Apr 25, 2013 ... Robert Costanza. • Chair in Public Policy. Crawford School of Public Policy.
Australian National University. Canberra ACT 0200, Australia.
Institute for Sustainable Development and International Relations April 25, 2013
Vivement 2050! Building a Sustainable and Desirable Economy-in-Society-in-Nature 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)
Tools & Analysis
Vision How the world is How we would like it to be
Practical Problem Solving
Implementation
“What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.” The Inflection Is Near? By THOMAS L. FRIEDMAN New York Times Published: March 7, 2009
The world is a complex, non-linear, adaptive system, with thresholds, tipping points, and surprises
From Lenton et. al. 2008
PEAK OIL: THERE ARE FUNDAMENTAL RESOURCE CONSTRAINTS
From Campbell 2004
PLANETARY BOUNDARIES: THERE ARE FUNDAMENTAL ECOLOGICAL CONSTRAINTS Rockström, J., et al. 2009. A safe operating space for humanity. Nature 461:472475 Steffen, W., J. Rockström, and R. Costanza. 2011. How Defining Planetary Boundaries Can Transform Our Approach to Growth. Solutions. 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
http://sustainabledevelopment.un.org/index.php?page=view& nr=627&type=400&menu=35
Robert Costanza, Gar Alperovitz, Herman Daly, Joshua Farley, Carol Franco, Tim Jackson, Ida Kubiszewski, Juliet Schor, and Peter Victor
http://www.2apr.gov.bt/
KEY POINTS: •Growth in material consumption is unsustainable: there are fundamental planetary boundaries. •Growth in material consumption beyond a threshold already reached by many is undesirable: it has negative effects on social and natural capital and in overdeveloped economies does not increase well-being. •Viable alternatives exist that are both sustainable and desirable, but they require a fundamental change of worldview and redesign of the entire “regime.”
“Empty World” Vision of the Economy Property rights
Building Education, Training,
Research Improvement
Perfect Substitutability Between Factors
Private
Public
Individual Utility/welfare
Capital (Built) Labor
Consumption Economic GDP Process
Goods and Services
Cultural Norms and Policy
Land Investment
“Full World” Vision of the Whole System Complex property rights regimes Individual Common
Well Being (Individual and Community)
Ecological services/ amenities
Public
Solar Energy
Restoration, Conservation Education, training, research. Institutional rules, norms, etc. Building
Natural Capital Human Capital SocialCapital Built Capital
Limited Substitutability Between Capital Forms
Consumption Wastes
Economic Production Process
GDP
Goods and Services
(based on changing, adapting preferences) Evolving Cultural Norms and Policy
Investment (decisions about, taxes community spending, education, science and technology policy, etc., based on complex property rights regimes)
negative impacts on all forms of capital
Materially closed earth system Waste heat
An Ecological Economy Recognizes that: • our material economy is embedded in society, which is embedded in our ecological life-support system, and that we cannot understand or manage our economy without understanding the whole, interconnected system; • growth and development are not always linked and that true development must be defined in terms of the improvement of sustainable well-being (SWB), not merely improvement in material consumption; • a healthy balance must be struck among thriving natural, human, social, and cultural assets, and adequate and well-functioning produced or built assets.
Primary Goal Current Economic Model
Green Economy Model
Ecological Economics Model
More: Economic growth in the conventional sense, as measured by GDP. The assumption is that growth will ultimately allow the solution of all other problems. More is always better.
More but with lower environmental impact: GDP growth decoupled from carbon and from other material and energy impacts.
Better: Focus must shift from merely growth to “development” in the real sense of improvement in sustainable human wellbeing, recognizing that growth has significant negative by-products. More is not always better.
Primary measure of progress Current Economic Model
Green Economy Model
Ecological Economics Model
GDP
Still GDP, but recognizing impacts on natural capital.
Index of Sustainable Economic Welfare (ISEW), Genuine Progress Indicator (GPI), or other improved measures of real welfare.
Scale/carrying capacity/role of environment Current Economic Model
Green Economy Model
Ecological Economics Model
Not an issue, since markets are assumed to be able to overcome any resource limits via new technology, and substitutes for resources are always available.
Recognized, but assumed to be solvable via decoupling.
A primary concern as a determinant of ecological sustainability. Natural capital and ecosystem services are not infinitely substitutable and real limits exist.
Distribution/poverty Current Economic Model
Green Economy Model
Ecological Economics Model
Given lip service, but relegated to “politics” and a “trickle-down” policy: a rising tide lifts all boats.
Recognized as important, assumes greening the economy will reduce poverty via enhanced agriculture and employment in green sectors.
A primary concern, since it directly affects quality of life and social capital and is often exacerbated by growth: a too rapidly rising tide only lifts yachts, while swamping small boats.
Economic efficiency/allocation Current Economic Model
Green Economy Model
Ecological Economics Model
The primary concern, but generally including only marketed goods and services (GDP) and market institutions.
Recognized to include natural capital and the need to incorporate the value of natural capital into market incentives.
A primary concern, but including both market and nonmarket goods and services, and effects. Emphasis on the need to incorporate the value of natural and social capital to achieve true allocative efficiency.
Property rights Current Economic Model
Green Economy Model
Ecological Economics Model
Emphasis on private property and conventional markets.
Recognition of the need for instruments beyond the market.
Emphasis on a balance of property rights regimes appropriate to the nature and scale of the system, and a linking of rights with responsibilities. Includes larger role for commonproperty institutions in addition to private and state property.
Role of government Current Economic Model
Green Economy Model
Ecological Economics Model
Government intervention to be minimized and replaced with private and market institutions.
Recognition of the need for government intervention to internalize natural capital.
Government plays a central role, including new functions as referee, facilitator, and broker in a new suite of commonasset institutions.
Principles of governance Current Economic Model
Green Economy Model
Ecological Economics Model
Laissez-faire market capitalism.
Recognition of the need for government.
Lisbon principles of sustainable governance.
Ecosystem Services: the benefits humans derive from functioning
www.es-partnership.org
www.trucost.com
ISI
Queried 20/3/2013
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 Farber, Monica Grasso, Bruce Hannon, Karin Limburg, Shahid Naeem, Robert V. O’Neill, Jose Paruelo, Robert G. Raskin, Paul Sutton & Marjan van den Belt *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................................................................................................ .........
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$18 trillion per year.
2nd most cited article in the last 15 years in the Ecology/Environment area according to the ISI Web of Knowledge. Almost 4000 citations as of 3/13
Summary of global values of annual ecosystem services (From: Costanza et al. 1997)
Biome
Area (e6 ha)
Marine Open Ocean Coastal Estuaries Seagrass/Algae Beds Coral Reefs Shelf
36,302 33,200 3,102 180 200 62 2,660
577 252 4052 22832 19004 6075 1610
20.9 8.4 12.6 4.1 3.8 0.3 4.3
Terrestrial 15,323 Forest 4,855 Tropical 1,900 Temperate/Boreal 2,955 Grass/Rangelands 3,898 Wetlands 330 Tidal Marsh/Mangroves 165 Swamps/Floodplains 165 Lakes/Rivers 200 Desert 1,925 Tundra 743 Ice/Rock 1,640 Cropland 1,400 Urban 332
804 969 2007 302 232 14785 9990 19580 8498
12.3 4.7 3.8 0.9 0.9 4.9 1.6 3.2 1.7
92
0.1
Total
51,625
Value Global per ha Flow Value ($/ha/yr) (e12 $/yr)
33.3
Figure S1. Map of global annual ecosystem services based on 201 1 land areas and 2011 unit values
45.9
145.0
-4.3
41.6
-20.2
124.8
Economic Reasons for Conserving Wild Nature Costsof expanding and maintaining the current global reserve network to one covering 15% of the terrestrial biosphere and 30% of the marine biosphere
Benefits(Net value* of ecosystem services from the global reserve network)
=
$US 45 Billion/yr
=
$US 4,400-5,200 Billion/yr
* Net value is the difference between the value of services in a “wild” state and the value in the most likely human-dominated alternative
Benefit/Cost Ratio = 100:1 (From: Balmford, A., A. Bruner, P. Cooper, R. Costanza, S. Farber, R. E. Green, M. Jenkins, P. Jefferiss, V. Jessamy, J. Madden, K. Munro, N. Myers, S. Naeem, J. Paavola, M. Rayment, S. Rosendo, J. Roughgarden, K. Trumper, and R. K. Turner 2002. Economic reasons for conserving wild nature. Science 297: 950-953)
EcoServices Classified According to Rivalness and Excludability
Rival
Non-rival
Excludable
Non-Excludable
Market Goods and Services
Common Pool Resources
(some provisioning services)
(some provisioning services)
Congestable Services
Public Goods and Services
(some recreation services)
(most regulatory and cultural services)
From: Costanza, R., 2008. Ecosystem Services: Multiple classification systems are needed. Biological Conservation 141:350-352
Fair distribution is essential to quality of life
Source: Deaton, 2008.
GDP/capita and GPI/capita in the United States
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 (in press)
health health water education water education community community fairness fairness food security food security identity energy identity energy ecoservices ecoservices freedom freedom income leisure income leisure participation participation
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)
The dimensions of the new economy include: A. Sustainable scale: respecting ecological limits B. Fair distribution: protecting capabilities for flourishing C. Efficient allocation: building a sustainable macro-economy
RESPECTING ECOLOGICAL LIMITS •Waste emission stocks and flows •Renewable resource stocks, flows, funds, and services •Unacceptable tradeoffs: ecological and economic thresholds •Redirecting technology toward sustainable solutions •Stabilization of population
PROTECTING CAPABILITIES FOR FLOURISHING •Sharing the work •Tackling systemic inequality •Strengthening human and social capital •Expanding the “commons sector” •Removing communication barriers and improving democracy
BUILDING A SUSTAINABLE MACRO-ECONOMY • Changing the institutions: Monetary reform for sustainability and justice • Tax bads, not goods • Tax what we take, not what we make • Taxation to reduce inequality • Increasing financial and fiscal prudence • Improving macro-economic accounting • Improving macro-economic and regional coordination
Example Policy Reforms Reversing Consumerism Expanding the Commons Systematic Caps on Natural Resources Sharing Work Time
A no-growth disaster
A no-growth disaster
A better low/no-growth positive 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
New meanings and measures of success
12 things we need to change to create a better world A no-growth disaster
Limits on materials, energy, wastes, and land use
12 things we need to change to create a better world A no-growth disaster
More meaningful prices
12 things we need to change to create a better world A no-growth disaster
More durable, repairable products
12 things we need to change to create a better world A no-growth disaster
Fewer status goods. More community assets.
12 things we need to change to create a better world A no-growth disaster
More informative advertising
12 things we need to change to create a better world A no-growth disaster
Better screening of technology
12 things we need to change to create a better world A no-growth disaster
More efficient capital stock
12 things we need to change to create a better world A no-growth disaster
More local, less global
12 things we need to change to create a better world A no-growth disaster
Reduced inequality
12 things we need to change to create a better world A no-growth disaster
Less work, more leisure
12 things we need to change to create a better world A no-growth disaster
Education for life, not just work
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
www.thesolutionsjournal.org
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