ALBUQUEROUE  JOURNAL    SATURDAY, NOVEMBER 4, 1995

Environmental
Protection Linked
With Economics

BY PHIL. LEATHERWOOD
Economics Instructor

	New Mexico Rep. Bill Richardson had a letter 
published in The Albuquerque Journal (arguing) 
that the Arctic National Wildlife Refuge and the 
great caribou herd that migrates there each year 
- was worthy of protection from threateened oil 
drilling. 
	A contrary view -- that the northern Alaskan 
plains could be exploited without great sacrifice 
- had been espoused in a Wall Street Joournal 
editorial two weeks earlier. 
	The debate reminded me of several arguments 
in my economics classes at Albuquerque Technical-
Vocational Institute. 
	Many students new to the study of economics 
come into the course with a built-in prejudice 
against it,  thinking that economics and the 
environment are founded on conflicting concerns. 
Economics, they believe, supports the interests 
of business and growth at the expense of anything 
and everything else,  including the caribou of 
northern Alaska.  
	It can take an entire semester  (unfortunately, 
sometimes longer)  for them to understand their 
mistake.  
	As much as economics is concerned with inflation, 
or supply and demand, or unemployment, it is just as 
concerned with environmental protection.   Eighteenth   
century economist Adam Smith wrote about an invisible 
hand that governs free markets.   This  invisible hand 
promises  economic  growth  and freedom from excessive 
prices, but it also guarantees what we call economic 
efficiency -- that goods will be produced only as long 
as their value exceeds the value of the resources used 
in their production.  
	Economic efficiency guarantees the continued 
existence of any valued resource, because resources 
become more highly valued -and higher priced --as 
they decline in number. Simply put, the less we 
have of something, the more it means to us.  
	As caribou populations get smaller, we are less 
inclined to sacrifice them for oil, for their skins 
or for anything. The problem is, the invisible hand 
often does not work in the real world. For the 
caribou the problem is two-fold.
	First, we do not have proper ownership rights 
established for them.  If someone actually owned 
the caribou, our value for them could be expressed 
in proper prices and we could bid for them, 
possibly outbid- ding the oil interests.
	Second, the value of the caribou is established 
in a group that lacks coordination. It would be 
ridiculous to expect that environmentalists could 
outbid a large oil company for access to the ANWR. 
There is too little  coordination  among  
environmentalists. For the most part, they do not 
even know each other.
	It is exactly these kinds of short- comings 
that justify government involvement in the economy.
	In this instance the government's responsibility 
is clear. It must, in the interests of all concerned, 
determine whether the present and future enjoyment 
of the Alaskan Coastal Plain -- caribou and all - 
is greater or less than the value of the oil we expect 
to find there. If less,  the exploration and drilling 
should be allowed. I doubt that an impartial study 
would lead to that conclusion.  Being a good economist 
can also mean being a good environmentalist. Bill 
Richardson seems to under- stand this. I hope my 
former students do too.