Economic Growth and Valuation of the Environment

Economic Growth and Valuation of the Environment

A Debate

Edited by Ekko C. Van Ierland, Jan van der Straaten and Herman Vollebergh

The debate on the valuation of nature and the environment, sustainable national income and economic growth is one of prime importance in environmental economics. Economic Growth and Valuation of the Environment deals with the fundamental approaches to calculating sustainable national income and their implications for the valuation of the environment.

Chapter 5: Roefie Hueting's perpendicular 'demand curve' and the issue of objective value

Herman E. Daly

Subjects: economics and finance, environmental economics, environment, environmental economics


5. Roefie Hueting’s perpendicular ‘demand curve’ and the issue of objective value Herman E. Daly 1 INTRODUCTION A logical difficulty encountered in the technical problem of correcting national income for the loss of natural functions has led Roefie Hueting into a fundamental conflict not only with orthodox economics, but also, surprisingly, with the dominant assumption of Western culture since the Enlightenment. That assumption of our modern culture is the rejection of teleology, of final causation or purpose, as a real and undeniable part of the world in which we live. I do not think that Roefie Hueting was seeking such a conflict – on the contrary I think it makes him uneasy. But Hueting is relentlessly logical and honest – characteristics that often lead one to situations of conflict. Furthermore, all of us are involved in that conflict whether we are aware of it or not. It is not just Hueting’s problem. My task in this study is to explain more fully and give reasons for what I have just asserted. To do that I should begin with some words about the technical problem that has led to the philosophical confrontation. 2 THE TECHNICAL PROBLEM The loss of natural functions, the ‘New Scarcity’ that Hueting (1980) has been a pioneer in identifying, explaining, and measuring, has traditionally not been recognized in national income accounting. Loss of environmental function has been an unmeasured reduction in both productive capacity and direct welfare. To account for this...

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