The language in which policy-makers discuss human well-being is economics. A country is `doing well' if GNP and incomes are on the rise and national debt is under control. Cost/benefit analyses almost always consider 'cost' in monetary terms. If the people who see or intuit the need to protect natural resources are going to communicate that need, they had better start talking in economic terms.
This week, economist Partha Dasgupta reviews Jared Diamond's Collapse for the London Review of Books. The basic message of Diamond's 525-page tome is that societies depend on natural resources like wood, water, soil and fish; that mismanagement of natural resources led to the spectacular collapse of ancient civilizations like the Yucatan Mayans, the Norse of Greenland, and the Easter Islanders; and that if we do not take more responsible steps to manage our own dwindling reserves our wasteful modern Western civilization could meet a similar fate. Dasgupta charges that Diamond is simplistic in his analysis, ignores the good that may come of exploiting natural resources, and lacks the `correct' framework - economics - for balancing the benefits versus the costs of environmental degradation.
Dasgupta is hardly circumspect himself, but he does present a helpful framework for thinking about national `wealth' and sustainable development:
An economy's productive base consists of its capital assets and its institutions. Ecological economists have recently shown that the correct measure of that base is wealth. They have shown, too, that in estimating wealth, not only is the value of manufactured assets to be included (buildings, machinery, roads), but also `human' capital (knowledge, skills, health), natural capital (ecosystems, minerals, fossil fuels), and institutions (government, civil society, the rule of law). So development is sustainable as long as an economy's wealth relative to its population is maintained over time. Adjusting for changes in population size, economic development should be viewed as growth in wealth, not growth in GNP.
So the `ecological economists' are out there, but there's still a ways to go. These are the "early days in the quantitative study of sustainable development," and estimates of wealth and economic productivity by institutions like the World Bank continue to omit significant natural resource contributions:
Among the many types of natural capital whose depreciation has not been included [in World Bank wealth estimates] are fresh water; soil; forests, wetlands, mangroves and coral reefs as providers of ecosystem services; and the atmosphere as a sink for such forms of pollution as particulates and nitrogen and sulphur oxides.
Still, the trend is encouraging. There's a body of literature now on `ecosystem services;' the March issue of Outside Magazine ran a long piece on `wilderness economics,' and blogs like Joel Makeower's are charting the dawning awareness of profit potential in sustainability within the business sector.
Meanwhile, in the ocean conservation world, we're doing our best to measure and articulate the economic value of healthy fisheries (for global food security and coastal economies), coral reefs (for well-managed tourism and medical innovation), and the costs of things like mercury pollution (public spending on treatment and special services for children and others poisoned by mercury, for cleanup of mercury-contaminated industrial sites).
We are. ...Right?
making the case in many tongues
Randy,
Thanks so much for taking the time to comment. You make an excellent point: `ecosystem services' include a whole host of benefits to man that current economic models, even the most progressive, ignore. But that's not a reason to abandon ecological economics; it's a very good reason to push the project further. The fact that the Scripps workshop economist had utterly failed to quantify the potentially enormous benefits to human health of marginal increases in biodiversity doesn't mean it can't be done, or that the attempt shouldn't be made. "Quantitative" and "Qualitative" are not two mutually exclusive camps. They're two different ways of looking at the world. Economists work to quantify all kinds of ostensibly qualitative costs and goods. As our understanding of what we take from a healthy environment deepens, the economic models we use to describe that exchange should evolve in kind.
Which is not to say that numbers alone will ever capture the full value of protecting seamounts or sea turtles. Every language has limits. The prosy language of moral obligation and spiritual renewal that has traditionally been the environmentalist's mother tongue has certainly fallen short, at times, of making a convincing case. On the other hand, philosophical arguments can still be incredibly powerful - `shifting baselines,' the way you've built and spread the concept, is a great example of one that is. So I don't think everyone working to protect the ocean's biodiversity should run out to get an econ degree. I do think that we should make our case in every language we can; that, of all the idioms around, economics is a potent one environmentalists have too long neglected; and that it's time to catch up.
Thanks again for writing. It's great to have your input here.
-- Sandy
From Randy Olsen
Hey -- I got this from Randy Olsen over at Shifting Baselines today in response to your post, he asked me to post it as a comment:
Hi Sandra -
Thanks for the great essay with lots of good information. I haven't read "Collapse" yet (got it sitting right here along with too many other things to read), but have read plenty of reviews of it, and more importantly, have a sense for the simple message it sends to the public, "If we don't change our ways we will go the way of the Easter Islanders," and that, to me, is the problem. I personally think there is virtually zero probability that humans are headed towards extinction. But what there's a very high risk of is that we're headed towards boredom. And that, in my little opinion, sucks.
This is why I've been pushing the term "shifting baselines" for the past three years. Its not about the grand, colossal collapse that might be looming, its about the gradual march towards a world of (albeit "sustainable") minimal diversity and maximal homogeneity.
It's not about the quantitative challenges (feeding everyone the bare minimum to stay alive), its about the qualitative challenges. And this is where all the Michael Crichtons and Bjorn Lomborgs (and even physicist Steven Wolfram that I got into this argument with a couple years ago) and so many of the economists don't seem to get it. There's a quality of life issue that doesn't appear in any of their models. We may end up with plenty of coral reefs around the world such that numerically it appears all is well, but if they're made up of the same ten species of corals and twenty species of fish its not going to be the same.
I saw this dilemma played out really nicely three years ago at a Scripps Biodiversity workshop where an economist put up a graph of diminishing returns for biodiversity and confidently explained that the problem is, "once you've got a bunch of species, adding a few more doesn't really count for much." A while later Joan Roughgarden (thankfully) brought the discussion back to his simplistic comments and explained that its actually the exact opposite for things like poisons produced by animals (which might have human health benefits). You find very few of them in low diversity ecosystems. Its not until you get to the rainforests where you have six or seven trophic levels and all that predation that species have produced these poisons -- i.e. the returns curve is exactly the opposite of diminishing returns.
That's called the difference between quantitative biology and qualitative biology, and I think is at the heart of so many mistakes made by economists and their models. If left unchecked, they will
guide us into a very sustainable, but very boring world where they will say, "What are you complaining about, we're providing you with enough calories to survive."
- Randy Olson
www.shiftingbaselines.org
Ecological economist TODAY on Grist!
I love Grist.
Today's featured interview is with Neva Goodwin, an ecological economist who is helping to revise how econ is taught.
Also, some links to economics programs and efforts at NOAA:
The National Ocean Economics Program
Economic Statistics for NOAA
Good stuff.
Green GDPs
Ok, apparently economists and governments the world over have been exploring the concept of a 'green GDP' for the past decade or so. China seems to be taking the lead: http://www.china.org.cn/english/2005/Mar/121445.htm
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