Chapter 4 Making sense of social values in economic environmental
4.1.4 Implications for policy-making
Another concern in context of social values are the implications for policy-making. Some scholars argue to limit individual choice sets due to incompatibility of consumer sovereignty and sustainability (Menzel & Green, 2013) or rather promote solutions based on societal preferences (O'Hara & Stagl, 2002) in order to enhance sustainability. For example, if human-nature relationships are a value themselves, merit subsidies could be implement for human-nature recreation (Hoberg & Strunz, 2018). Others question the adequacy of individual decisions with respect to public choices due to diverging individual and social time preferences (Marglin, 1963). The theories identified in Section 3.2 illustrate that society may hold values different from individual values, for example due to longer existence and/or merit wants. Thus, state intervention to correct individual preferences which are against sustainability may be justified if the socially accepted norms transcend consumer sovereignty. In the evaluation of certain goods different norms are already considered (Musgrave, 2008). Yet, it is not clear how individual preferences should be corrected if consumer sovereignty is dismissed. Hence, the challenge to identify desired social ends remains. Based on the assumption of preference endogeneity, participation and deliberation could play an important role for the development of criteria for correction of individual preferences and determination of socially preferred end-states. Ravenscroft (2019) suggested a new normative approach inherently linked to sustainability which emphasises the formation and articulation of shared social values in order for society to express how resources ought to be allocated before their actual allocation. This approach acknowledges that ends are not necessarily given and only emerge in the process (see Buchanan, 1987, p. 78).
Further, Renner (1999) argues that linking theories of constitutional economics to sustainability policy will make normative assumptions explicit in such a way alternative policy options can be deliberated upon. This may lead to more democratic decision-making, and criteria in line with sustainability may be guiding policy-making. Theoretically, institutions could be designed in a “good” way in order to incorporate sustainability as a factor.
In general policy implications derived from these theories are far from clear. Recommendations based on the neoclassical paradigm have the advantage that the only normative aspect is the efficiency criterion and policy makers can fairly easily include obtained insights into decision-making. In contrast, the above presented theories would introduce different criteria and, therefore, involve also more complex normative considerations. Thus, the ability to provide policy recommendations regarding the current societal framework are limited (Buchanan, 2008).
4.2 Concluding remarks
In Chapter 4 it has been illustrated that a consistent integration of social values into a preference-based utility framework is possible. This is the first time that a comprehensive economic framework for social values is presented. The theoretical basis brings together understandings of social values of ES in the current debate as well as the insights of so far neglected economic theories which are outside of mainstream neoclassical economics. The resulting framework is complex and pluralistic in order to account for the many topics and issues revolving around social values. Essential topics in context of social values were the value concept; the view of the individual and society involving questions of rationality, preference orderings and embeddedness; value scale; intention with respect to multidimensional motivations and plural values; the valuation process; and the question of who the value provider should be. To account for this multidimensionality of value, the framework integrated a natural, social and contextual sphere.
Based on a holistic view of society the role of institutions, the social environment, culture, and transcendental values was emphasized. Accordingly, individuals were considered to be embedded in society and nature. However, embeddedness does not suggest methodological holism. Instead, the sense of connectedness is subjective and is assumed to vary between individuals. Accordingly, also different degrees of interdependencies and variation in individual behaviour exist. Additionally, preferences and values were expanded beyond self-interest and individual value in order to account for interdependencies, preference endogeneity, multidimensional motivations, impartiality and impersonality. Hence, individuals are considered to be in a position to evaluate social wants. Further, it has been argued that individuals may have multiple preference orderings which can be ranked. This may also result in hierarchical and conflicting values. It has been assumed that rationalities are activated by the
valuation context as illustrated in the contextual sphere. The latter emphasises the role of economic valuation methods as value articulating institutions.
The implications for economic environmental valuation are rather severe. From a theoretical perspective it has been shown that the TEV concept can be extended in order to account for social values of ES. Social values may be directed towards other humans in form of philanthropic values motivated by commitment or towards non-human entities in form of weak anthropocentric intrinsic value. Yet, based on the anthropocentric and subjectivist approach of ES and economic valuation also these additional value categories are considered to ultimately reflect anthropocentric subjectivist values. However, these values are influenced by social factors and human-nature relationships as emphasised by the incorporation of the social and natural sphere.
In general, the implications seem quite severe, as preferences which are independent of individual welfare are not in line with the welfarist and utilitarian approach of mainstream neoclassical economics. Regarding the question how social values relate to conventional measures of individual welfare, it has been illustrated that there is not the social value nor the assigned value. Further, it has been shown that social values can be identified based on different criteria: scale, intention and process. With this in mind, the role of moral values, impartiality, civic virtues, altruism, etc. was emphasised. Thereby, they extend economic theory beyond utilitarian welfare measurements with the focus on the individual. In fact, it has been demonstrated that value indicators may have various meanings even if expressed on a common scale and additionally, values may be hierarchical and conflicting.
The existence of differing preference orderings and the role of the valuation context introduces normative aspects into economic environmental valuation. Although, as argued above, these normative aspects were beforehand implicitly given and were only made explicit. That is to say, also conventional valuation methods are based on a specific ethical framework, e.g. preference utilitarianism, and thereby, they are implicitly normative. Nevertheless, asking what preferences for ES should be is contentious. In general, it has been argued that “corrective”
interventions are justifiable in case of ES due to the nature of the good being complex. Two justifications were provided. Firstly, interventions can be justified based on ill-informed and/or distorted preferences. Hence, if ex-ante preferences are distorted due to the complex nature of ES, individual preferences do not necessarily correspond with individual welfare. In this case, information interventions were considered an appropriate intervention as discussed in the
context of preference economisation. Secondly, interventions can be justified based on the argument that the constituency has to be in accordance with the nature of the good. The underlying assumption is that common wants lead to diverging individual and social preferences. In this case, preference moralisation and positional modification were discussed as interventions. Valuation was then considered to be social acts characterised by a social learning process and/or diverging sets of preferences based on consumer or citizen perspective. Further, it was argued that transcendental values enter the valuation context only when they are perceived as relevant. These deliberative approaches often build on the theory of communicative rationality and implicitly assume that participation and democratisation of valuation processes are actually able to correct preferences and that a consensus about desirability can be reached. Put differently, the process is meant to define what preferences ought to be. Yet, it has been discussed that this assumption does not necessarily hold and that therefore, also deliberative processes may fail. Hence, values expressed by a group are not necessarily social and consequently it has been argued that the value provider is not a sufficient dimension to identify social values. Further, value indicators that reflect more than individual welfare changes and definition of desired social ends through participative and democratic processes leads to a dismissal of sovereignty and the efficiency criterion as normative evaluation criteria for policy-making. However, introducing more complex normative considerations reduces the ability for policy recommendations and more generally, implications for policy-making are obscure.
To assess the implications for economic environmental valuation and policy-making besides theoretical investigations also additional empirical evidence about social values is needed.
Various valuation approaches have been developed but they often lack a solid theoretical foundation. As discussed above, comparing deliberated preferences to conventional welfare measures resembles comparison of apples and oranges. Hence, there is a lack of studies that systematically analyse the role of social values in economic environmental valuation, particularly in regard to VAIs.
Therefore, in the following two chapters (Chapter 5 and Chapter 6), a valuation study tacking WTP for wolf management in Germany as an example will be presented. The aim of the study is twofold: Firstly, to test the validity of the conceptual framework developed in Chapter 4 and secondly, to compare the effect of three different valuation methods on the expression of social values.