ETHICS AND THE LIMITS OF ENVIRONMENTAL ECONOMICS

The purpose of this paper is to establish the limits of the cost-benefit framework used by environmental economists given the acceptance of an ethic of environmental concern. Two approaches to environmental ethics will be considered - one based on the view that human beings are the focus of moral concern, and another based on the notion that moral concern can be extended to the non-human natural world as well. If human beings are morally considerable, cost-benefit analysis can be legitimately applied to environmental issues involving the pursuit of human well-being so long as those who suffer losses from environmental damage are adequately compensated. However, the application of cost-benefit analysis to environmental issues is inconsistent with the moral considerability of human beings in cases where environmental damage is harmful to human health and in cases where the natural environment is so highly valued that the compensation of damaged parties is infeasible. Moreover, cost-benefit analysis cannot be legitimately applied where non-human natural entities are viewed as morally considerable.