#MeetTopEnvEcon – Aart de Zeeuw

(Date of interview: July 2020)

I am very happy to have had the honor to interview Aart de Zeeuw for the Meet Top Environmental Economists (#MeetTopEnvEcon) series. It is always a great pleasure to talk to Aart as he has this happy, positive aura around him and I have never seen him without a smile on the face. Aart has been, and still is, a huge influence for environmental economics, and has been one of the main figures behind its development in Europe. His main research areas are (differential) games and tipping points applied to environmental economics, and he has thereby significantly influenced how environmental economists think about environmental problems and their solutions. It is a great pleasure to meet him at conferences, so if you have the opportunity, do not hesitate to talk to him. Before getting to the actual interview, I have the Express Views part, which Aart kindly agreed to. In addition, I am very happy that Cees Withagen agreed to write an introduction to this new interview. Enjoy!

Introduction by Cees Withagen: Ingmar Schumacher has asked me to write a brief introduction for his interview with Aart de Zeeuw. I accepted, but now I realize it is a challenging assignment. The problem is not so much to write an introduction, the problem is to write a brief one. The content of the interview that you are going to read, my personal view on Aart’s statements, and my friendship with Aart for over 40 years beg for a substantial contribution. But let me just say the following. Reading the conversation he had with Ingmar reveals the “true” Aart. As a family man, as a strongly motivated teacher, a devoted researcher, a successful applicant for grants for his students, an excellent manager, and an active policy advisor. I recognize and acknowledge these aspects immediately. Still I was a little surprised that one of Aart’s hobbies didn’t receive any attention proportional to the time and energy he devotes to it. Playing bridge is maybe a metaphor for Aart’s life. It brings together games, differential games, analytical and strategic thinking, being friendly and polite (even to people whom you don’t like so much), teaching how competitors could have done better, explaining to partner (me, for many years) how we could have done better. So, let me compliment Ingmar and wish you pleasant reading.

Meet Top Environmental Economists (#MTEE) – Aart de Zeeuw

Could you please give me a brief background of yourself and your main research interests.

I was born in a small village in the middle of the Netherlands, and I split my time between the school, the chessboard and the forest. I studied mathematics, but halfway my studies I spent a semester at Princeton University in the USA and there I decided to study economics as well. I wanted to move to social science and I was under the influence of both my father’s generation and the political left. The first wanted to prevent disasters like in the thirties of the last century and the second wanted to fight inequality. Economics is the basis of it all. Later I realized that the natural environment was in danger and that we had to integrate economics and ecology.

In my studies of mathematics and economics, I became convinced that dynamics and strategic behaviour are essential for analysis. In my PhD, I developed the tool of differential games that proved to be very useful for my research. My main research interests have been twofold. First, global and trans-border pollution, such as climate change and acid rain. More specifically, the game of international pollution control and international environmental agreements. Second, the economics of tipping points, which are important phenomena in natural systems such as lakes, coral reefs and climate. This requires the analysis of multiple equilibria and non-smooth marginal effects.

You suggested that due to your father’s generation you wanted to find ways to prevent disasters. Could you please elaborate on that?

My father always told me that we have to prevent similar disasters as those in the thirties because if that happens, and people get unhappy, then they start to follow bad leaders and you get into trouble. We need to keep people happy. Economics is a very important part of that. You can see similar opinions when you read interviews with the old generation economists such as Ken Arrow and Bob Solow. They have the same motivation why they do economics: we have to prevent the things in the thirties from happening again by understanding how it happened, and thus prevent them from happening in the future. Although my father studied plant biology, and I started off with mathematics, this was my motivation to turn to social sciences and in particular economics as this is the basis of things.

Would you say an increasing general unhappiness is the reason behind the move towards more protectionism and nationalism?

Yes, I think so. I have not made an analysis of what is happening in some countries but from a distance, I would conclude that some of the success of people like Donald Trump in the USA and some leaders in Europe and Latin America comes from the fact that people are unhappy. People see an increase in inequality, many are unemployed, there is poverty in the US now and there is unemployment, in one of the richest countries in the world. People are searching for ways to get out of this misery. This is basic misery, but it is also misery in comparison to other people who are very rich and can do whatever they like. Then people start to follow a leader who appeals to this. Even though this may not really help them, the leaders get power and it will not be good for the future of the country. I am concerned about these developments and it reminds me of what my parents told me. If my parents were still alive, they would be very concerned as they would recognize a number of similar issues that they experienced when they were young.

What article/book of yours would you call your best?

The first paper on a topic is usually not the best in terms of deep and thorough, but it may be the best in terms of impact. For example, our first papers on the two prevalent tipping point models in economics in 2003 (on lakes with known tipping points) and in 2011 (on fisheries with uncertain tipping points) had impact, but our later work on the lakes and on growth with uncertain climate tipping points was better. My best-cited papers are on international pollution control in 1992 and on the Porter hypothesis in 1999.

Would you mind giving a list of essential articles that a young researcher in your line of research should read?

The book The Control of Resources (1982) by Partha Dasgupta is a classic. For an extension to games, one can consult Differential Games in Economics and Management Science (2000) by Dockner et al. The book Environment and Statecraft (2003) by Scott Barrett is a classic for international environmental agreements. For extension of the models, one can read my review International Environmental Agreements (Annual Review of Resource Economics, 2015). For tipping points, one should read Catastrophic Shifts in Ecosystems (Nature, 2001) by Scheffer et al. For economic analysis, one can read my review Regime shifts in Resource Management (Annual Review of Resource Economics, 2014).

And could you be so kind and give a reference for a policy-oriented article or book that sums the research in your field for an interested policy maker?

The book by Scott Barrett and the paper by Scheffer et al. that I mentioned previously are also accessible to policy makers. The column in VOX CEPR Policy Portal (2014) by Rick van der Ploeg and me about our work on growth and climate tipping got very many downloads.

Which impact would you say does your research have on policy making? And how do you think environmental economists could increase their say in the policy agendas?

I have been a member of the Advisory Council for Research on Nature and Environment for the Dutch government and an advisor to the Netherlands Environmental Assessment Agency. I have also been a member of the task force on social-cost benefit analysis and on discounting for the Dutch Ministry of Finance. In general, I think that my largest impact was by teaching new generations of economists! Writing articles in major newspapers also has a huge impact. In general, you have to be willing to spend time on writing and speaking about your ideas for a broader audience.

How did you become a member on these councils?

In fact, I do not know. They invited me. At some point, you get a call from someone with a question: whether you are willing to become a member of a council. But the point is that they have to know you. They have to think that you will be a valuable member of the task force or council. That means you have to show yourself. You have to make an effort, like writing in a newspaper. No policy maker will read your research papers. You have to make the effort of translating your research into words that policy makers will read and understand and will give them ideas – the sort of ideas that you want to transmit to them. You have to go to meetings, raise your voice.

Some of your students work in the ministry. They may remember their old teacher and invite him. This happened to me actually. Another thing that happened to me is the following. In the Netherlands we have these three research units, one on the economy, one on the environment, and one on social issues. The researchers are government employees: they can do research, but they mainly have to answer questions from the government or the parliament. Once I got a call from the director of the environmental institute and he said that he would like to invite me for the following reason: “I don’t know anything about economics. In the government, I want to argue for environmental protection. The economists have many stories with a lot of jargon that I do not understand. Basically, I feel that they are wrong, but I cannot argue with them because I do not understand their way of thinking. The economists dominate and they do not take my remarks as an environmentalist very seriously. But I want to learn. And I want some people in my institute who are economists. I want to understand what economists say, and I want to understand economics. I think that I can improve my work as an environmentalist in this way. So, do you want to help me?” And I said: “Sure.” So I became his advisor, and we appointed a number of economists in his institute. Everything started with the invitation of the director of this environmental institute who thought that we have to do some integration.

The willingness to spend time is very important. Many people in our profession find that any minute not spent on their research papers is a waste of time. They talk about teaching “load”, and they shy away from administrative duties and policy discussions. I understand, because these are the incentives that we put to the people in our profession. But if you are concerned about your policy impact, then you cannot wait until people in the policy arena start to read your papers because they won’t. You have to make the effort to bridge the gap between the policy makers and you, and to reach out. This takes time, but it is not a waste of time.

How do you then feel is it possible to change those incentives?

I think we could change in the sense of how we evaluate our young scientists. If we evaluate them for tenure, then we only evaluate them according to their research output and grants. We say we look at other things, but we basically don’t. However, it is also important that they are good teachers, because your next generation of economists is exposed to them. And you also have to teach them that it is important to bridge the gap to policy makers, and to show them that it is important.

The reason that we are using research output and grants is because they are easy to quantify. You can leave the evaluation for tenure almost to a secretary. So, again, it requires an effort from the senior faculty to find out if someone does good policy work. You need the senior faculty to be willing to spend some time on the evaluation of the younger faculty. Research should still be the number one issue, as someone who is not able to produce research papers should not have an academic career. But if we, as an academic community, are concerned about our policy impact, then we should put it as a criterion for our new faculty. So, we have to change the evaluation from something purely quantitative to something more broad.

The introduction of this quantitative criterion, meaning the focus on publications only, was to make selection objective. Now the young scientists have something to aim for (the number of publications), and this gives them something objective and the confidence that they are not depending on the subjectivity of the senior faculty. If you take this too far, then you lose out on things that need a subjective evaluation. The senior faculty thus needs to spend more time and have a number of criteria that they use in the evaluation to reach a tenure decision. If the academic community continues to think that it is important that policy impact is successful, then we need to have it as one of the criteria for tenure, otherwise this never works. You need to start to accept some grey area here.

I discussed this issue with many other senior researchers and all are of the same opinion as you. I feel this issue is very similar to journals. We all agree that the journals should be open access and author rights should stay with the researchers, but just like with the hiring problem, in the case of journals we economists also cannot coordinate on the pareto improving equilibrium.

I totally agree. But we should not give up, it is hopefully something that can improve over time. Talking about it and having a consensus is step number one, and then we have to try to implement it in our own environment, and see if this will spread and change the current situation.

What do you feel has been your greatest achievement over your career to date?

I think that my achievement lies in the combination of teaching, research and management. I have been teaching environmental economics for more than 25 years, I have written seminal papers in the areas of international pollution control and the economics of tipping points, and I have contributed to building a number of institutions. These institutions are the Economics Faculty in Tilburg (as dean), the environmental economics group (as professor), the EAERE (as president), and the Beijer Institute (as co-director).

What do you feel were the most important ingredients to make these institutions successful?

For each of these institutions, the story is different. In general, you need vision, enthusiasm and the willingness to spend time and energy. You also need a group of people who share all this and who trust each other. In case of the Economics Faculty in Tilburg, I was member of the task force, but the main driver was Arie Kapteyn. It was amazing to see the change into a research-oriented faculty. By constant signalling what you want to change, the people who share the vision join you and the people who do not share the vision leave. The idea for the Beijer Institute came from Karl-Göran Mäler and Partha Dasgupta. Carl Folke and I moved this forward for some time, but many people contributed. The success of the EAERE was again the result of vision, enthusiasm and perseverance of a core group of people, starting with Henk Folmer.

How have you seen environmental economics change over the decades, and what do like about it and what not?

In Europe, environmental economics started with a focus on theory, but gradually it became more empirical and adopted new developments in economics, such as behavioural economics and experimental methods. Environmental economics started with adding only some pollution and resource variables, but without a real integration with ecology. This is improving, but we need more. Regarding theory and empirics, it always fluctuates back and forth but at the end, we need a balance. The climate issue dominates the field at this point. This is understandable, and we need a balance here as well.

In one of your articles you gave graduate students some advice (de Zeeuw, 2014, EDE): “My first advice to graduate students is always that they should follow their own motivation… The field is very important and challenging, but be aware of comfort zones and realize that innovation usually occurs when you cross the borders, to natural sciences and back to economics again.” Where do you currently see the comfort zones in environmental economics?

Comfort zones arise when people work with the same models and assumptions. They can be happy with reporting small improvements, but it may be better to invest in the corresponding natural science. It is hard work, but the reward is innovation and better science at the end. An example is a recent paper by Dietz and Venmans that is using insights on the impact delay of carbon emissions. In my own experience, the study of critical loads in acid rain, and tipping points in lakes, has improved my research in environmental economics.

You discussed a lot about comfort zones. Multidisciplinary research may deal with these comfort zones and many students are now turning to these modern multidisciplinary studies. Is this a good approach?

When we started environmental studies in Tilburg in 1990, this was a discussion. Should we start a multidisciplinary study, or should we have economics, law, sociology, politics, and at some point add environmental issues? We decided to focus on the traditional approach. That is much more productive than training the students in a multidisciplinary way. These students often lack depths in knowledge. At some point, they have to make a choice. You need to step over the borders of other sciences in order to create something new. If you do not know what is happening in the environment, then you cannot be a good environmental economist either. When you finish your studies, then you can work together with the researchers who have an environmental background.

What is greatest failure of environmental economics at the moment?

I do not see big failures, but we can always improve!

There is a concern with which I have been walking around for some time.  We got to a point where we are able to advise on carbon taxes and to show the world that it is important to have another way of development. At the same time, I think this may not be enough. The problem with carbon taxes is that you may not avoid environmental degradation. If firms have enough resources to pay the taxes, you can say you can make the tax higher and at some point, you can eradicate the pollution, but this may take a while or you may never eradicate it. It is a trial and error process and at the same time, from the environmental side, we get warnings that we reach limits to what the earth can actually sustain. There is this famous paper on planetary boundaries in which they have nine areas where they say the earth really has its limits. In a way, economics is not prepared for limits. We still believe that everything is unlimited. We are missing something there. Yet at the same point, I do not have a very clear answer, because I also strongly believe in the incentives that we put forward with our policies, but I sometimes think this is not sufficient. We have to introduce some thinking of limits. This goes back to the limits-to-growth debate we had in the 70s. Although we never reached these limits yet, everything is still fine, we think, although we may have crossed a limit for the climate. I do not know, we will see, but I think it is a development that may become part of environmental economics in order to solve the issues we are facing.

In what direction would you like to see environmental economics develop? What would be the obstacles? Or differently, if there is something in our discipline that you could change, what would it be?

Environmental economics is inclusive, and designs policy that takes account of all costs and benefits. However, it also touches upon the carrying capacity of the earth. Therefore, I think that we have to ask ourselves the question whether our current set of policies, and the way in which we organize our economies, can solve all problems, or whether we need fundamental changes in our economies and policy institutions.

Could you share with us your thoughts or opinions on the necessary changes?

This is a big struggle, I must say. We do not have the right institutions at the global level. We still, for example, live in tax competition in Europe, and low taxes are often not compatible with protecting the environment. We need another type of institution. The European Union is not the type of institution that can save the environment. They talk a lot about the New Green Deal, but if they do not solve these institutional issues, they are not able to get anywhere.

There are many researchers who believe that Covid-19 gives rise to social change that may help to give rise to new institutions or might help us take steps in the right direction. Do you think Covid-19 is a game changer for environmental economics?

Maybe. The interesting thing about Covid-19 is that it has shown that society can take strict measures. All these lockdowns are very interesting, we have not seen that before. If we need such measures in order to prevent disasters and climate change, then it looks in principal possible. But we have to see whether that is really going to happen, I just don’t know. Covid-19 was a strong enough threat that people felt. They could see the threat and thus were willing to follow the measures that the government imposed to prevent it. It is harder with climate change to show what is going to happen when it hits us. Therefore, it is harder to implement these types of measures. Another reason why I said maybe is because we also slow down in a lot of activities, such as flying around the world. We know that flying is not very good for climate, but we have to wait and see what happens. Are we going back to normal? Nowadays it seems that the main objective is to bring people back into employment, which means that all these activities have to restart and continue. There are alternatives of course, such as improve the train system in Europe and employ stewards and stewardesses on trains. But I am afraid that people, maybe even out of laziness, prefer to go back to the old ways of doing things and that we are going to be confronted with the same problems as if Covid-19 never happened.

Aren’t our tools in environmental economics not well suited for this? For example, we tend to be more marginalist and we don’t really have the tools to deal with radical change.

That is true. I mentioned earlier that we have not paid enough attention to limits such as the earth capacity. Here I come to my favourite topic of tipping points. If you correctly anticipate tipping points, then you consider non-smooth marginal effects, when the fundamental change happens, and you realize that you cannot return easily to the old situation. If you know this, your need a policy instrument that prevents you from tipping, in case you do not want to run the risk of tipping. My own research has been on instruments that reduce the risk of tipping, but I have to say that my own research does not take into account that we may want to prevent tipping. If you carefully look at the models, there is always a risk that tipping will occur, and if you do not want that to happen, our instruments are not sufficient and our way of thinking is not sufficient.

What do you think of the revolution in applied environmental economics and the emergence of exciting new big data sets?

First, I think that we need both experimental research and traditional empirical research. Big data has changed the identification issue. In the past, we worried about identification because of a lack of data, but now it seems to be the other way around. I still strongly believe in going back and forth between theory and concepts, on the one hand, and empirical verification and induction, on the other hand. At the end, it is all about acquiring stable insights in reality.

We economists we tend to have an approach that is heavily relying on mathematics. Do you think that held us back or do you see that as an advantage?

I basically think that it is an advantage. The only point is that you should not stay there. It is an advantage if you have a good theoretical concept, and if you can actually analyse within this theoretical framework. You have to be able to perform deductions here. But at the same time, you have to get out of this and work on empirical verification or induction. It is true that environmental economists, especially in Europe, started off with theory. It was simple, we just added a pollution or environmental variable. This is not enough, but the fact that we had this conceptual way of thinking, implied that we have been able to develop a solid environmental profession in Europe. We are not data mining now, but we are trying to bring back something into our theoretical structures, and this is important.

Over your career we have seen a real change in the conventional economics view of Environmental Economics. How do you see this relationship changing over the next 20 years?

I think that under pressure of the limited carrying capacity of the earth, economics will change and become environmental economics!

How do you mostly get your ideas?

First, you have to build a broad fertile basis for ideas by reading, listening and thinking. Ideas can pop up by introspection, but mostly I get ideas by talking to other people. Over the years, you discover the colleagues with whom this works specifically well. It can happen anywhere and anytime.

Most researchers shy away from administrative duties because this takes time away from research. Instead, you have been, among others, a faculty dean, director of institutes and president of societies, editor of journals, scientific director, and government advisor. How do you feel has this impacted your research?

First of all, without these administrative activities my research output would have been larger. It would also have been better in the sense that I would have spent more time in order to get deeper into the issues. On the other hand, these activities put me into contact with people who had a positive influence on the direction of my research.

I understand that most researchers shy away from administrative duties, because research is more fun. However, someone has to do it because without a good infrastructure, the academia will not function properly. Many people have told me that they were happy that I was willing to do it. It is also interesting, and the gratitude from the research community was rewarding.

How much time did you invest in your work in general?

I never really worked from nine to five. Instead, I always combined work and fun. Often I worked on Sunday mornings or nights. I had maybe a 50-hour working week. Definitely, I wish I had been more efficient. While I work, I am concentrated, but I cannot do this for 8 hours a day. The other times, I do reports, meetings, etc. During those times, I am also easily distracted. I wish I had been able to spend more time on the real work.

Sometimes the work dominates, and it can be easy to forget about other things in life. In that case, people need to be put in front of a mirror. For me, my daughter and my grandchildren definitely provided this mirror. They would not let work dominate me too much.

Do you feel research comes easy for you?

Nothing comes for free, I think. Instead, I believe that if you are the type of person for whom everything comes easy, then you may be spoilt and you may not achieve so much given your talents. If I wanted to achieve something, then I definitely needed to work hard. Some talent helps, of course.

What is more fun being a Pater familias of your own family, and grand children especially, or a “Pater familias” of the environmental economics community?

Good question! My own family comes first, and especially my grandchildren give me a new boost in life. However, I have also experienced great joy in coaching some young people in academia who became a sort of children to me. It is indeed very nice to be an older member of the family of environmental economists.

How important is friendship in delivering top research, and especially top-interdisciplinary research?

I can only deliver good work with other researchers, if they are also good friends. However, people differ, so that I cannot speak for everyone. I believe in the positive effect of friendship. When building my group in Tilburg, it was an important criterion for me that we would form a group of people who like to see each other and who like to work together.

You are still young. What are your aspirations for the future?

I am not so young anymore. I still like to work, but I partly do different things. For example, I wrote a paper on the history of the EAERE and we are currently working on a textbook. I also have another job at the university, namely as ombudsman for scientific integrity issues. I miss teaching but I do not miss grading exams and bachelor theses. I also miss the conferences and I hope we can meet again in person in the future.

And now for a bit of fun. Do you know the concept of holidays or do you take your papers to the beach?

I like the combination. I bring papers and I continue to think on holidays, but I also like to add some free days after a conference, for example.

What is your favourite economics joke or anecdote from a conference?

I always forget jokes, but there are the typical economist jokes. A physicist and an economist have to advice how to move a very heavy object from a ship to the quay. The physicist starts designing a system with pulleys, but the economist says “assume that the object is not heavy”.

Cees and Rick believe that they know every answer that you may give to every question. Could you provide me with one question to which they do not know the answer?

What are the names of my grandchildren?

Please feel free to suggest someone else whose answers you would like to see.

Tasos Xepapadeas, Michael Hoel, Sangeeta Bansal, Valentina Bossetti, Rashid Hassan.