Volume 43, Issue 1 pp. 105-119
Featured Article
Full Access

What Can Environmental Economists Learn from the COVID-19 Experience?

David J. Pannell

Corresponding Author

David J. Pannell

Correspondence may be sent to: [email protected]Search for more papers by this author
Wiktor L. Adamowicz
First published: 29 August 2020

David J. Pannell is a professor at the School of Agriculture and Environment at the University of Western Australia, Perth, Australia.

Wiktor L. Adamowicz is a professor at the Department of Resource Economics and Environmental Sociology at the University of Alberta, Edmonton, Canada.

Editor in Charge: Craig Gundersen

Abstract

The responses of policy makers, individuals, and businesses to COVID-19 contrast with typical responses to environmental issues. In most countries, governments have been willing to act decisively to implement costly restrictions on work and personal life, to a degree that has never been observed for an environmental issue. A number of possible lessons for environmental economists are identified. In addition to valuing natural environments, people also place a high value on social interactions. These two values may interact. Adaptation can substantially reduce the cost of restrictive policies and should be considered when policy proposals are being evaluated. Preparation for an emergency can substantially reduce its costs by allowing a more rapid response. The development of new technologies can play a key role in reducing externalities. As well, the effectiveness of policies that deliver public goods can be enhanced by credible leaders who provide clear, compelling, and consistent information, emphasizing both the private and public benefits of compliance.

Introduction

The COVID-19 pandemic in 2020, and policy responses to the pandemic, have had dramatic effects on society, the economy, and, in some cases, the environment. In attempting to protect human lives, governments have restricted human activities to an extent and for a duration previously unknown other than during a major war. Governments in different countries have varied in the strength and timing of their responses, and communities have varied in their willingness to tolerate and comply with restrictions for the public good.

These experiences create opportunities to learn. In this paper, we share some preliminary reflections on possible insights related to environmental economics, environmental management, and environmental policy. The reflections span three broad areas relevant to environmental economics: (1) society, culture, and values; (2) information, science, and technology; and (3) policy and trade-offs. In each area, we discuss a range of issues for which the COVID-19 experience may have lessons for environmental economics and policy.

Society, Culture, and Values

Society and Culture

While societal and government responses to COVID-19 have varied across and within countries, three themes emerged. First, there was significant cooperation from the public in striving to achieve the goals—goals that required cooperation to generate public goods. Social distancing, wearing masks in public, sheltering at home, working remotely, and a host of other policies that were implemented using “command and control” and suasive approaches helped reduce the negative externalities associated with spread of the virus. Fairly quickly, social norms emerged to reinforce the policy prescriptions—at least among the majority.

The efficacy of these policies, however, seemed to depend on the level of trust held by the population in governments and social institutions. Whether societal cooperation will persist through future waves of the virus is uncertain, but the lesson is that with sufficient information about the goal (e.g. “flattening the curve”) and trust in the system, major advances towards public good outcomes can be achieved. Leadership played important roles here, and the different approaches of different leaders seems to have made a substantial difference to outcomes.

Another feature that probably contributed to the broad acceptance of restrictive and costly policies in many countries is that everyone faced a risk of serious loss from the virus (personal, family members, etc.). That is not always the case for environmental issues, for which effects may be localized or simply not of interest to some. Perhaps the closest parallel is with climate change, which is likely to affect almost everyone to some degree. But even there, beliefs about the seriousness of the threat of climate change vary widely.

A second lesson arising from the rapid changes that have occurred in response to COVID-19 is that adaptation can happen, and it can happen quickly. Individuals and firms responded and adapted to the best of their abilities. Old habits were broken, new habits established. While significant hardships were experienced, some new, and potentially better, ways of doing things emerged. Working from home created challenges, but in some cases, businesses discovered increased productivity in those working from home, perhaps due to less time lost through commuting and workers benefiting from greater flexibility. In addition, some businesses recognized that they could save money on office rental by allowing staff to continue working at home, leading to decisions to allow staff who wish to continue working at home to do so indefinitely. In addition, there have been public benefits from the shutdowns, such as reductions in pollution (Chen et al. 2020) and traffic congestion (Geotab Data and Analytics Team 2020). On the other hand, low-income groups have been the most negatively affected by shutdowns as working from home is less likely to be a feasible option for them. Shutdowns have also disproportionately affected those responsible for childcare/eldercare, and women through the disproportionate loss of service jobs (Adams-Prassl et al. 2020).

Nevertheless, the costs of responding to COVID-19 would have been much more significant without the tremendous adaptation and learning-by-doing that occurred. For example, the productivity of workers who worked from home was found to be high in many cases (Guyot and Sawhill 2020). The measurement of costs of environmental policies often ignore the adaptation that will occur in response to the policy, perhaps because anticipating and quantifying the effects of adaptation is so difficult. However, the experience during COVID-19 lockdowns suggests that this difficulty is worth trying to address.

A third lesson is that people greatly value social interactions, as well as valuing being in nature, and these two values are complementary. While these are not new insights, peoples' responses to the lockdowns and social distancing requirements highlighted their importance, particularly the value of social interactions. Environmental economists have been valuing access to nature for decades, but the value of person-to-person contact has not been a focus. Indeed, environmental economics in general has tended to treat people as individuals, making their own choices independent of others, largely ignoring social networks, peer effects, and related interconnections. There are some examples of research studies that provide a foundation for such work (Timmins and Murdock 2007; Neilson and Wichmann 2014) but there is room for more conceptual and empirical work in this area, including research on the possibility of interactions (complementarity or substitutability) between the values of human interactions and access to nature.

Fourthly, the experience with lockdowns in response to COVID-19 re-emphasizes the importance of potential distributional effects from policy interventions. Several groups in society have been disproportionately affected by lockdowns, particularly poorer people who could not easily work from home or adapt to other policy directives. The distributional effects were recognized and sometimes acted on by governments, and this may have broadened acceptance of the policy. Similar distributional effects can potentially arise in the case of environmental policies (e.g. Fenichel et al. 2019), potentially resulting in a similar need for strategies to address issues of justice and to increase policy compliance.

Valuation of Effects

Some of the most significant policy decisions made in the past century have been made during the COVID-19 pandemic, and they were made in days or weeks, with little or no formal analysis of benefits and costs or regulatory effect, other than results from epidemiological models that illustrated the potential effect of a no-action scenario. The decisions seem to have been made largely based on health risks (deaths and infections), and health-care-system capacity. In some cases, this was stated explicitly: “The goals of Canada's COVID-19 pandemic response and recovery are first to minimize all serious illness and death … and secondly minimize societal disruption, including reducing the burden on health care resources” (https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection/health-professionals/public-health-measures-mitigate-covid-19.html).

Soon after the initiation of lockdowns and other public-health restrictions, questions emerged about the trade-offs between health outcomes and the economy, particularly jobs. Was the protection of human health too costly to justify the economic sacrifices being made? This created a focused debate on “lives” versus “income.” Economists were ready to inform this debate. Articles in newspapers (e.g. in The Washington Post, The New York Times, and The Guardian), magazines (e.g. WIRED, Forbes), and podcasts discussed the concept of the “value of statistical life” (VSL) and presented analyses like those by Thunström et al. (2020) and Greenstone and Nigam (2020). Economists were interviewed on the VSL concept, including its logic and relevance. While there are always some concerns about the concept and its measurement, there was wide acceptance of it in these public discussions and it played significant roles in the public debate. Although it has been argued that VSL is poorly named (Cameron 2010), it provided “off the shelf” values ready for use in policy analysis. There was general agreement arising from these analyses that the net benefits of taking rapid and significant actions were large enough to justify the costs. This was probably the most significant use of “nonmarket” values (VSL) in public debate.

The valuation of benefits and costs of various actions also highlighted the role of strong interdisciplinary research. Models examining the tradeoffs were usually integrated economic—epidemiology models (e.g. Perrings et al. 2014; Fischer 2020), calibrated to specific cases and countries, and informed by empirical estimates, including the VSL.

Of course, the analyses of the COVID-19 tradeoffs between lives and the economy were simplified. From an environmental economics perspective, while the discussion focused on the value of reducing mortality, it did not include measures of the value of social contact, nor of the ability to visit parks and natural places during stressful times. Also, the long-term cost of job losses—a decades-long debate in environmental economics—was not factored in quantitatively. Economists were ready to tackle the main trade-off decisions with a robust measure of the value of mortality risk reduction but estimates of other nonmarket elements were not available, or not robust enough, for use in policy. Questions for environmental economists include the following. Is there merit in focusing on estimating a few key nonmarket values so that they are robust enough to employ in policy analysis? Would current concepts and methods (e.g. property values, recreation values) be considered sufficiently valid and robust by policy makers? What strategies can be used to enhance their use in policy? (See Rogers et al. (2015) for discussion of the latter question.)

Another lesson learned from the COVID-19 situation is that clarity of the key trade-offs can focus the decision-making task, resulting in clear decisions with an underlying rationale that can be communicated to the public. The policy decisions for COVID-19 were appropriately framed as trade-offs: short-term economic costs versus public-health benefits and medium-term economic benefits. This framing focused the decision. The trade-offs inherent in environmental policy options are not always framed so clearly, and the importance of environmental quality for economic benefits is not always clear.

A further lesson is that the community's priority given to the environment is likely to vary over time in different circumstances. Prior to the pandemic, the environment was high on the list of priorities in many countries, but it quickly dropped down the list when public health, and then recovery of the economy, emerged as the key priorities (Ipsos 2020). Values change and environmental issues will rise and fall in priority depending on health, unemployment, education, and other public concerns.

Information, Science, and Technology

Uncertainty

When COVID-19 emerged, there was great uncertainty about its epidemiology, including its mechanisms of spread, its rate of spread, its methods of transmission, its symptoms, and its severity. Decisions about strategies to contain it had to be made in the absence of strong information about these factors.

There is a close parallel here with the situation when a new species that is potentially an invasive environmental pest is detected in a region for the first time. Even if the species has been well studied in its place of origin, its effect on the new environment can be very difficult to predict. Many nonnative species have little or no effect in the new environment (e.g. garden plants that never escape into the natural environment), while in other cases, the effect is very severe (e.g. cane toads in Australia (Shine 2010) or Australian possums in New Zealand (Kennaway 2010)).

How best to respond to such extreme uncertainty remains unclear in both contexts. Uncertainty may partly explain the very different responses to COVID-19 among different countries, including strategies that aimed for eradication (e.g., Taiwan, New Zealand), slowing spread (e.g., Germany), or intentionally allowing spread (e.g., Sweden) and strategies that seemed to lack a clear direction (e.g., the US, the UK). Policies for management of invasive species are similarly variable between countries.

Two other responses to uncertainty can be observed for COVID-19. One is the development and use of multiple epidemiological models, feeding results into discussion processes curated by bodies such as the World Health Organization and the U.S. Centers for Disease Control and Prevention. The range of results from multiple models that have been developed somewhat independently provides an indication of the scientific uncertainty (Carlson et al. 2018). In past disease outbreaks, ensemble predictions have tended to use averaging of model results (e.g. Viboud et al. 2018), but more sophisticated approaches involving feedback between modeling groups and multiple rounds of modeling are being trialed for COVID-19 (Shea et al. 2020). Such approaches have the potential to reduce uncertainty by sharing information between modeling groups. Ensemble modeling processes have been used in the context of climate change (e.g. Krishnamurti et al. 1999), but seem to be rare for other environmental management issues.

Another response to uncertainty is adaptive management. This has been evident in the case of COVID-19, particularly during the phase of relaxing restrictions. Some governments have explicitly stated their intention to adjust their strategy over time in response to information about how their existing strategy is performing. The effectiveness of this approach for COVID-19 is not yet clear, but in general it seems wise to be flexible and responsive in this way. Adaptive management has long been advocated by environmental scientists (e.g. Walters 1986; Walsh et al. 2012), but its adoption as an explicit systematic strategy (as opposed to ad hoc adjustments) is relatively rare. In many environmental programs, learning about program performance occurs in an unsystematic way and the connection back to management is weak. Typically, changes to program targets and approaches mainly occur when a new phase of funding commences, rather than in response to evidence that the existing strategy can be improved.

Scientific Input to Policy Decisions

In many countries, medical and public-health scientists have played prominent roles during the COVID-19 outbreak. They have informed and advised governments and in many cases their advice has been heeded. They have persuaded many governments to make decisions with costs that dwarf the costs of environmental programs and policies. They have stood by national leaders and provided information and advice to communities. In some countries, high-profile medical leaders in these roles have attained high levels of public recognition and trust. These public health scientists were playing roles similar to those of central bankers in that they were apolitical, knowledgeable, and provided important advice to governments. By contrast, environmental scientists are generally much less visible and, seemingly, much less influential. It may be worth exploring the creation of chief environmental scientists to play similar roles as prominent public-health scientists have done.

One obvious explanation for this difference is that people are concerned about threats to human life and health and relatively less concerned about environmental effects. To some degree, political leaders are responding appropriately to community priorities. They are listening to medical scientists because the community demands it. Even where environmental issues are known or predicted to have effects on human mortality or morbidity, in many cases those effects are diffuse and slow, making them less salient and therefore less actively concerning.

A second factor is that the effects of a pandemic are rapid and obvious, so that it is relatively easy for the community to observe the consequences of inadequate policy responses and to hold leaders responsible. Most environmental issues have effects that occur over long time frames. Some of those effects are difficult to observe. As a result, politicians can choose to ignore scientists with less risk of being held to account in an election or in the court of public opinion.

A third possible reason why a cynical politician may choose to engage actively with medical scientists in a pandemic is to create the opportunity to externalize the blame if things go badly. This is less of an imperative for environmental issues because of the previous two factors.

Technology Development

An important response to COVID-19 by medical scientists has been to fast-track efforts to develop technological solutions, including a preventative vaccine (Cohen 2020), treatments for sufferers (Kalil 2020), and better tests to identify current or past cases (Beeching, Fletcher, and Beadsworth 2020). It is expected that these efforts will eventually be successful, and that they will make critical contributions to reducing the suffering, death, and economic costs wrought by the disease and the restrictions imposed to combat it.

We observe that development of technologies is often not emphasized by environmental economists as a primary policy response. In the case of climate change, the important role of technology development is recognized (e.g. Pacala and Socolow 2004), but even then environmental economists tend to think of it in terms of “dynamic efficiency,” meaning that economic incentives created by a carbon tax or a cap-and-trade scheme would drive businesses to invest in innovation (Popp 2019). This is much less direct and timely than the up-front, urgent responses by the developers of new medical technologies for COVID-19, partly funded by governments.

For some other environmental issues, perhaps including water pollution, air pollution, biodiversity conservation and land conservation, environmental economists rarely give much attention to the role of policy in fostering or investing in technology development. Instead the focus of our policy advice tends to be on optimizing the use of existing technologies through incentive-based or regulatory instruments.

The example of COVID-19 suggests that a greater emphasis on investment in technology development as a primary response to environmental problems may be worth considering—an argument also made by Popp (2019). Given the lack of private incentives for investment in the required research and development (R&D) for many types of environmental problems (in contrast to the situation for medical technologies), governments would need to invest public resources or create private incentives to do so, or both. A range of policy mechanisms could potentially be used for this, including tax incentives (Hall and Van Reenen 2000), or competitions.

Although not emphasized as a policy response by environmental economists, direct investment by governments in technology development to address environmental problems does occur. Examples include development of biological control agents to control invasive plants and animals that affect the environment (Messing and Wright 2006), development of technologies for reducing water pollution (Ghadouani and Coggins 2011), and development of technologies and systems for soil conservation (Ekboir 2003).

As well as working directly to reduce an environmental problem, a technology-development response sometimes allows an economic or regulatory instrument to work more successfully. For example, if the private net costs of an existing land-management technology (e.g. cover crops to reduce the loss of soil and nutrients from agricultural fields) are greater than its public benefits, the socially optimal response in the absence of technological development is to do nothing and tolerate the environmental effects. But R&D that generated a new type of cover crop that was less costly for farmers to adopt could result in private net costs being less than public benefits, making an economic or regulatory instrument worthwhile (Pannell 2009).

The Environment's Response to Human Pressures

News reports during lockdowns in various countries highlighted positive environmental outcomes resulting from a reduction in human activity. Examples included major reductions in air pollution in Indian cities, improvements in water quality in Venice, and lower emissions of greenhouse gases generally. We note that achieving these environmental benefits would not necessarily require costly shutdowns. For example, technological changes might deliver similar benefits. Our point is that the ability of the environment to rebound in these and other ways was encouraging. The presence of numerous natural experiments due to lockdowns around the world creates an opportunity for learning about human-environment systems, particularly the response of the environment to reduced pressures.

On the other hand, the dramatically increased use of surgical masks, gloves and hand sanitizer has led to problems with poor disposal of medical waste in some cases (Saadat, Rawtani, and Hussain 2020), exacerbating existing problems of poor waste management in the environment (Forrest et al. 2019). This reinforces that care is needed to anticipate all the consequences of a policy, in case there is a need for policy designs or complementary policies to avert negative consequences (Laurenti et al. 2016).

Policy and Trade-Offs

Communication That Rallied Community Support

In some countries, effective communication has been a powerful tool to garner support for costly policies and to increase public compliance with them. Some national leaders were able to communicate in ways that generated strong public support for their COVID-19 policies. In most countries, highly credible scientific leaders accompanied government leaders and spoke at media conferences in many cases. Trade-offs were presented and the public was informed of the need for action. There was reasonable consensus on the science and consistency in the messages presented. In these countries, it became a social norm to voluntarily engage in actions to support the cause. There have been exceptions to this pattern, particularly in countries where the issue became politicized from an early stage.

There are clear lessons here for environmental policy: that communication from leaders can be a key factor influencing policy effectiveness; that there are benefits in using communicators with broad credibility and respect; and that communicators should provide clear, compelling, and consistent information and take an inclusive approach that emphasizes both the public and private benefits of complying. On the other hand, even the best communication may not be able to change the minds of people if they perceive that the benefits of the policy are low, if their perception of social norms does not align with the policy, or if they hold strong ideological or political views that conflict with the policy.

Policy Mechanism Choice

A range of policy mechanisms have been used, with reasonable consistency between developed countries in which mechanisms are relied on. Behavior change has mainly been achieved by command and control approaches, by information provision and by suasion. People have received payments serving several purposes: reducing personal hardship, maintaining demand in the economy, and, in some cases, reducing incentives for people to violate requirements to stay at home. A long-term solution to the problems caused by the pandemic is reliant on technology development, which is partly market-oriented and partly resourced by public funds.

A possible lesson for environmental economics is that a diversity of mechanisms can be needed to address a major social issue. The usual focus on market-based mechanisms may not be sufficient for complex, multifaceted problems.

The Economics of Spread

There has been an explosion of research on economic aspects of COVID-19; by July 30, 2020 there had been forty issues of Covid Economics, an online publication collecting economics working papers on the topic, which published its first issue on April 3, 2020. A number of these papers have explicitly analyzed the economics of reducing the spread of COVID-19 by social-distancing policies (e.g. Fischer 2020; Greenstone and Nigam 2020; Thunström et al. 2020). In each case, they found that the benefits of a package of measures are likely to exceed the costs.

COVID-19 policy is an example of a type of economic decision problem that economists have often analyzed: whether, when, and how to address market failure by containing a spreading pest or disease. Many lessons from that large literature are likely to be transferrable to COVID-19, to some degree.

Specific conclusions about the economics of pest management are sensitive to the characteristics of the spreading pest and the context within which it is spreading. They depend, for example, “on the characteristics of the exotic pest, its costs, how it spreads, how easy it is to detect and eradicate, and the extent of the infestation” (Acquaye et al. 2007). Quantitative studies have most commonly found that coordinated control of pests is economically superior to relying on uncoordinated private decisions, including analysis of the management of animal disease (Rich, Winter-Nelson, and Brozovik 2005), plant disease (Singerman, Lence, and Useche 2017), insects (Florec et al. 2013), and weeds (Pannell 1984).

A key factor influencing the optimal strategy for managing a spreading pest is the current extent of the pest. The earlier that control actions commence, the lower the cost of eradication and the more likely it is for eradication to incur costs that are less than the benefits. This is recognized in economic epidemiology (Perrings et al. 2014) and reflected in the results of different responses to COVID-19 in different countries. “Early and intensive control near the invasion site is better than later control elsewhere” (Wilen 2007). The challenge with COVID-19, however, was high uncertainty about the cost of inaction, and this influenced some national leaders to delay taking strong action. In retrospect, adopting a wait-and-see attitude to COVID-19 was not the best approach, but this was not clear at the time.

Another observation is that the optimal type of response depends on the current extent of a disease or pest. “The optimal strategy changes from eradication to slowing the spread and finally to doing nothing as the area occupied by the species increases” (Sharov 2004). This resonates with what we have observed in different countries during the COVID-19 pandemic. For example, Taiwan took action to address COVID-19 early enough that eradication was possible without a broad economic shutdown. In Australia and New Zealand, the disease was spreading in the community, but shutdowns were implemented early enough for infections to fall rapidly down to zero (New Zealand) or very low numbers (Australia) (acknowledging that numbers may rise in future). In many countries, eradication will not be achieved but actions such as shutdowns have been adopted with the aim of slowing the rate of infections, to allow medical services to cope with the rate of new patients requiring treatment. In some countries, the number of infections is so high that there is a debate under way about whether continuing a shutdown is worthwhile.

A Compelling Problem Demanding an Immediate Response

The policy response to COVID-19 was remarkably rapid in most countries. In a matter of a few days to a few weeks, some of the most significant policy actions ever undertaken were implemented by governments around the world. Lockdowns, wage subsidies, child care programs, small business subsidy programs, and various other policy measures were developed and implemented (https://covidtracker.bsg.ox.ac.uk/) more quickly than most considered possible. These decisions were made with great uncertainty about the outcomes, without much debate in committees and without detailed economic analysis.

In the case of COVID-19, the result of strong policy responses, even though they generated some of largest declines in economic activities in a century, was improved approval ratings for most political leaders. Rapid action saved lives and was a political winner. Given uncertainty about how long this political approval will last, it would not be surprising to see elections called quickly in some jurisdictions (in cases where governments can determine the election date).

We can identify reasons why policy action occurred so much more rapidly and extensively than we have ever seen for an environmental issue. First and foremost, human lives were at stake, making it a top priority for the public. A significant amount of information about risks was known, but COVID-19 had the classic characteristics of dread, unknown risks, lack of control, and related characteristics that amplify perceptions of risk. Governments may have felt pressure to keep up with other governments that had already taken action (peer pressure or mimicry). Scientists were providing clear advice about the magnitude of the risks and the narrow window of time available to reduce those risks, creating an understanding that the downside of inaction was catastrophic, both in terms of health and politics. Environmental issues sometimes have one or a few of these characteristics, but never more than that.

Differences in visibility and time frames between COVID-19 and environmental issues were likely important. Governments knew that if they failed to respond adequately and this led to many deaths, their failure would be readily apparent to electors within weeks or months. By contrast, a failure to sufficiently address some environmental issues may not be apparent to the public (e.g. the issue is remote from population centers—native forests—or it is difficult to observe—ocean nano-plastics). Furthermore, issues like groundwater pollution, habitat loss, and wildlife population decline develop over decades or longer, so a lack of effective policy action now may not become a public concern until after current politicians and government officials have left office.

Clarity of Objectives

A feature of COVID-19 policies has been that their broad objectives have been clear. In most countries, social distancing and lockdowns have been focused on “flattening the curve” as a health outcome. Economic consequences of these policies have been addressed with other policies that aim to keep people in work, keep business afloat, and prevent evictions of renters and mortgage foreclosures. When a new problem arose, a new policy was proposed to address it. Closures of schools had direct health benefits but may have imposed costs on families (through having to find teaching and childcare) and potential long-term effects on children from families that were unable to provide good-quality substitute teaching. The closures may also have had indirect health costs as health-care workers could not access childcare. A policy response to the latter was to support and subsidize childcare for select groups (Bayham and Fenichel 2020).

Improved clarity about the desired outcomes would improve some environmental policies. For example, the objectives for policies for land use, biodiversity conservation, and threatened species protection can be unclear or even muddled. Biodiversity conservation policies are often intended to deliver agricultural outcomes, poverty alleviation, and regional development goals. Economists have long argued that multiple market failures should be separated and addressed with different policies (Tinbergen 1956). A recent example that illustrates the cost of muddling objectives in policy design is provided by Fenichel et al. (2019). They show that separately targeting an environmental market failure (water services provision) and a financial market failure (credit market failures) outperforms attempts to use a single, perhaps modified, instrument to try to address both concerns.

Difficult Trade-Offs

Governments facing the COVID-19 pandemic have had to confront stark trade-offs between human health and economic output. While the best response to the trade-off was considered obvious in most countries (the benefit of saving lives was judged to clearly outweigh the short-term economic costs of shut-downs), judgments are likely to be much more difficult at the other end of the outbreak. The question of when to reduce restrictions on movement and economic activity is clouded by uncertainty over the probability of a “second wave” of infections if policies are relaxed too much or too rapidly. At this stage, it remains unclear what the trade-off is between relaxing restrictions and increasing incidence of the disease. Nevertheless, governments in many countries, or subregions within them, have started to open up. It remains to be seen whether this is an area where a wait-and-see approach could generate large health benefits or miss out on larger economic benefits.

Trade-offs are also present in most environmental policies, between environmental outcomes and costs of various types. In many cases, the best balance to strike is not clear. In the absence of clarity, governments may be inclined to accept the policy status quo, whatever that is, to avoid the transaction costs and transition costs of change.

The Importance of Preparation for an Emergency

The importance of being prepared to respond to a disease outbreak is highlighted by Olmstead and Rhode (2015). They describe the remarkable history of animal disease management and eradication in the United States. Particularly in the first half of the 20th century, leaders who mostly had strong scientific backgrounds in diseases put in place bold and costly programs that succeeded in eliminating numerous serious animal diseases, some of which affected humans as well. There were many aspects to this success story, but an important one was preparedness. Olmstead and Rhode (2015) observed that early detection of new outbreaks was a key to success, and that laws and procedures needed to be in place before a crisis hit. Without that, it was difficult for governments to respond rapidly enough.

Given that observation, it is remarkable how rapidly and decisively many national governments did respond to COVID-19, but even within the group of countries that responded rapidly, it is clear that those countries that responded most rapidly and were most prepared were most successful in limiting the effect of the disease. Epidemiological modeling showed that even relatively brief delays in taking strong action (to which lack of preparedness may have contributed) had big effects on the number of deaths. Pei, Kandula, and Shaman (2020) estimated that if social distancing had started one week earlier in the United States (March 8 instead of March 15), the number of deaths by May 3 would have fallen from 65,000 to 29,000.

For some environmental or natural-resource issues, we do see cases of governments being somewhat-prepared to well-prepared for an emergency. Examples include chemical spills and wildfires—both issues for which human health and safety are at risk. For environmental issues that lack a direct and immediate effect on humans (e.g. threats to biodiversity, water pollution), the level of preparedness for an emergency is often much less, with predictable results.

Conclusion

COVID-19 as a policy issue shares a number of features with the environmental issues that are commonly addressed by environmental economists. In both cases, costs of various types are created by policy responses, and policy makers have needed to make judgments about whether those costs are too large to be worth bearing. Public compliance with policies is needed to generate both public goods and private benefits. Communication and leadership matter in fostering that compliance. Scientific advice and evidence are critically important in making decisions about the design of effective policies. Technology development can be a key element in the policy response. Decisions must be made in the face of uncertainty about the severity of the issue being addressed and about the performance of alternative management responses. Difficult trade-offs are needed between the disease or environmental issue, on the one hand, and economic or social issues on the other. Further, spread of a disease or pest or environmental problem provides a potential market-failure rationale and justification for coordinated policy response that places restrictions or costs on individuals and businesses to avert other larger costs.

Despite these close parallels, some clear differences in policy decisions and outcomes are apparent. Governments have been willing to adopt stronger, faster, and costlier policy actions for COVID-19 than are typically seen for environmental issues. In most countries, public support for these policies has been stronger and more united than for any environmental issue, resulting in high levels of compliance despite high private costs. Uncertainty has been acknowledged and addressed more explicitly, both through adaptive management and through approaches to disease modeling. Science has played a central and trusted role, with scientific advice being actively sought and acted on by politicians.

In our comments, we attempt to explain these important differences. From these observations, we have attempted to identify lessons that may assist environmental economists and policy makers to develop more effective policies, to communicate them better, or to recognize where required public or political support is unlikely to be forthcoming.

Acknowledgments

The authors would like to thank the editor, an anonymous reviewer, Peter Boxall, Claire Doll, Patrick Lloyd-Smith and Sharon McKinnon for helpful comments on an earlier draft of this paper.

      The full text of this article hosted at iucr.org is unavailable due to technical difficulties.