There`s No Such Thing as a Free Lunch from Ecosystems

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Transcript There`s No Such Thing as a Free Lunch from Ecosystems

Dining off Ecosystems:
from the free lunch to terminal
ecological indebtedness
Presentation to the concluding seminar in the series
‘Sustaining Future Ecosystem Services – from
Understanding to Action’
Professor Paul Ekins
Professor of Energy and Environment Policy, King’s College London
National Liberal Club, London
Friday 26th June, 2009
Principles of sustainable growth
• Borrow systematically only to invest, not to consume
• Keep money sound: control inflation, public borrowing, trade
deficits, indebtedness
• Establish transparent accounting systems that give realistic
asset values
• Maintain or increase stocks of capital (manufactured, human,
social, natural)
• As has become apparent every one of these principles has been
spectacularly broken over the last few years, even in the
financial sector and mainstream money economy
• What prospect then for the big one, maintaining and rebuilding
ecosystems/natural capital?
Ecosystems/Natural capital – the big one
• Climate science and the Millennium Ecosystem Assessment
make clear that without a radical reform of the human-nature
relation – in favour of nature – human civilisation is at grave
• Specifically, nine billion humans cannot live current Western
lifestyles and maintain a habitable planet: the first thing to go will
be climate stability, the whole biosphere may then start to
unravel. Issue is saving the human, not the planet.
• Any aspiration for sustainable economic growth must start from
the recognition of the need for the sustainable use of resources
and ecosystems
• It must also be rooted in basic laws of physical science:
indefinite physical expansion of the human economy on a finite
planet is impossible; all use of non-solar forms of energy creates
disorder, and potential disruption, in the natural world
• We must start by getting right the basic conception of how the
human economy relates to the natural environment
The ecological cycle
Resources (Source)
Waste absorption (Sink)
Ecosystem services (lifesupport, amenity etc.)
The ecological cycle and
human well-being
Resources (Source)
Waste absorption (Sink)
Ecosystem services (lifesupport, amenity etc.)
The economy as a subsystem of the biosphere
Eco-system services
Materially growing economic sub-system,
leaving less space for nature
The concept of capital and the
4-Capital Framework
Capital stocks (assets) provide a flow of goods and services
which contribute to human well-being. The stock value is the
net present value of the flow
Four types of capital recognised:
– Manufactured Capital: produced assets used to produce other
goods and services, e.g. buildings, transport infrastructure,
– Natural Capital: traditional natural resources (timber, water,
minerals) and other natural assets such as biodiversity, climate,
– Human Capital: health, wellbeing and productive potential of
– Social Capital: social networks that support efficient and cohesive
societies, e.g. social trust, norms, political and legal structures
Capital and sustainability
Places Environment in recognisable economic framework on
an equal basis with other factors of production (cf ‘externality’
Capital and sustainability: in the provision of goods and
services, capital depreciates; for sustainability it must be
replenished (investment)
Economic, social, environmental sustainability
Weak and strong sustainability (substitutability between
Potential for unsustainable development lies in loss of one or
more capital stocks, or in trade-offs made between different
forms of capital, and extent to which
Any decline represents a breach of some critical threshold (breach of which
threatens system integrity), and if not, whether
Any decline in one form is compensated by increases in other forms
Natural capital
• Characteristics, Values and Functions of Nature
– Characteristics: air, water, land, habitats
– Values: ecological (conservation, existence), social
(human health, personal, community, option), economic
(production, consumption, employment)
– Functions:
Natural capital can only be inferred from the performance of
environmental functions
Environmental function: “the capacity of natural processes
and components to provide goods and services that satisfy
human needs (directly and/or indirectly)” (de Groot 1992,
de Groot: Regulation, Habitat, Production, Information
CRITINC: Life support, source of resources, sink for wastes,
maintenance of human health, other contributions to human
welfare (e.g. amenity)
Environmental sustainability
• Sustainability: capacity for continuance
• Environmental sustainability: maintenance of
important environmental functions
• Importance:
– Not substitutable, irreversible loss, ‘immoderate’ losses
– Maintenance of health, evidence of threat, economic
• Thermodynamics: at a certain physical scale,
further physical growth becomes counterproductive.
– There is little doubt that except from a very short-term
perspective this scale has now been exceeded
– What is the optimal physical scale of the human economy?
– Have an answer of sorts for carbon; what about
Environmental sustainability:
maintaining important environmental functions
Functions of Nature
Functions for Humans
• Life Support
• Economy
• Source
• Human health
• Sink
• Human welfare
The failure of Western culture
The free lunch syndrome
Indicators of collapse
Focus on short-term consumption rather than long-term investment (cf the
No value given to ecosystems, ecosystem services, future ecosystem risk (natural
capital valued at the cost of turning it into commodities);
Inadequate and untransparent systems for measuring natural capital; leading to
Terminal ecological indebtedness: ecosystem, cultural and population collapse
Climate instability and impacts of climate change, accelerating
Habitat, ecosystem and biodiversity loss, leading to
The ‘perfect storm’ (Beddington 2030) of inadequate global supplies of
food, water and low-carbon energy, resulting in
Unprecedented pressures of global migration, fuelling social and
economic disruption and conflict, leading eventually to
The collapse of human populations (Schellnhuber’s 1 billion people by
The prospect is so dire that even a tiny probability of its realisation
should prompt wholesale systemic reform: in fact, we have the
understanding, but practically no action.
Action entails an unprecedented
policy challenge
The Stern Review Policy Prescription for
climate change
Carbon pricing: carbon taxes; emission trading
Technology policy: low-carbon energy sources; high-efficiency end-use
appliances/buildings; incentivisation of a huge investment programme
Remove other barriers and promote behaviour change: take-up of new technologies
and high-efficiency end-use options; low-energy (carbon) behaviours (i.e. Less
driving/flying/meat-eating/lower building temperatures in winter, higher in summer)
In a market economy, pricing is the key to resource efficiency, investment and
behaviour change
The basic insights from the Stern Review need to be applied to the use of other
environmental resources (water, materials, biodiversity [space])
Broadening the Stern approach
By 2050 6 tonnes per head of material use (instead of 20 today)
By 2050 2 tonnes/head of CO2 emissions (instead of 5 today)
Investment in habitat creation and ecosystem recovery
Major instrument
Tradable resource use permits (extraction + net imports (raw and embodied) between
cooperating countries) (cf EU ETS)
Linear reduction from current to sustainable resource use levels
Import taxation on non-cooperating countries with higher than average resource use
Development of resource measurement capability (required to avoid import taxation)
Sustainable commodity agreements to reduce environmental impacts of extraction (including
Instruments of national environmental policy
Economic instruments (tax/trading), regulation (e.g. for efficiency), voluntary agreements,
Only increasing relative prices signals scarcity, and gives incentives for both the development of
resource-efficient technologies and the adoption of resource-efficient behaviours
Importance of environmental tax reform (ETR)
Climate change policy so far largely
• For carbon/energy relative, but not absolute,
• Very little systematic policy on (noncarbon/energy) resource efficiency
• (Much) More stringent application of policy
instruments (especially price-based to avoid
rebound effects) is required
• Political feasibility (in the absence of cultural
• Implications for economic growth
The macro-economic costs of
increasing resource productivity
• Optimists:
• ‘Costs’ are really investments, can contribute to GDP growth
• Considerable opportunity for zero-cost mitigation
• A number of resource-efficient technologies are (nearly) available at
low incremental cost over the huge investments in the economic
system that need to be made anyway
• ‘Learning curve’ experience suggests that the costs of new
technologies will fall dramatically
• Resource efficiency policies can spur innovation, new industries,
exports and growth
• Pessimists:
• Constraining resource use is bound to constrain growth
• Cheap, abundant energy and other resources are fundamental to
industrial development
Conclusions on costs and growth
• Attaining greatly increased resource productivity will require huge
investments in resource-efficient technologies right along the innovation
chain (research, development, demonstration, diffusion).
• IEA ETP estimates of additional investment needs in energy sector alone:
USD 45 trillion (1.1% global GDP from now until 2050)
• Government funding of R,D&D must increase dramatically, but
demonstration and diffusion can only be driven at scale by markets
• This will require high (now) and rising resource prices, achieved by a
global trading scheme supplemented by national resource/environmental
policies over the next half century
• These high resource prices will incentivise investments in resource
efficiency and also greatly change lifestyles and consumption patterns
• Provided that the world goes cooperatively in this direction, there could be
high profits to be made from these high resource prices and changing
consumption patterns; technological and policy uncertainty mean that the
risks are also high
• Low impacts on growth assume no special productivity improvements
from cheap/plentiful/concentrated resources
• A world of low growth is preferable to one of collapsing eco-systems
Headline conclusion on
sustainable (green) growth
•Conclusion from book
Economic Growth and Environmental Sustainability: the
Prospects for Green Growth (Routledge 2000)
• Technologically feasible, economically feasible
requires sustained, wide-ranging, radical policy
interventions to bring about technological revolution and
change lifestyles. These interventions are resisted by
affected economic sectors (e.g. energy) and households
who want to keep current lifestyles (e.g. transport), or
attain Western lifestyles
Thank you
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