Protecting the Natural Environment

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Do the basic institutions of a participatory economy – democratic worker and consumer councils and federations, remuneration according to effort and need, jobs balanced for empowerment and desirability, and participatory planning – create an institutional setting and incentives that promote judicious relations with our natural environment? As long as producers and consumers are not forced…

Great article. How do I join a CAP (community of affected parties) and who decides if I am affected by the pollutant?

good point: How do we prevent everbody wanting Hamburgers all day long…
I bet that some poeple might say: Id like cheeseburgers, meaning it might level out at scale.
But still the whole society can aggree to flying for hollidays is wanted…

Members of a CAP receive a “credit” for damages which creates a perverse incentive. On the one hand, it creates an incentive for people to be actively concerned about the effects pollutants have on them, but on the other, there is a conflict of interest because they stand to personally gain by doing so.

There may be an alternative approach to CAPs.

IFBs already ascribe a cost for emitting pollutants that is included in the indicative price of a good. Under most circumstances, dealing with the harms caused by a pollutant are more costly than preventing them in the first place. A good example is the production of organic food. The production process avoids the introduction of any chemicals used to controls pests or for fertilization. In all respects the approach is better for the environment. We pay a premium for these products to account for this production process. However, the prices of non-organic produce do not incorporate the cost of polluting into their indicative prices. But there are costs involved which include for example restoring depleted arable land or health care costs associated with ingesting chemicals. If these costs were incorporated into the indicative prices of produce, then it is likely that when we shop at the supermarket, the organic food would cost less than non-organic food.

I contend that people should not be compensated for pollution but instead the ‘pollution costs’ raised through sales of these polluting products would be used to restore the environment and cover health care costs. With an interest to increase the greatest Social Benefit possible when producing a product, worker councils would likely endeavour to change their production methods so as to prevent pollution, the lest costly option. There is after all an incentive to do so, because if Worker Council A indicative prices are higher than Worker Council Bs, then several things would happen:

If WCB seeks to expand its operations WCA will gradually decrease its output because access to the means of production will be awarded to the WCB because it provides the greatest social benefit to society, as reflected in its indicative prices.

Consumers would obviously purchase the less expense goods and when only the expensive goods remain, they would certainly put pressure on WCs to adopt the production processes that prevent rather than emit pollutants.

In the long run, this approach would actually address the problem of emitting pollution in a way that would eliminate it completely.


But who requests the restoration of the environment etc. in the annual planning, in your example, and to what extent? We want to decentralise decision making as much as possible and avoid centralised decisions. The point of CAPs and CAP members’ compensation for harm is to allow individuals, instead of a central instance, to express their preferences and, in so doing, affect production decisions. When deciding how much harmful emissions to accept at a certain price/compensation, a CAP member (and the CAP collectively) needs to weigh the compensation against the negative effect it will have in terms of higher prices of goods etc.

I would keep that function of the CAP, in fact I didn’t elaborate on this aspect, but I reflected on the need for some sort of “governance structure” that would serve as a forum to raise these issues. Members can express their preferences and so on.

In our current society, I would see environmental organizations best poised to assume that administrative function.

I wouldn’t compensate anyone however. It creates a conflict of interest. But there should be discussion about the impact raising prices would have on consumers as a whole. Whatever decisions that are taken should be communicated back to society, or at perhaps only those affected by those decisions (i.e. people specifically requesting to consume those goods), then have some sort of deliberation and then vote on some options.

Hi Claude

Interesting points.

In edition to CAPs there are Consumers’ Councils that can make decisions in extension to CAPs that need no central body.

Regarding CAPs I don’t see the perverse incentive. Maybe if you could elaborate more? CAPs are a way to get the supply and demand of pollution and for prices to reflect the true social and Opportunity costs. As you mentioned these prices will effect what a workplace produces; their output will be socially responsible (less polluting). CAPs are used to generate prices with members responding to indicative prices. How exactly can prices be generated to reflect the true social and Opportunity costs in another way?

As far as being paid damages for externalised pollutants, this is in line with the PE income maxim: effort, sacrifice and need. Just like a person who say, works down the mine will get paid more according to their sacrifice (more dangerous work) people who are part of a CAP are sacrificing by being effected by harmful pollutants. How does this create a conflict of interest and with whom?

Hi Chris

This is a good discussion because if we were setting up a Parecon, we’d need to sort these things out. In the spirit of doing so, here goes…

CAPs in and or themselves are needed so that we have a forum to do the work that environmental organizations do today, which is to bring awareness to society about the consequences of environmental damage and to take some sort of action to address these. They would point out pollution issues using scientific data and other sources of information to make their case. It would also be their role to quantify the costs to society if no action is taken. That cost, such as the harms plastic bags are having on our environment, is then added to the cost of producing a good, so that the indicative price reflects the true cost of producing that plastic bag. If it can’t be recycled and must be buried, thus harming our groundwater, then we are stuck having to process that ground water at a greater cost than if the water was pure and clean in the first place. I can’t see any other way at the moment of generating the true social cost of a product. I’m open for suggestions.

As for the damages paid to individuals for being exposed to pollutants here is my thinking on this. When it comes to working and having an income, society bases remuneration on effort and sacrifice, and if for some reason you can’t work, it is based on need. But being paid in the context of enduring harm vs working I see as two different things. If you work harder, doing dangerous work and for longer hours, a person’s pay should reflect those greater sacrifices. But we’re also making a sacrifice when we are exposed to pollution we don’t want. However, the problem I see with being compensated for having to be exposed to heavy metals, either by breathing them or consuming them, could lead to undesirable behaviours such as seeing this as an easy way to earn a greater income without having to work for it. Look at the behaviours today of people suing for outrageous sums of money. It’s created a cultural pattern of being a victim and demanding compensation for it. It’s easy money. I wouldn’t want to see this “victimhood mentality” continue under a Parecon. It’s like a cancer that could spread throughout society and become difficult to eliminate. If we focus our attention on solving the pollution problem, we’d all be better off down the road.


I also think that the most important reason for having CAPs is that they maximise self-management, by giving those that are affected by the pollution the say over the level of pollution they are willing to accept. Personally, if it was me, I would want the right to influence the decision, not some other body making the decision for me.

Does this create a socially undesirable incentive for people to damage their health which generates a higher than optimally efficient level of pollution because the compensation is so luring? It’s an interesting question and I guess we will have to see in practise, but I think the context in which this is happening would be very different than today, where there are people in society that are so poor that this could be their only recourse for gaining a decent income. We are also not talking about a situation like today where you can receive millions of dollars in compensation from lawsuits. The question would be, in a society where there is an egalitarian distribution of income from effort for work and for need, would you be willing to receive a bit of extra income as compensation for the health effects and reduction in well-being you would suffer from accepting more pollution in your community or not? This would also take place in the context of longer-term environmental plans with socially agreed targets.

Robin Hahnel has a new book Democratic Economic Planning, coming out later this year, in which he fleshes out the role of CAPS in more detail including a pollution demand revealing mechanism. There is also a chapter on Longer-term Participatory Environmental Planning.

Good points Jason. I agree with you that I would want to have a say in the matter when it comes to pollution and how much I’m willing to tolerate. I’m sure a lot of people feel the same. As for compensation for tolerating pollution, it might depend on just how much people are being compensated. Perhaps they might be willing to tolerate a lot of pollution if the compensation is high and allows consumers to purchase considerably more goods. I would personally like to see the compensation going to clean up the environment rather compensating people. I believe in time, people would have to be educated on this to raise their awareness. Documentaries like Seaspiracy (on Netflix) make a good case to sensitize people to the destruction of our oceans due to commercial fishing. Something like this would certainly help raise awareness. But we need to keep in mind that organizations would submit proposals perhaps to clean up pollution and get paid to do it. Perhaps the compensation could go towards this sort of initiative. After all, what is the point of continuing to pollute if only we are constantly cleaning up after ourselves, there is an opportunity cost to consider here.

Longer term planning would surely resolve this issue if we find ourselves in a situation where we are spinning our wheels. Perhaps societies as a whole would come to the decision that pollution needs to be dealt once and for all so that we can use our productive Human Resources more effectively.