A few days ago Martin Weitzman passed away. For environmental and resource economics that is a true loss indeed.
I’d like to say that I knew him in person, but I did not. It is fair to say though, that quite a bit of my early academic work is based on his. Then again one would be hard pressed to find an environmental economist who did not at some point come across Weitzman’s work, if only because his interests were so broad and he wrote well on all those subjects.
My first acquaintance with his work was in a course in natural resource economics where the teacher showed Weitzman’s result that the Faustmann forestry rule (see a very cool visualization here) and the golden rule from fisheries (and one for fisheries here) are essentially the same thing (even though the underlying models are rather different).
Once I started my minor thesis at the environmental economics chair group in Wageningen, I read a series of his papers on biodiversity measurement. One of Weitzman’s qualities was that he could write extremely clearly and he could use analogies well to clarify things. In the series of papers he describes the problem of biodiversity preservation using the parable of Noah’s ark and describes diversity as books (the genes) spread over different libraries (the species) where libraries have overlapping collections. The question then becomes which libraries should we protect to maximize the total knowledge saved? Why should we care about correct measurement? Well, to quote Weitzman on the subject:
“At the end of the day, all the brave talk about ‘‘win-win’’ situations, which simultaneously produce sustainable development and conserve biodiversity, will not help us to sort out how many children’s hospitals should be sacrificed in the name of preserving natural habitats.”
(If anything his witing could be a bit dramatic at times, but it is true that these choices sometimes have to be made).
Another branch where I read Weitzman’s work was that of declining discount rates. In forestry we deal with long time horizons, and as such the interest rate and exponential discounting wreak havoc on the value of future harvests, hence my original interest. Similar concerns arise in climate change and this is how Weitzman got drawn in. He shows among other things that if the future is uncertain, we should discount future benefits and costs at a lower rate than we do when we use exponential discounting.
Weitzman worked on many subjects, and no doubt I have neglected to mention much of his work. There are many other obituaries around that cover Weitzman in a more personal tone, or cover other parts of his work.
One last thing I’d like to mention about him is that it was clear that he looked over the disciplinary walls and got some good insights from doing so. I’d like to finish with a quote that illustrates that, as well as captures the heated debate that rages on between economists and ecologists about the possibility of infinite growth. Weitzman made the comment after a seminar at Brookings, where William Nordhaus presented an alternative model to the 1992 model limits to growth model. Unsurprisingly, Nordhaus’s conclusions were almost the opposite of those of limits to growth, or more precisely his conclusion was that the question of continuous growth is empirical. Weitzman commented after the seminar:
If Nordhaus is right that the question ultimately comes down to a difference in empirical world views, then what are the empirical differences, where do they come from, and why are they so large? […]
I think that there are two major differences in empirical world views between mainstream economists and anti-growth conservationists. The average ecologist sees everywhere that carrying capacity is a genuine limit to growth. Every empirical study, formal or informal, confirms this truth. And every meaningful theoretical model has this structure built in. Whether it is algae, anchovies, or arctic foxes, a limit to growth al- ways appears [in the long run] And Homo sapiens is just another species […]
Needless to say, the average contemporary economist does not readily see any long-term carrying capacity constraints for human beings. The historical record is full of past hurdles to growth that were overcome by substitution and technological progress. […]
This is the first major difference between the empirical big picture seen by mainstream economists and limits-to-growth conservationists. The second major difference is a little more subtle, to my mind. It concerns the possibility that humans can say at some point “enough is enough”; we have more than sufficient goods to go around and must begin seriously to limit output and consumption. Economists are skeptical of the possibilities for such self-limiting be- havior. Advocates of limits tend to be more optimistic that, in a state of general abundance, human attitudes toward further accumulation can change or be changed.
Cover Image Credit: Badia Fiesolana, Max Weber Lecture Martin Weitzman on 21 October 2015. https://www.flickr.com/photos/euiweb/22194060719
Mereconomics 