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It's the Ecology, Stupid

Article by Joshua E. Brown, University of Vermont, USA.

The most obvious fact about ecological economics is that, well, ecology comes before economics.

“For example,” says Joshua Farley, an economist at the University of Vermont, “without healthy ecosystems to regulate climate and rainfall and provide habitat for pollinators, agriculture would collapse.” Which makes it tough to sell cars.

Put another way, “we need economic production to survive, but we also need healthy ecosystems and the service they provide,” he says. No bees, no food, no trip to the grocery store.

This hierarchy of logic might seem self-evident, but to ecological economists — like Farley and graduate student Rachael Beddoe and their colleagues at UVM’s Gund Institute for Ecological Economics — the mainstream of economic thought seems to have the formula backward. Get the economy growing again, the conventional argument goes, then we’ll have the time and resources to take care of the environment; let the market set a price tag on conservation and the ecosystems will take care of themselves.

Farley and Beddoe are the lead authors of two new papers — one in the Proceedings of the National Academy of Sciences, the other in the journal Conservation Biology — that take aim at these economic orthodoxies.

A full world

There is abundant evidence that “further material growth no longer significantly contributes to improvement in quality of life,” Beddoe and her co-authors wrote in the February 24 edition of PNAS3.

Yet our institutions and industries rush on “like a runaway train,” she says, pushing for greater and greater material production and consumption. They’re driven by an underlying worldview that assumes growth equals progress.

But a finite planet can’t sustain endless growth — if in doubt, review the first law of thermodynamics — and the result of efforts to do so is not increased happiness, it’s accelerating climate change, soil depletion, declining energy resources, and loss of species that threaten the underpinnings of civilization, the paper contends.

Though the headlines are full of concern about a credit crunch, “the current financial crisis pales in comparison to the biophysical crisis,” they write.

So what’s to be done?

Remember the poor Akkadians. Study the forestry of New Guinea. Imagine a new culture framed around quality of life not economic growth.

That is, arguably, a fair summary of the article, co-authored by Beddoe, Farley, Gund Institute director Robert Costanza, visiting scholar Norman Myers, and eight other members of a UVM course in the spring of 2008, “Overcoming Institutional Roadblocks to Sustainability.”

“We are facing a global crisis that requires that we change worldviews, institutions, and technologies — our sociological “regime” — in an integrated way,” Beddoe says. In other words, the deepest threat is not a failure of banks, it’s a failure of beliefs — and the ways those beliefs shape our institutions.

In the early Industrial Revolution the world was still mostly empty of humans and their built environment. In this “empty” world it made sense to expand our consumption of natural resources and ignore the abundant services — like clean air and water — provided by ecosystems. But now the world is “full,” and efforts to increase material growth are no longer a road to happiness, but have become a roadblock to quality of life in most places in the world, the paper contends. Ongoing material growth decreases the ability of ecosystems to provide the life support that makes monetary wealth meaningful.

“It’s a crazy, maladapted system,” Beddoe says, “but we’re so used to it, it seems sensible.”

Old Akkad or New Guinea

As a solution, the authors propose a kind of managed evolution — to ward off the chaotic collapse of civilization that Jared Diamond and other historians have described happening in past societies that reached environmental limits. Like the Akkadians.

In the third millennium B.C., they built a mighty empire from the headwaters of the Euphrates to the Persian Gulf. Then, about 4180 years ago, the climate there suddenly got much drier. The Akkadians — like the Easter Islanders, Mayans, Greenland Norse and Anasai, among many now-vanished civilizations — apparently couldn’t adapt to new conditions and collapsed.

“What we can learn from history is that civilization declines aren’t simply a result of a brittle environment,” Beddoe says, “rather, decline is linked to a brittle ‘socio-ecological regime,’ or the response a society is able to mount to ecological crises.”

In contrast to the Akkadians, the article describes several cultures that have survived, including a 7,000-year-old silviculture system in the forests of New Guinea.

And what of today’s global economy? “A transition will occur in any case and it will almost certainly be driven by crises,” the authors conclude, but whether “these crises lead to decline,” they write, “or to a relatively smooth transition depends on our ability to anticipate the required changes and to develop new institutions that are better adapted.”

If far-sighted leaders and developed nations respond intelligently, the authors argue, they’ll be able to “stimulate and seed” an “evolutionary redesign” of our current culture and its relationship to nature.

“To a certain extent, we can design the future that we want by creating new cultural variants for evolution to act upon,” they write.

This would likely yield a “steady state” economy that reduces consumption and complexity while increasing efficiency; focuses on direct measures of well-being instead of monetary wealth as a proxy for well-being; and develops new institutions that protect common assets, like the atmosphere and oceans, instead of treating them as global garbage dumps.

Price determining, not price determined

Unfortunately, “until recent decades, economic decisions makers have largely ignored the nonmarket benefits provided by nature,” Farley wrote in the December 2008 edition of Conservation Biology, “resulting in unprecedented threats to ecological life-support functions” — like soil creation and clean air.

So it seems a step toward the changed world that Beddoe and Farley seek that a growing body of economists and scientists are working to bring these life-support functions into economic models and decision-making.

But the vogue of imagining that price mechanisms in a marketplace will lead us to good conservation outcomes probably won’t work, Farley argues in his paper, “The Role of Prices in Conserving Critical Natural Capital.”

Supply and demand do a good job of figuring out how much a pair of shoes is worth. But not so well for what Farley calls, “critical natural capital,” — those parts of nature we need to survive. There, complex and poorly understood ecosystems — that have no substitute and are subject to irreversible change — should be “price determining, not price determined,” he writes.

“Instead of letting prices determine how much conservation is needed, we should figure out how much conservation is required to ensure against ecological catastrophe,” Farley says, “and allow prices to adjust.”

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