Spitting In The Ocean
Science, Economics and the Chesapeake Bay Restoration Effort
Economic thinking has not been much a part of the Chesapeake Bay restoration effort to date. Even though restoring the Chesapeake Bay was always bound to be a large and costly undertaking, and even though it was clear in 1985 that meeting Bay restoration goals would have significant impacts on a lot of different economic actors, economists somehow never got a meaningful place at the restoration policy table.
This outcome makes it tempting to say that those who have been directing the restoration effort have ignored economics. But I'm not sure that explains very much.
Economists try to predict outcomes by applying settled but often esoteric theories to the most appropriate data they can find. To anyone who does not understand those theories, the things economists say are merely assertions. (And, generally, pretty opaque assertions at that.) While economists are generally competent to suggest ways to value non-market resources or to structure a proper market-based incentive, they are not very good at getting people to listen to those suggestions.
Amplifying economists' communication failures is a near total absence of economics capacity within any of the State agencies involved in the Chesapeake Bay clean-up. In Maryland, I don't know of any economists at DNR or MDE or MDA. Nor, for that matter, are there any economists directly employed by the federal agencies at the Chesapeake Bay Program. The not-for-profits generally don't have any economists on staff. So, even if an economist were able to raise some cogent point about how to better structure a Bay restoration policy, it is not clear how that point could prevail under the current institutional set-up.
(Philosophical question: Is there a message if something is sent, but there is no one to receive it?)
As if those constraints were not binding enough, using economics to serve the Bay program carries the added problem of uncertainty about which science to use. In applying economic analyses to Bay restoration, should economists use the data generated by the Bay Model which, by virtue of the vast area and numerous load sources it encompasses, is somewhat imprecise? Or, should they use empirical data from some smaller portion of the drainage. Economic models are famously dependent on the data they use. What is known about pollution loading and abatement that can be usefully employed by economists? And how can they know that they got the right science?
With all those limitations, is it any wonder that Bay restoration decision-makers have not incorporated economics into their decision-making? It clearly depends on what you mean by a wonder.
Because it is difficult or because there are many constraints, doesn't make pursuing an essential part of the problem any less essential. Unless you are one of those archers who can hit the bull's eye without looking, integrating Chesapeake Bay restoration policy with sound economics seems essential. It is too big a job to be done inefficiently. But, if policy makers ignore economic factors, there is little reason to expect Bay restoration to be done efficiently.
This is all painfully self-serving, coming from an economist with a consulting firm. But, that does not make it untrue. Operators may indeed be standing by. But so might there be efficiency gains from a clearer understanding of the relationships between the costs of pollution reduction and the prices that are paid for it. We have tried everything else. Maybe it is time to try economics.