Transcript Biodiversity What is it and Why is it Important?

The Nature of Resources,
and the Resources of Nature:
Framing an Ecological Economics
Approach to Problem-Solving
Jon D. Erickson
Rubenstein School of Environment
and Natural Resources
University of Vermont
Burlington, Vermont, USA
[email protected]
www.uvm.edu/~jdericks/
Allocation of scarce resources
toward alternative desirable ends
1.
2.
3.
What are the desirable ends?
What scarce resources are needed
to obtain those ends?
What ends get priority? (How do we
allocate?)
Where do you stand?
 Economic
growth and environmental
protection are fundamentally in
conflict with one another.
 There
should be no limit to the
amount of money that an individual
can earn in today’s society.
 Technology
and human ingenuity will
solve our environmental problems.
Allocation of scarce resources
toward alternative desirable ends
MEANS
ALLOCATION
f (N, L, K)
f (L, K)
f (K)
f ($)
ENDS
nt
Factor services
Goods
Household
Firms
(production
Government )G
Financial markets
al consumptio
Other countr
ies
What’s Wrong with this Picture?
The Epoch of Fossil Fuel Exploitation
(after Hubbert, 1969)
Trillion kwh per year
300
200
100
-5
Stonehenge
Built
-4
-3
-1
-2
0
Mayan
culture
Steam
Parthenon
Engine
completed
Pyramids
Iron in
constructed
Black
Middle
Death
East
Inquisition
Magellan's
Circumnavigation
+1
+2
+3
+4
+5
Composition of U.S. Energy Use (Cleveland)
Low entropy matter & energy
K
Allocated to
the Rest of Nature
Time
Allocated to
Humans
Ecosystem Goods
vs.
Ecosystem Services
Knowledge
Certainty
Risk
Uncertainty
Ignorance
Allocation of scarce resources
toward alternative desirable ends
1.
2.
3.
What are the desirable ends?
What scarce resources are needed
to obtain those ends?
What ends get priority? (How do we
allocate?)
Driving Questions:
Desirable Ends:
1. Growth and the
Environment?
1. Sustainable Scale
2. Limits on income?
2. Just Distribution
3. Technology and
ingenuity?
3. Efficient Allocation
MB >= MC
1. Sustainable Scale
1. Sustainable Scale
1. Sustainable Scale
US
UK
Indices of ISEW
140
140
90
90
40
1940
40
1940
1960
1980
2000
German y
(Index of Sustainable
Economic Welfare)
1960
1980
2000
and GDP
(1970 = 100)
Austri a
Chile
240
140
140
90
90
40
1940
40
1940
1960
1980
2000
Netherland s
140
90
90
1960
1980
140
90
1960
1980
2000
Swede n
140
40
1940
190
2000
40
1940
1960
1980
2000
40
1940
1960
1980
2000
Energy per Capita vs. Happiness (worldvaluessurvey.org)
Is Qualitative Development Possible without US-style Energy Use?
(Source: UNDP, 2002, WRI, 2002)
2. Just Distribution
Population
20%
Global Income Distribution
Income
82.7%
20%
11.7%
20%
2.3%
20%
1.9%
20%
1.4%
Overconsumers
1.3 billion
> US$7,500 per capita
Sustainers
3.5 billion
US$700-7,500 per
capita
Excluded
1.3 billion
< US$700 per capita
Travel by car and air
Travel by bicycle and
public surface
transport
Travel by foot or
donkey
Eat high-fat, highcalorie, meat-based
diets
Eat healthy diets of
grains, vegetables &
some meat
Eat nutritionally
inadequate diets
Drink bottled water
and soft drinks
Drink clean water plus
some tea and coffee
Drink contaminated
water
Use throwaway
products & discard
substantial wastes
Use unpackaged
goods and recycled
wastes
Use local biomass and
produce negligible
wastes
Live in spacious,
climate-controlled, 1family homes
Live in modest,
vented, multiplefamily homes
Live in rudimentary
shelters or in the open
Maintain imageconscious wardrobes
Wear functional
clothing
Wear secondhand
clothing or scraps
NATURE|VOL 415 | 10 JANUARY 2002 |www.nature.com
3. Efficient Allocation
Households
Firms
Maximize
Utility
Maximize
Profit
P
G1
CS
PS
Q
G2
Supply Side
f (N, L, K; r)
What are the characteristics of resources
relevant to the allocation question?
Goods vs. Services (Flows vs. Funds)
 Substitutability
 Irreversibility
 Renewability
 Uncertainty
 Externality

Rivalness
 Excludability

Rival
Excludable
Non-Excludable
Market Goods
Open Access
~ Externalities ~
(tragedy of the commons)
Privatization
NonRival
Tragedy of the
Non-commons
Pure Public
Goods
Demand Side
Abandoning Homo Economicus
 Insights
from Game Theory
 Insights from Neuroeconomics
Functional MRI of Dopamine Activation
Cognitive Load Theory
Thinking Discount vs. Emotional Discount Rates
Expected vs. Unexpected Rewards
The discovery of energy in fossil fuels has
exponentially increased our ‘grab-bag’ of
unexpected returns
Rave clubs,
scuba diving,
NASCAR, etc
Riding a horse
Bread, butter
and ale
A long time ago
A visit from a cousin
1700
2006
Abandoning Homo Economicus
 Insights
from Game Theory
 Insights from Neuroeconomics
 Insights from Sociobiology
 Insights from Integrated Human and
Environment Histories
 Insights from our Evolutionary
Hangovers
Ecological Economics




Get the scale right through
science-informed democracy,
Get distribution right through
social processes that are fair,
Recognize who we are and
where we came from, and
then …
Make the economy our
servant, instead of our
master.