Private Pigou Goes to War: The Environmental Costs of Warmaking

Following Arthur Pigou, economists have long recognized the environmental costs of private economic activity. The environmental costs of state warmaking, however, are neglected by economists, who discuss national defense as a public good. The standard public good framing includes two tacit presuppositions about state actors. One is that they have the necessary economic knowledge to move society closer to the optimal provision of the good, such that social welfare is increased. Another is that they have the incentive to act on that knowledge. This paper critically considers both assumptions in the context of the neglected environmental costs of state warmaking. We argue that policymakers are typically not in a position to know the full environmental costs of their military activities and that they lack the incentive to take the full environmental costs of their policies into account, as they are largely incurred by others in the present and future.

Find the full paper here.