Economics and ecological disasters in the Philippines

Posted by: Michael Mandel on February 21

I don’t do as much environmental economics as I should, but I was really horrified by the February 17 mudslide in the Philippines which killed as many as 1800 people. It’s easy enough to treat it like a natural disaster, but there’s a sense in which this mudslide, as well as a 1991 mudslide which killed 6000 people, are the consequence of past economic development policies that encouraged overlogging. That’s according to Barbara Goldoftas, who recently published a book called Green Tiger: The Costs of Ecological Decline in the Philippines ( from Oxford University Press). [Conflict of interest alert: Barbara is a friend of mine, and I read early versions of the book].

Are such disasters an inevitable part of the industrialization process? Or is it possible to choose a development path which is not so short-sighted? I wonder.

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Reader Comments

Quints

February 21, 2006 03:57 PM

Why wouldn't they be an inevitable part of the industrialization process? I think a value is ascribed to risk. In this case, it was a very low value, because the risk was to someone other than the loggers and politicians creating the rules, and it was doubtful that the loggers would be held responsible, and the timeframe for the disaster was indeterminate. I think that the more you can tie the ramifications of an activity to the decision makers the less likely such a disaster will be, but there will always be some discrepancy between the consequences and the potential gain IN THE EYES OF THE DECISION-MAKER. I think that this not only applies at a class level - Poor villagers vs politicians, but at a generational level - exploiters of irreplacable resources vs future generations.

Brandon

February 22, 2006 08:22 AM

I believe capitalism - particularly the American brand of it which we've exported to the world - is notoriously short-sighted. Profit motive drives the model and the adult lifespan with which one can earn and enjoy that profit is very short. As a result, the aim of most businesses is to generate as much profit as quickly as possible regardless of the casualties. In recent years this has been exacerbated even further by the demand of public shareholders to see growth and profits on a quarterly basis. What we see, then, are businesses engaging in activities that are destructive to the environment, society, and even the company itself for the sake of the quarterly report - regardless of whatever vision the company otherwise expresses. For the most blatant recent evidence I point to Enron and Worldcom; though, most of us know damned well that this issue is far more prominent than just those two instances.

Nathan

February 22, 2006 02:34 PM

In general, to respond to the question that Mike posed, I believe that it is a likely part of the industrialization process but it is not inevitable. For instance, in the US we have a lot of building codes, geologic, seismic and other assorted surveys before development can begin. The net effect is that the price housing is drastically increased to pay for these effects. We as a country can generally afford this because we are richer. Effective zoning and regulation essentially eliminates substandard housing. As a result, we see a greater degree of homelessness. In less developed countries such as the Philipines, substandard and unzoned housing is much more readily available. Zoning requirements, such as they are, are necessarily less exhaustive, because the ability to pay for them is signficantly less.

To sum, wealthier countries will experience less disasters than poorer ones, because they are better able to pay for the remediation costs and have more effective governmental entities to enforce those building codes.

To answer Brandon, it really has nothing to do with Enron(?) and private sector exploitation.

Brandon

February 22, 2006 04:23 PM

Nathan, you either mis-read my comment, or failed to read it at all.

Nathan

February 23, 2006 07:27 PM

Brandon, I read your comment several times over.

Your theorem (and please correct me if I did misunderstand you) is that the very nature of shareholder(American) capitalism causes environmental degradation and destruction because it is focused on the short-term, without regard to the long-term consequences of its actions.

You regard this as a consequence of human greed, whereby because of the short period of time in which we are able to enjoy the bounty of this greed, we try to maximize profit and utilize it as quickly as possible regardless of the consequences.

You then cited WorldCom and Enron as two of the many examples of this problem.

Is that correct? close?

Brandon

February 24, 2006 10:38 AM

You are correct, with one exception. I cite WorldCom and Enron - and perhaps I should have clarified this in my post - as two of many examples of the short-term, quarterly thinking of corporations/Wall St.; not necessarily ones that directly resulted in environmental damage. Mike alludes to my hypothesis when he wrote, "there's a sense in which this mudslide, as well as a 1991 mudslide which killed 6000 people, are the consequence of past economic development policies that encouraged overlogging." So yes, I am suggesting that short-term thinking, due to the inherent greed (call it "acting in one's own interest" if you prefer) of American capitalism results in environmental damage.

ed

February 24, 2006 12:20 PM

I'm disappointed to see that Nathan looks at this in terms of pre-planning = costs = homelessness. I strongly disagree that the causes of homelessness are the planning processes that stop houses falling on peoples heads. I would attribute them to other legal structures which stop people living in short-term accomodation, ineffective mental health services, and other economic instruments (such as the tax regime) that skew incomes to that extent that incomes and housing costs are out of synch. Are you suggesting that everyone could be housed (regardless of the ethics) if only we would permit substandard housing?

Mike Mandel

February 26, 2006 09:18 PM

Relative to the comments, it would be interesting to know what the cost of remediation would be in the Philippines, and whether the primary obstacles are economic or political.

Bill Perk

March 7, 2006 03:51 PM

All you folks need to get acquainted with the late great Howard T. Odum's Crafoord Prize winning work in environmental accounting, which is based on his "emergy" -- spelled with an "m" -- methodology. Starting with the sun shining on this planet (and including the sun/moon tidal effects and the 'deep heat' of the earth) an "emergy evaluaton" can tell you how many "solar equivalent joules" (Sej) it takes to produce "whatever" -- including the article to which I am responding, Mike. When Odum's colleagues recently applied this methodology to the current consumption of renewable and non-renewable resources by humans on this planet, it could be shown that we are consuming such resources at a rate that would take "4 more planet earths" to sustain. This is twice as bad as the "ecological footprint" folks have estimated. And Kenneth Defeyes' 2005 book, "Beyond Oil: the View from Hubbert's Peak" bet that we would pass that peak by last Thanksgiving, give or take a month. All of which suggests humanity is on a totally impossible course which we need to dramatically change ASAP! Read the Odums' (Howard and Elizabeth) 2001 book, "A Prosperous Way Down" for cogent suggestions on how humans might hope to move to a more tenable path. Or go to this URL and explore it:
www.emergysystems.org -- I just attended their "4th Biennial Emergy Synthesis" Conference last January (after having attended an "Emergy and Complex Systems" workshop in Florence, Italy, last May). It should "open your eyes" to what is totally ignored by 99% of economists, to humanity's detriment.

Kimberly

March 22, 2006 01:46 PM

Hey, I like this page but it is missing some pictures. I think that you would get more people coming here if you added color and pictures. Well, have a nice day and talk to you losers tomorrow.

Bob

April 3, 2006 09:58 AM

Heyyy gangsterrr. wats crackin...nm here. jus chillim

Ken Donald

September 2, 2007 03:17 AM

ecological disasters are so hazard not only in our heaalth but also the progression of our country.

Thank you for your interest. This blog is no longer active.

 

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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