informative and lucidly written work touches on a wide range of issues which are both difficult and contentious. The author’s own views on the matters under discussion are clearly expressed, internally consistent and based on wide experience and deep understanding. Some readers may feel, however, that he has tried to cover too much ground, and that the smooth flow of argument rests too heavily at times on implicit assumptions about the capacity of economies and societies to deal with unfamiliar threats to traditional modes of behaviour.
The opening, much the briefest and most contentious part of the book, reviews some of the problems involved in estimating the value of natural resources and discusses the probable consequences of their depletion or degradation. The author provides a number of references to writers who take a more pessimistic view about future prospects than he does, but is optimistic that, in the long run, human ingenuity and natural sources of energy will prove adequate to meet the challenge, providing that societies organise their affairs with good sense. In the medium term, which is the long run for most of us, he is confident that an efficient market mechanism should be able to deal with “emerging scarcities”(though adding that in the short run, of a few months or years, “unexpected shortages of critical materials may cause extreme social disturbance”).
Not everyone believes it self evident that adequate substitutes will always be available, or that substitutes may not have unanticipated and severe adverse effects, even if markets are operating with a reasonable degree of efficiency (for which, perhaps, one may take the way that they operate in the United States as a fair proxy) and it would have been helpful if the author had provided more detail about the conceptual and empirical underpinning of his argument. Some problems caused by damage to the natural environment may not emerge by slow incremental change, but in a form closer to Catastrophe theory than the Neo‐Classical model. If we have to deal with serious damage not to a single resource but to several at more‐or‐less the same time, even with some advance warning, there might be severe strain on our capacity to adapt in time.
Many civilisations before ours have failed to adjust to what might seem today to be relatively minor changes in the environment; exposure to unfamiliar diseases has done for more armies than the brilliance of opposing generals. True, we have more information and better technology than did our predecessors, but whether we can cope with something thoroughly unfamiliar is matter yet to be tested. The inability of many contemporary societies to deal with problems that have been with us for as long as recorded history does not give strong grounds for confidence about the innate good sense and adaptability of the human animal.
Qualified optimism may, nonetheless, be the most appropriate basis for strategy, because it is scarcely practicable to persuade people to make major sacrifices in order to avert a catastrophe that, though possible, is unlikely to occur. The sensible course is to keep a clear head and be prepared to re‐assess the options in the light of new evidence. The author does, indeed, present a very useful account (in the second part of the book, when he is discussing global warming) of future costs which might be entailed if no, or insufficient, action is taken now, and recognises that legislators “will tend to minimise the risks and exaggerate the costs of mitigation”, as well as pointing out that “some parties will use legitimate concerns, such as greenhouse warming, to encourage society to adapt a ‘life style’ more congenial to them”. There are, it may be added, some who enjoy the role of Cassandra. Cooper is probably right, but his optimism, coming from such an authoritative source, may signal to busy legislators that they need not risk the displeasure of their constituents unless there is very clear evidence that a catastrophe is just beyond the horizon.
Much the strongest part of the book is that which deals with the difficulties involved in reaching international accord even where there is a large measure of agreement that some changes in behaviour are needed. There is frequently conflict between the technologically advanced nations and others about the allocation of property rights; the former arguing that rights should be vested in those with the capacity to “develop” the resources, with some form of compensation to those less advanced; the latter, fearing that this would mean their permanent exclusion from major benefits, favour the allocation of property rights to each nation, allowing it to use the resources directly or extract rent from others better able to do so. But the second option may lead to frequent re‐appraisal, producing both dissatisfaction and inefficient allocation of resources. Joint management has additional hazards. Different parties have different objectives, as the author points out in connection with the difference between those who think that killing of whales (for example) should be restricted to a sustainable level and those who believe that none should be killed. Political power and negotiating skills are often more potent determinants of the outcome of deliberations than the merits of the case, but there may be no practicable alternative. When there is high demand for resources (as with fish), the author comments that laissez faire will produce “a scramble for the resource, depleting it rapidly.”
Most trans‐border externalities involve a small number of countries and are in most cases most appropriately dealt with by those directly involved, although some may prove potential international flashpoints. Egypt and the Sudan may be able to contain, if not entirely resolve, disputes over access to the Nile; the waters of Lake Galilee and the Jordan River may require broader international mediation.
The author concentrates his attention on those matters of evident global interest, such as radio‐active fall out, depletion of the ozone layer, and global climate change. The greatest measure of effective action has been in respect of control of GFC emissions. This has been largely due, as the author points out, to “the convergence of several important factors, not likely to be present in other circumstances.” Adequate substitutes available at reasonable cost, production by a small number of firms, facilitating monitoring arrangements, and strong empirical support. Even here, however, progress is slow.
To achieve agreement over global warming will be a more formidable task. There is agreement that there will be a substantial increase in carbon dioxide concentrates in the atmosphere, but there is uncertainty about the effect on climate, with respect to direction of change as well as magnitude. Perhaps of even more significance, is the likelihood that climate change would have relatively little impact on advanced industrial economies, while having severe affects on countries heavily dependent on agriculture, forestry and fishing, to say nothing of small coral islands which, if not submerged, would suffer serious deterioration in soil fertility. Those who can most easily bear the costs of preventative measures are those who have least to lose (at least in proportional terms) if they are not taken. Moreover, many countries produce and use fossil fuels, and those with the most primitive technology produce the most carbon dioxide emissions per unit of energy. Deforestation, livestock and waste disposal add to the problem but are in many cases difficult to control, and remedial measures would often cause severe hardship to people already in, or close to, poverty.
The author reviews several options, basically those which will provide lower net income in the short run, because of mitigation costs, but which reduce the risk of substantial adverse effects later. He makes, as one would expect, a number of interesting comments about the adequacy of the empirical evidence and the theoretical assumptions that form the basis of rate of return calculations made by several of the most widely known contributors to the subject. His own approach to the problem is much influenced by his belief that the effects of climate change will be felt gradually over a long period of time. After saying that little is known about the rate at which climate change will take place (not quite the same as the rate at which the effects of climate change will become manifest), he says that it is likely to be slow, and this “greatly reduces the costs of adapting to it”, although “flexibility may be slow in some hard‐hit poor countries”. With respect to short run policy implications, he makes two very important points. A major obstacle to international co‐operation is “high uncertainty about the character, magnitude and regional impact of climate change”, and this calls for a global research effort. The second is that it is necessary to achieve “(a) workable international consensus on the dangers mankind faces”.
There is much else in this short book that is pertinent and stimulating, but the major impression left on this reader is how little any of us, including the author, know about the critical variables, and the extent, much greater than is inevitably present in all attempts at estimating rates of return on future income streams, to which the results turn on guesses about unpredictable events and responses to them.
