Environmental Concerns

The emergence of environmental problems has been a primary motivation behind the growing interest in reviewing our measure of well-being.

For tens of thousands of years human communities grew without noticeably affecting anything but small portions of the world around them. Our economic system evolved, we thought, separate from the natural world. Today our impact affects practically everything on Earth. We can no longer act as though what we do is separate from the planet as a whole.

Pollution and Resource Depletion

Economics is 3/5ths of Ecology

The entire range of human economic activity can be divided into three basic steps: Materials, Processing and Distribution.

1) Assembly of materials:

Locating or gathering raw materials like soil and seed, metallic rocks, and energy; or information and images.

2) Processing the assembled materials:

Planting, cultivation and harvesting; extracting metal from the ore and forming it into useful items; or organizing the information into a coherent, useful or entertaining format.

3) Distribution of the end product:

Getting the produce grown, the goods manufactured, or the report, film or whatever has been produced, to people and places where they can be used and appreciated.

In a well developed economy, the raw material for one economic activity is often the product of one or several other activities. However, the three steps form the foundation for all economic activity.

In the economy of nature, these same three steps are followed. Plants and animals gather nutrients, process (digest) them into useful forms and distribute them to organs and limbs for use in their growth and activity. Sometimes, creatures even gather materials and form them into "artifacts" for specific purposes, such as nests and honeycombs.

In the economy of nature, these steps of assembling materials, processing and distribution are accompanied by two further considerations: the natural resource base, and waste. In human economics, these concerns have seldom been accounted for. In the study of ecology, however, the limitations these impose are often observed and sometimes explained as the "law of the minimum" and the "law of tolerance":

The law of the minimum states that growth will continue drawing on available materials as needed until one of those materials is exhausted. The first material to be used up is the limiting factor. Soil degradation, loss of genetic diversity, and the depletion of fossil fuels, forests, fish stocks and other resources, are examples of the problems which arise when this 'law' is overlooked.

The law of tolerance deals with the ability of different organisms to tolerate changes in their living conditions. Changes in climatic conditions or the chemical composition of their surroundings can lead to intolerable-and therefore limiting-situations, as can the arrival of a competing organism or a new predator. Among the concerns associated with the limits of tolerance are: climate change, ozone depletion, pollution of soil, water and air, the loss of natural habitat, pesticides and garbage.

If Mother Nature were to present invoices for resources extracted and wastes absorbed, conventional economic accounting would be able to keep human activities in balance with the rest of the natural world. Unfortunately, the only notice nature gives on outstanding accounts is foreclosure. Species in the habit of overstepping ecological bounds simply disappear. To avoid this drastic result, we can extend our own accounting systems to include considerations of waste and resource supplies. Consistent recognition of these bounds through accounting requirements would put all businesses in the same boat. The competitive edge would fall to those who could find ways of producing their goods and services with minimal pollution or resources depletion. This would contribute far more to our overall well-being than the present situation where the competitive advantage often goes to those who take the least responsibility for waste and pollution.

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The Valuation of Garbage

We produce an enormous amount of garbage. For years we just buried it and pretended it was gone, but the side effects have made landfill sites unpopular with nearby residents. Truck traffic, litter, and ground water contamination coupled with new safety requirements make acceptable locations hard to find and expensive to set up. Disposal fees exceed $100 a ton in many locations.

This price has played an important role in stimulating waste diversion activities. Recycling and composting programs have costs associated with them. However, since a ton of waste now carries a $100 price tag, that much money can be used to direct waste away from landfill. Even if it costs a full $100 to divert a ton of waste, the community is better off because the landfill site's life expectancy is extended. If it costs less than $100, money is actually saved.

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Full Cost Accounting and Product Stewardship are two ways of instituting responsibility for waste and natural resources.

Full Cost Accounting assigns prices to resource supplies, pollution, and social problems. These prices would be activated as fees or taxes on problematic activities. Assigning prices to problems asserts values in a language that enterprise understands. The fees and taxes would raise money for correcting related problems and the now visible expense would be a financial incentive not to cause the problems in the first place.

Product Stewardship places responsibility for products with the manufacturer. When a consumer is finished with something he/she has paid for, the manufacturer is required to take it back and make sure it is disposed of properly. Such a requirement encourages producers to consider the repair and recycling of their products at the design stage. In this way the eventual waste problem can be minimized before the product is made.

Biodiversity

The web of life is intricate and mutually supporting. Its resilience decreases with each lifeform lost. If we maintain patterns of development which regularly destroy or significantly diminish the presence of other forms of life, we progressively undermine our own existence as a part of the global ecosystem. With the loss of species we also lose genetic possibilities for fighting disease in people and in food crops, as well as potential new sources of food. In addition to the dangers and loss to humans, there are reasons to believe that other living things have their own rights to existence.

Every day, the expansion of human activity is transforming parts of the Earth. As we claim territory, other species have to find other places to live. When they cannot, they perish. Taking land for agriculture, stripping it of trees for lumber and paper, and expanding urban development drive native species away.

Furthermore, in the process of our lives, we release a wide variety of substances into the environment. Some are harmless. Others change the nature of the soil, water and air in ways that render them uninhabitable.

Due to our continuous and rapid expansion, the rate of species loss is alarming. The United Nations Convention on Biological Diversity is the result of these concerns coming before the world community. The Convention encourages all nations to conserve biodiversity and use biological resources in a sustainable manner through education, taxes and incentives.

No doubt, the rate of species loss can be slowed by these measures but unless the objectives include maximum limits beyond which human dominance will not expand, it will be a losing battle. Already the human family uses 40% of all the products of land-based photosynthesis and we consume so much from the oceans that every natural fishery on Earth is in decline. While some economic expansions can take place without increasing our planetary impact, they are presently exceptions to the rule. Perpetual expansion will inevitably extinguish other lifeforms and threaten our long-term well-being.