Why are economists the last sane optimists and what can they teach church leaders about environmental stewardship? These questions grow in importance as religious organizations dedicate themselves to issues such as climate change and energy use.

Last summer gas hit over $3.00 per gallon, cities anticipated electrical blackouts, and the country faced serious prospects of petroleum supply disruptions. Meanwhile, our church, Pilgrim Congregational, was debating the reconstruction of its roof. This was sure to be a major project with the cost somewhere in the low six figures.

This project raised questions about tradeoffs; i.e., money spent on the roof isn’t available to pursue the church’s commitments to social welfare. Design choices raised ethical questions. Our cheapest roof would merely keep out the weather. The most expensive would save energy and heating costs. Tradeoffs were conceptually clear. Fortunately, we have members with the talent and experience to calculate them.

This illustrates an important lesson for church leaders. The real costs of money we invested in the new roof, a necessary repair, were the lost opportunities to spend it on truly needy folks, not just now but for years. Ramona and I have strong interests in the congregation’s good decisions. In addition to responsibilities implied by membership, we’ve made long-term commitments to Pilgrim.

In a long-lost essay published during the energy “crisis” of the late 1970s, I wrote, “Economists are America’s last sane optimists.” The debate over our roof provided the best demonstration of economists’ optimism I’ve witnessed in nearly 30 years.

In Congregationalist tradition it’s an abuse of authority to vest decisive power in one ruling body. Hence, important decisions are made with the congregation’s active participation. Again, our task was to weigh the costs and benefits of competing options. We understood that the real costs were opportunities foregone, obviously greater if we selected the most expensive roof. These considerations provided the context of discussion, debate, and choice.

Last summer, many sensible people and much of the media were predicting yet another energy crisis. One parishioner, a retired professor with a science Ph.D., argued for an expensive, energy-conserving design. He concluded his plea with a rhetorical question: “Is there anyone in this room who doesn’t believe that energy prices will continue to rise from now on?”

Of course he expected full consensus on such an obvious point. There was, however, a brave and independent dissenter. He raised his hand indicating that, no, he didn’t believe energy prices would continue to rise from now on. This man is a highly respected MSU professor who specializes in agricultural commodity markets. Why was our economist friend an optimistic outlier and why do so many economists agree with him?

Economists have a useful, tested model of how the world works. They know that when property rights are secure and folks operate under the rule of law, scarcity of traded commodities never wins a race against creativity. Some quite important things will become scarce, mountain gorillas and white rhinos for example. But not commodities. Here’s why.

Good economists know, intuit, and believe that commodity prices convey information and incentives to act on that information, usually in socially responsible ways. The economist at Pilgrim knew that higher prices give signals to conserve, substitute, and innovate. Hence, he correctly believed that energy prices would not endlessly rise. (NPR recently reported gas has fallen to $1.98 per gallon; in addition, natural gas has declined by more than half.) If we assumed ever-escalating energy prices and hence overinvested in our roof, we would sacrifice Pilgrim’s primary missions.

Higher prices work like gravity; they relentlessly nudge consumers to act as though they care about the needs of others. Alas, this isn’t universal and doesn’t always work. A few people are so rich they are indifferent to changes in commodity prices. While their environmental footprint is often huge, there aren’t many who are super-rich. When folks are insensitive to financial costs, churches may foster stewardship through moral suasion.

Economists are optimists, for their discipline explains how we overcome scarcity through social coordination. Their insights can help us design institutions that promote well-being and become better stewards of the earth. Here’s hoping religious leaders will join them.