Environmental and natural resources – economics and administration
Price of a kilogramme of fresh air
LIFE’s emerging elite research area within environmental and natural resources – economics and administration
What is a good summer worth to you? Or one day of fresh air? Or what about a walk through a lush rainforest? It is almost impossible to put a price on some of the best things in life. Nonetheless, according to researchers at LIFE, it is important when you want to solve global challenges such as pollution, overfishing of the world’s oceans, climate change, protecting biodiversity and increasing deforestation in the tropics.
We asked anchorman and professor Bo Jellesmark Thorsen eight questions about LIFE’s emerging elite research area:
- If the elite research area becomes the success you are hoping for in the coming years, what do you hope to achieve?
- What are your considerations in relation to collaborating with companies, authorities or others that may have a particular interest in this specific elite research area?
- How will LIFE students benefit from this emerging elite research area?
- Where can you follow the elite research area's results?
- Who is behind?
Where is research into the environment and natural resources at the moment?
Bo Jellesmark Thorsen:
Many of our most important values are those we all share and which no one actually owns, for example the climate. The weather, wind, sun and rain are something which most people take for granted. We just expect that summer will arrive so we can grow our tomatoes. However, at the same time we are affecting the common good with our CO2 emissions, and the effect has an impact worldwide.
No incentive to change behaviour
The problem is that there is no obvious incentive for individuals to change their behaviour. We call this a market error: We look after that which has a measurable value, that which we formally own and can sell.
However, there is a tendency to overlook that which lies outside the market. And thinking like this obviously has consequences. Worldwide, there is a lot of focus on how we can solve problems such as climate change, overfishing, a threatened biodiversity, disturbing wind turbines, CO2 emissions etc.
Polluter pays model
One solution which most people are familiar with is the “polluter pays” principle, where those who pollute most and whose activities entail the greatest social costs are also those that pay most through taxes and quotas on the polluting activity. This is one way of using the market to regulate behaviour.
Command and control solution
Another classic approach is the “command and control” model, which involves setting standards. We saw it with the use of ozone-destroying freon gases in fridges. Smileys for pizza restaurants is another example. Altogether an attempt to influence the market processes that create a given problem for society.
How does LIFE contribute worldwide to research within the environment and natural resources?
Bo Jellesmark Thorsen:
First, you can say that our research is largely socio-scientific, but that it also relies on scientific input.
Our main purpose is to improve how society uses, regulates and manages the environment and natural resources through increased theoretical and empirical insight.
Contributing with international solutions
In the elite research area at LIFE, we are already making a name for ourselves by contributing to solutions which can handle major global challenges such as climate change, protecting biodiversity, pollution, overfishing the world’s oceans and deforestation in the tropics.
Effects on third parties
Now and in the coming years we will focus on a number of selected, central issues.
One of these is how so-called externalities are valued and regulated.
Externalities are the effects on third parties resulting from transactions between others. It might be pollution resulting from our consumption, or an improved local environment thanks to a new woodland area nearby.
We conduct research into how we can develop market-based regulatory instruments and planning approaches that can limit negative externalities, such as emissions of nutrients and climate gases. At the same time we will add positive externalities for the benefit of the economy.
What motivates people to act?
We are also very interested in what motivates people. We want to be able to understand why people choose to act as they do. Then we can better explain and predict their behaviour.
In this way, we can also take more effective steps to support the standards that make it slightly easier for us to do the right thing of our own accord.
It involves finding new ways of supporting our inner motivation. Only then can we influence people’s behaviour in a more sustainable and environmentally friendly way.
The classic economic models often ignore key aspects of how people act when they do so collectively.
Why turn off the lights when nobody sees it?
For example, simple economic thinking cannot explain why you and I choose to walk round switching off the lights before we leave the office – even though no one sees us doing so.
There is no quantifiable reward from other people for doing so. Instead, it reflects the fact that we show consideration for a collective standard – that we have a sort of collective or civil moral sense of responsibility.
Taking a sociological approach, in the elite research area we examine why people do something for which they are neither rewarded nor punished.
Is it because they want to live up to a notion of themselves in relation to society and its standards? Here we work closely together with sociologists, political scientists and economists.
More knowledge about Danes’ behaviour
In 2010, the Danish Council for Strategic Research awarded funding to a project which will provide more insight about Danes’ behaviour vis-à-vis the environment. And just before New Year, we also received new grants to study behaviour in relation to dietary patterns and information about health, ecology etc. Again, an area where the actions of the individual affect society at large.
Specific proposals for policy development
We are researching how you can design different regulatory mechanisms that make it easier to manage our natural resources and the environment.
We make concrete proposals for various policy developments. In other words, we work with the overall principles, and study whether one model or the other functions and why. Then the administrators take over and realise it in practice.
How can we derive more environmental value from woods and the countryside?
Seventy per cent of Denmark’s woods are privately owned. We are interested in how we can support farmers and forest owners in safeguarding and possibly augmenting the natural values they make available to the population.
For example, we can choose to do so with regulations stipulating that fields need to lie fallow for so long, or which dictate that x number of hectares of woods have to remain undisturbed. However, such an approach can have negative consequences, and it is not necessarily the most cost-effective.
A more equable approach would be to give landowners a conditional payment if, for example, they opened up new areas to the public for outdoor pursuits.
Or if they preserved areas which benefited biodiversity, for example protecting large, old trees that are important for fungi, beetles, insects and bats.
Which promising research projects would you otherwise like to mention?
BJT: I think there quite a number to choose from. In relation to the question about CO2 and regulation, at the moment we are studying, together with international partners, how we can reward the developing countries if they reduce their deforestation.
We are also looking at how this might affect those – often the poor – who are reliant on the forests. This is the so-called REDD+ programme, one of the results of the COP15 summit in Copenhagen.
Gathering data in the Amazon Rainforest
The large areas of forest in, for example, the Amazon, bind huge volumes of carbon, so deforestation releases a lot of CO2, which impacts the climate. At the moment we are gathering data among the poor communities in the Amazon basin to study how these kinds of agreements affect them. Very little knowledge is available on the actual effects for those “on the ground” of this high-profile political issue.
We also anticipate exciting results from our research into the interplay between consumption and the environment and people’s environmental behaviour in general. It is, among other things, a working hypothesis that a large part of the “low-hanging” fruit within energy savings perhaps should not be “picked” in individual households, because it is possibly too troublesome in relation to the benefit which the household derives.
What we call the transaction costs are maybe low for the individual, but big enough to get in the way of implementing measures which people believe have a modest benefit.
There are several ways in which we can try to solve these kinds of problems: We can either shift the costs and concentrate them on fewer players, for example by offering households assistance and guidance, while allowing the benefits to lie decentrally with the households. This can certainly be optimum when looking at all the various aspects.
However, you might also consider whether it is in some way possible to influence households’ motivation for taking on this often modest transaction cost. For example, who would like to be the most energy-efficient household in a particular residential area?
If the elite research area becomes the projected success in the coming years, what do you hope to achieve?
BJT: I think that can be put very succinctly: We will create lots of exciting new knowledge about the interplay between people and how people relate to the environment, nature and its resources.
It will be new research knowledge of international interest from which we can derive messages and guidelines which are relevant for practical environmental policies and regulations. That has to be the primary objective. Then we can work hard and hope that a successful outcome will also create improved opportunities for the elite research area’s researchers and students.
What are your considerations in relation to collaborating with companies, authorities or others that may have a particular interest in this specific elite research area?
BJT: Internationally, in the coming years we will strengthen our existing research collaboration with strong environments at UC Berkeley, Oxford University, University of Stirling and several others.
We have relations with a number of businesses through, for example, industrial PhD students and their participation in projects from e.g. the Danish Council for Strategic Research.
Particularly active at advising authorities and public institutions
The elite research environment is particularly active in relation to advising the authorities and public institutions such as the Danish Ministry of Food, Agriculture and Fisheries, the Danish Ministry of the Environment and the Secretariat of the Economic Councils. Here we focus on ensuring that our research is able to support and inspire political priorities and processes. And I think we enjoy considerable success in this respect.
How will LIFE students benefit from this emerging elite research area?
BJT: The elite research area will definitely give students more opportunities to engage in interdisciplinary projects that combine social science and science.
More study programmes and courses
Specifically, the elite research area is involved in several study programmes, and new initiatives at the University of Copenhagen will ensure that fruitful developments in the research area will also boost the choice of study programmes and courses available.
It concerns the MSc in Environmental Economics and the MSc in Forest and Nature Management as well as new initiatives such as the University of Copenhagen’s new climate-related MSc, Global Environmental Governance.
The elite research area is also central for the Erasmus Mundus programme in Sustainable Forest and Nature Management.
Where can you follow the elite research area’s results?
BJT: The elite research area has its roots in two institutes, and it is therefore a good idea to follow what is happening at the websites of the Institute of Food and Resource Economics and Forest & Landscape.
However, the best thing of all is to contact the relevant researchers if you want to know something specific.