The Birth and Politics of Green Economic Reason

From pollution taxes to cap-and-trade systems to cost-benefit analysis to the social cost of carbon to stranded assets to ecosystem services: Since the 1980s, ideas rooted in neoclassical economics have gained traction in environmental and climate governance. This paper takes a meta view on the diverse literature on this ascend of ‘green economic reason’ and asks: Does it make sense to understand this set of ideas as one coherent ideational project? And, if yes, what are its overarching political effects? To answer these questions, this paper focuses on the historical emergence of green economic reason and harnesses primary data from its institutional birth pace—the think tank Resources for the Future— as well as interviews and writings from its intellectual pioneers such as Allen V. Kneese and Harold J. Barnett. In contrast to the existing literature, I find that green economic ideas are not the appendix of neoliberalism, neoclassical rationalism, environmentalism, or economic and political interests. Instead, I argue that green economic reason must be understood as an independent ideational and political project that works to make nature and environmental quality legible and significant to economists and markets. As an effort at translation between environmentalism and economics, it is a politically double-edged sword. On the one hand, it shifts the vision of economists, forcing them to accept markets as the causes of pollution that justify state interventions. On the other hand, when put against modern environmentalism, green economic reason has an ‘anti-crisis effect.’ It mistranslates some of the most threatening aspects of ecological change and is based on the premise that environmental problems can be solved by extending the existing market order. Thus, overall, the political effect of green economic reason depends on its institutional context: it tends to be more progressive where neoliberalism is hegemonic, and it tends to be more conservative when used in policy domains where environmentalist values are pervasive.