Valuing pollution : problems of price in the commodification of nature

In recent years, 'environmental economics' has provided the dominant logic underpinning policies for 'sustainable development' in the form of government managed price-based and rights-based mechanisms. The advocacy of property rights in environmental management is taken further in the libertarian 'free market' approach and this 'privatisation' perspective is reflected in the growing use of property rights instruments in climate change policy. This article examines the efficacy of using economic instruments in the environmental context where 'market ecology' promotes the commodification of environmental 'goods' and 'bads' and their management by market forces. It argues that the pricing of 'nature' or its useful properties is a crude abstraction that implies ecological values can be alienated, but this is incompatible with the material and relational qualities of such values. The limits of this conceptualisation are further demonstrated through an examination of the Kyoto Protocol's Clean Development Mechanism (CDM), a price and property rights instrument which enables private project developers in developing countries to produce carbon credits in order to offset greenhouse gas pollution in developed countries. The evident negative social and environmental effects flowing from implementation of the CDM reinforce the limitations of economic logic in the environmental context.