Ecological Economics as a Framework for Sustainability

Ecological Economics as a Framework for Sustainability Robert Costanza • Chair in Public Policy Crawford School of Public Policy Australian National University Canberra ACT 0200, Australia • Editor in Chief, Solutions (www.thesolutionsjournal.org)

Donora Pennsylvania, 1948, M idday 2012 Beijing, China

Tools & Analysis

Vision How the world is How we would like it to be

Prac=cal Problem Solving

Implementation

Human influence on the earth system is now so large, that a new geologic era (the Anthropocene) has begun. We now live in a “Full World”

The world is a complex, non-‐linear, adapCve system, with thresholds, Cpping points, and surprises

From Lenton et. al. 2008

THERE ARE FUNDAMENTAL Planetary Boundaries Rockström, J., et al. 2009. A safe operaCng space for humanity. Nature 461:472-‐475 Steffen, W., J. Rockström, and R. Costanza. 2011. How Defining Planetary Boundaries Can Transform Our Approach to Growth. Solu6ons. Vol 2, No. 3, May 2011

We need a third movie…

We need a third movie… A sustainable and desirable economy-‐in-‐society-‐in-‐nature

Ecological Economics:

A vision of the economy embedded in society embedded in the rest of nature

Society Economy

Robert Costanza, Gar Alperovitz, Herman Daly, Joshua Farley, Carol Franco, Tim Jackson, Ida Kubiszewski, Juliet Schor, and Peter Victor

hXp://sustainabledevelopment.un.org/index.php? page=view&nr=627&type=400&menu=35

KEY POINTS: •  Growth in material consumpCon is unsustainable: there are fundamental planetary boundaries. •  Growth in material consumpCon beyond a threshold already reached by many is undesirable: it has nega=ve effects on social and natural capital and in overdeveloped economies does not increase well-‐being. •  Viable alternaCves exist that are both sustainable and desirable, but they require a fundamental change of worldview and redesign of the en=re “regime.”

“Empty World” Vision of the Economy

“Full World” Vision of the Whole System

Ecosystem services are the benefits humans derive from ecosystem functioning ECOSYSTEM SERVICES Gas regulation Climate regulation Disturbance regulation Water regulation Water supply Erosion control and sediment retention Soil formation

ECOSYSTEM FUNCTIONS Regulation of atmospheric chemical composition. Regulation of global temperature, precipitation, and other biologically mediated climatic processes at global, regional, or local levels. Capacitance, damping and integrity of ecosystem response to environmental fluctuations. Regulation of hydrological flows. Storage and retention of water. Retention of soil within an ecosystem. Soil formation processes.

Nutrient cycling

Storage, internal cycling, processing, and acquisition of nutrients.

Waste treatment

Recovery of mobile nutrients and removal or breakdown of excess or xenic nutrients and compounds. Movement of floral gametes.

Pollination Biological control Refugia Food production Raw materials Genetic resources

Trophic-dynamic regulations of populations. Habitat for resident and transient populations. That portion of gross primary production extractable as food. That portion of gross primary production extractable as raw materials. Sources of unique biological materials and products.

Recreation

Providing opportunities for recreational activities.

Cultural

Providing opportunities for non-commercial uses.

From: Costanza, R. R. d'Arge, R. de Groot, S. Farber, M. Grasso, B. Hannon, S. Naeem, K. Limburg, J. Paruelo, R.V. O'Neill, R. Raskin, P. Sutton, and M. van den Belt. 1997. The value of the world's ecosystem services and natural capital. Nature 387:253-260

Ecosystem Services: the Missing: Interac=on with benefits humans derive from other forms oecosystems" f capital functioning

www.es-partnership.org

NATURE VOL 387 15 MAY 1997 !

The value of the world’s ecosystem services and natural capital! Robert Costanza, Ralph d’Arge, Rudolf de Groot, Stephen

2nd most cited article in the Ecology/Environment area according to the ISI Web of Knowledge with more than 4000 citations

Farber, Monica Grasso, Bruce Hannon, Karin Limburg, Shahid Naeem, Robert V. O’Neill, Jose Paruelo, Robert G. Raskin, Paul Sutton & Marjan van den Belt!

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The services of ecological systems and the natural capital stocks that produce them are critical to the functioning of the Earth’s life-support system. They contribute to human welfare, both directly and indirectly, and therefore represent part of the total economic value of the planet. We have estimated the current economic value of 17 ecosystem services for 16 biomes, based on published studies and a few original calculations. For the entire biosphere, the value (most of which is outside the market) is estimated to be in the range of US $16–54 trillion (1012) per year, with an average of US$33trillion per year. Because of the nature of the uncertainties, this must be considered a minimum estimate. Global gross national product total is around US$18 trillion per year.!

Valuing

www.trucost.com

THE PRIMARY PRODUCTION AND PRIMARY PROCESSING SECTORS ANALYZED IN THIS STUDY ARE ESTIMATED TO HAVE UNPRICED NATURAL CAPITAL COSTS TOTALLING US$7.3 TRILLION, WHICH EQUATES TO 13% OF GLOBAL ECONOMIC OUTPUT IN 2009.

Fair distribuCon is essen-al to quality of life

Source: Deaton, 2008.

Fair distribuCon is essen-al to quality of life

A range of goals for national accounting and their corresponding frameworks, measures, and valuation methods Goal

___________ Marketed

Basic Framework

Nonenvironmentally adjusted measures

Economic Income Weak Sustainability

___________

Economic Welfare

Human Welfare

value of the wefare effects of income and other factors (including distribution, household work, loss of natural capital etc.)

assessment of the degree to which human needs are fulfilled

Strong Sustainability

value of 1 + non2 + preserve marketed goods marketed goods essential natural and services and services capital produced and consumption consumed in an economy

GNP

MEW

(Gross National Product)

(Measure of Economic Welfare)

HDI

(Human Development Index)

GDP (Gross Domestic Product)

NNP (Net National Product)

Environmentally adjusted measures

NNP’ (Net National Product ENNP SNI including non(Environmental Net (Sustainable National produced assetts) National Product) Income)

SEEA

SEEA

(System of (System of Environmental Environmental Economic Accounts) Economic Accounts)

Appropriate Valuation Methods

Market values 1 + Willingness 2 + Replacement to Pay Based Costs,+ Values (see Production Table 2) Values

ISEW

(Index of Sustainable Economic Welfare)

HNA

(Human Needs Assessment)

GPI

SWB

(Genuine Progress Indicator)

(Subjective WellBeing)

3+ Constructed Preferences

4+ Consensus Building Dialogue

from: Costanza, R., S. Farber, B. Castaneda and M. Grasso. 2000. Green national accounting: goals and methods. Chapter in: Cleveland, C. J., D. I. Stern and R. Costanza (eds.) The nature of economics and the economics of nature. Edward Elgar Publishing, Cheltenham, England (in press)

Genuine Progress Indicator (or ISEW) by Component!

Additions

Subtractions

Personal Consumption Expenditure Income Distribution Personal Consumption Adjusted for Income Inequality Services of Household Capital Services Highways and Street Value of Household Labor Value of Volunteer Work Built Capital! Cost of Consumer Durables Human Capital! Loss of Leisure Time Cost of Commuting Social Capital! Cost of Automobile Accidents Natural Capital! Cost of Crime Cost of Family Breakdown Cost of Underemployment Cost of Household Pollution Abatement Cost of Water Pollution Cost of Air Pollution Cost of Noise Pollution Loss of Wetlands Lost of Farmland Depletion of Nonrenewable Resources Long-Term Environmental Damage Cost of Ozone Depletion Loss of Forest Cover Net Capital Investment Net Foreign Lending and Borrowing

$US/capita

United States GUnited DP/capita and GPI/capita States

GDP/capita

GPI/capita

Year

www.green.maryland.gov/mdgpi/

GPI /capita for the 17 countries for which it has been estimated

From: Kubiszewski, Costanza et al. 2013. Beyond GDP: Measuring and Achieving Global Genuine Progress. Ecological Economics 93:57-68"

!



Economic growth Un-‐Economic growth

From: Kubiszewski, Costanza et al. 2013. Beyond GDP: Measuring and Achieving Global Genuine Progress. Ecological Economics 93:57-‐68 "

!

The dimensions of the new economy include: A.  Sustainable scale: respecCng ecological limits B.  Fair distribuCon: protecCng capabiliCes for flourishing C.  Efficient allocaCon: building a sustainable macro-‐economy

A no-‐growth disaster

A no-‐growth disaster

A beXer low/no-‐growth posi=ve economy

Source: Victor, P. 2008. Managing Without Growth, Edward Elgar.

12 things we need to change to create a better world A no-growth disaster

1.

New meanings and measures of success


2.

Limits on materials, energy, wastes, and land use


3.

More meaningful prices


4.

More durable, repairable products


5.

Fewer status goods


6.

More informa=ve adver=sing


7.

BeXer screening of technology


8.

More efficient capital stock


9.

More local, less global


10

Reduced inequality


11

Less work, more leisure


12

Educa=on for life, not just work

health water educa=on community fairness food security iden=ty energy ecoservices freedom income leisure par=cipa=on

Elements of well-‐being & Quality of Life

The Sustainable and Desirable “doughnut” (after: K. Raworth. 2012. A safe and just space for humanity: can we live within the doughnut? Oxfam International)

To create a sustainable and desirable economy-in-society-in-nature requires:" • Breaking our addiction to the "growth at all costs" economic paradigm, to fossil fuels, and to over-consumption" • Envisioning a more sustainable and desirable future that focuses on quality of life, recognizing the contributions of natural and social capital."

www.asap4all.com

Planetary Boundaries

Overall Goal:

Sustainable, Prosperous, and Equitable Well-‐Being (for humans and the rest of nature) Basic Human Needs

(subsistence, reproduc=on, security, affec=on, par=cipa=on, leisure, crea=vity, iden=ty, freedom, etc.)

SubjecCve Well-‐Being

(moderated by happiness skills)

New Development Paradigm

(rearrange the economy, society, and our rela=onship to the rest of nature)

Capital Assets

(Natural, Built, Human and Social (including financial))

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Editor'in'Chief:'Robert&Costanza&&&&Associate'Editors:&David&Orr,&Paul&Hawken,&and&John&Todd&&&&&Managing'Editor:'Ida& &

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Editorial'Board:'Gar&Alperovitz,&Ray&Anderson,&Vinya&Ariyaratne,&Robert&Ayres,&Peter&Barnes,&Bill&Becker,&Lester&Brown,&

Ernest&Callenbach,&Cutler&Cleveland,&Raymond&Cole,&Rita&Colwell,&Bob&Corell,&Herman&Daly,&Thomas&Dietz,&Josh&Farley,& Jerry&Franklin,&Susan&Joy&Hassol,&Richard&Heinberg,&Jeffrey&Hollender,&Buzz&Hollling,&Terry&Irwin,&Jon&Isham,&Wes&Jackson,& Patrick&C.&Kangas,&Tim&Kasser,&Frances&Moore&Lappe,&Rik&Leemans,&Tom&Lovejoy,&Hunter&Lovins,&Manfred&Max1Neef,& Peter&May,&Jaqueline&McGlade,&Bill&McKibben,&William&Mitsch,&Mohan&Munasinghe,&Norman&Myers,&Elinore&Ostrom,&Bill& Rees,&Wolfgang&Sachs,&Peter&Senge,&Anthony&Simon,&Gus&Speth,&Larry&Susskind,&David&Suzuki,&Mary&Evelyn&Tucker,&Alvaro& Umaña,&Marjan&van&den&Belt,&Sim&van&der&Ryn,&Peter&Victor,&and&Mike&Young&

Thank you

cultural creatives share a series of attitudes and concerns: "they like to get a synoptic view [and] see all the parts spread out side by side and trace the interconnections"; they have strong concerns about the well-being of families; they have a well-developed social consciousness and a "guarded optimism for the future"; they are disenchanted with "owning more stuff... materialism... status display and the glaring social inequities of race" and are critical of almost every big institution of modern society, including corporations and government. This cultural group is drawn from all classes, races, education and income levels and social backgrounds and has emerged only during the past 50 years.

Paul H. Ray and Sherry Ruth Anderson. 2001. The Cultural Creatives: How 50 Million People Are Changing the World. Three Rivers Press