Global Recession; An opportunity to create a more sustainable and desirable future<\/p>\n
13 March 2009
\nRobert Costanza<\/p>\n
Jeanette Fitzsimons:<\/em> Bob Costanza:<\/em> Empty-world model of economy: Land, labour & capital. -> economic process -> goods and services -> cultural norms and policy -> individual utility\/welfare (or revinvested in L L & C). Premises: more always better, economy can grow forever, private property is always best. Public goods not well dealt with in this vision. Discussion on the news reflects this view of the economy. Get back on the track of exponential growth. Empty World Energy Planning: Alabama Power\u2019s motto \u2018Always On: With electricity prices 15% other states, why not?\u2019<\/p>\n Full-world model: Materially closed earth system. Natural, Human, Social and Manufactured capital. Not perfect substitutability between types of capital. Wellbeing is complex (science of happiness). Natural capital provides ecosystem services \u2013 climate regulation, water etc. Some of these contribute directly to human wellbeing. <\/p>\n QOL: interaction of human needs and subjective perception of their fulfilment, as mediated by the opportunities available to meet the needs. Missing from economic analyses: spirituality, creativity, identity, freedom etc. <\/p>\n Wellbeing v. GDP: Economic gains for a while, then a kink, and more material consumption doesn\u2019t add much. Policies should aim at convergence \u2013 middle between low and high-consuming countries. <\/p>\n Distribution of production of natural wealth much different to convential economic wealth. GDP being used as proxy measure of welfare for decades. GNP adds everything together, doesn\u2019t subtract. Oil spills add to GNP. Alternatives: ISEW, GPI (Genuine Progress Indicators). Or even better, human welfare measures: HDI, HNA. GNP should be in the denominator, not the numerator. GPI (or ISEW) has a bunch of additions and subtractions. GDP and ISEW correlate for a while, but more recently starts to dissipate. US: GDP doubled since 1975, GPI peaked in 1975 and relatively flat since then. US has been in a quality of life recession since 1975. Happiness surveys: US has stayed flat for ages. Graphs here: http:\/\/www.eoearth.org\/article\/Toward_an_ecological_economy<\/p>\n Bottom line: GDP is not sustainable and does not necessarily bring happiness. How we manage the natural & social capital \u2013 the commons. They\u2019re gifts, they\u2019re shared. Inherited. Capitalism 3.0<\/em> \u2013 Peter Barnes<\/a>. Value of common assets far exceed the private and state assets. Ecosystem services make up a large part of that. This breaks down the distinction between economy \/ ecology. Millennium Ecosystem Assessment<\/a>. Costanza et al synthesised value of all eco services in 1997<\/a>: $16-54 trillion per year. Imprecise but conservative estimate. Degradation of eco services causes significant harm to human well-being. Cost\/benefit for conservation in the US: 100:1. <\/p>\n MEA scenarios: \u2018order from strength\u2019, \u2018adapting mosaic\u2019. Peter Victor, Managing Without Growth: Slower by design<\/em><\/a>. Macroeconomic model for Canada \u2013 could we have an economy that wasn\u2019t growing. Full employment, low carbon emissions etc. Stabilise consumption. Fewer status goods, more public goods. Green investments. Stabilise govt spending. Balance trade. Stabilise population. Stabilise capital production. Renewable energy. Stabilise labour force. Slower but more discriminating tech change. Reduce work hours. <\/p>\n Making the market tell the truth. Privitization is not the answer: most eco services are public goods. But signals are required. Full-cost accounting. Trucost Ltd. Tax bads not goods. Charge for depletion of natural capital. Payments for ecosystem services \u2013 Costa Rica. Assurance bonds to incorporate uncertainty about impacts. PPPP. Expand the \u2018commons sector\u2019. <\/p>\n Lisbon principles of sustainable governance<\/a>: Responsibility, scale-matching (institution\u2013process), precaution (burden of proof), adaptive management (experimental policy), full-cost allocation, participation (involve all stakeholders). <\/p>\n New commons sector: Global (Earth Atmospheric Trust), National (American Permanent Fund, Children\u2019s start-up trust\u2026), Regional (), ? (). Earth Inc. NGO. Redefining profit. Stop global warming, ameliorate poverty. <\/p>\n Global recession helping with emission path to stabilisation. New institutions and incentives required. Atmospheric Trust<\/a>. Cap & trade with gradually reducing cap. Revenue goes to trust fund, part to everyone on earth per capita. Less aggressive than carbon tax. Rest of revenue for enhance and restoring the asset. <\/p>\n Changing goals: more -> better. Measures: GDP -> GDI. Scale\/carrying capacity: growth forever -> ?. Distribution\/poverty: rising tide lifts all boats -> ?. Economic efficiency\/allocation: ?. Property rights: private -> private + common + state. Role of government: ?. Principles of government: lassie faire -> Lisbon.<\/p>\n Good stimulus package \u2013 what would it look like? Renewable energy, smart power grids etc; full utilisation of human capital, universal quality education; rebuilding social capital, more leisure; restoration of natural capital assets. <\/p>\n Conclusion: Break addiction to growth at all costs. Difficult but necessary. Focus on quality of life, recognise contribution of natural and social capital. New vision, measures, institutions, new technologies. New journal: Solutions<\/a>. <\/p>\n More related links at www.uvm.edu\/giee\/publications<\/p>\n Q: What is the difference between state & common property? Q: Has any government used e.g GPI for budget process? Q: Market signals, eco taxes. Any ideas on how to address the regressive nature of eco-taxes? My (unasked) Qs
\n[lots of claps]
\n300 respondees on a Friday night \u2013 pretty good.
\n[Very warm feeling]<\/p>\n
\nMy and Jeanette\u2019s ideas are very close. The idea of using the current crisis to move green is getting some mainstream currency. Don\u2019t want to get back on the same track we were on. Opportunity to rethink entire agenda. Anthropocene now, not Holocene. Human activities changing major global cycles. Full world. When our economic ideas were being formed, natural capital was abundant, built capital was scarce. \u2018The folly of growth\u2019 NewScientist<\/a>. Oil peak. Net energy production even worse curve than gross. Oil reserves concentrated in unstable parts of the world. Climate disruption \u2013 rather than \u2018climate change\u2019, or \u2018global warming\u2019. Improving ability to understand complexadaptive systems. Hockey-stick graph. Stern Report<\/a>. Cost of doing nothing. Sustainability or Collapse<\/em><\/a> \u2013 my book. Look at the past. Understand the past \u2013 apply science. Develop models. Integrated History and future of People on Earth (IHOPE) [amazing] graph<\/a>. Civilisation developed during stable climate. 1950 \u2013 the great acceleration. Fossil fuels. \u201cthe ones most responsible to change\u201d \u2013 attrib. Charles Darwin. Collapse \u2013 Jared Diamond<\/a>. Systems that lose resilience are vulnerable to shocks from several sources. Unprecedented change during great acceleration: ecosystems, storms, floods. Potential tipping points. Recession presents necessity to change worldviews, institutions and technology in an integrated way. Interdependent. In a full context world, what is \u2018the economy\u2019 and what is it for? Man on the street: it\u2019s the market. It\u2019s for producing goods & services. But in our new world, we need to broaden: it\u2019s everything that contributes to human wellbeing, and the sustainability of wellbeing. Maintaining quality of life. <\/p>\n
\nA: Spectrum of things. <\/p>\n
\nA: Not yet<\/p>\n
\nA: Trusts can be applied at other scales, not just global. Cap & dividend scheme is on the table in the US at the moment. Next round of Kyoto may do it. In Vermont, bill introduced: Vermont Common Asset Trust. <\/p>\n
\nIf the cost benefit ratio is 100:1, why is it a difficult sell?
\nWho gets paid for eco services in Costa Rica?
\nIn these schemes the GDP is going down down down \u2013 how to soften that difficult and famous number?<\/p>\n
![Integrated History and future of People on Earth (IHOPE) [amazing] graph<\/a>. Civilisation developed during stable climate. 1950 \u2013 the great acceleration. Fossil fuels. \u201cthe ones most responsible to change\u201d \u2013 attrib. Charles Darwin.](\"http:\/\/www.eoearth.org\/image\/Human-environment_relationship_figure_1.gif\"){kind=link}