Design Insights for the Natural Capital Debate

Dr. Joanna Boehnert

EcoLabs UK

July 2015

Contents

1. EcoLabs + design theory

2. the design and the etymology of:

a. natural capital

b. ecosystem services

4. economic approaches to the environment

5. problems with natural capital

a. philosophical

b. methodological

c. political

6. strategies

7. conclusion

THE STEADY STATE ECONOMYA Totem of Real Happiness

© 2009 A

ngela Morelli for ECO

-LABS.org | Source: Life in a land w

ithout growth N

ews Scientist M

agazine Issue 2678

THE STEADY STATE ECONOMYA Totem of Real Happiness

© 2009 A

ngela Morelli for ECO

-LABS.org | Source: Life in a land w

ithout growth N

ews Scientist M

agazine Issue 2678

THE STEADY STATE ECONOMYA Totem of Real Happiness

© 2009 A

ngela Morelli for ECO

-LABS.org | Source: Life in a land w

ithout growth N

ews Scientist M

agazine Issue 2678

Cheap energy made industrial development possible. One barrel of crude oil contains, in energy terms, the equivalent to the heavy manual labour of 12 people working for one year. As easily accessible fossil fuel supplies diminish, the era of cheap energy is ending. One way to understand the consequences of energy scarcity is by measuring EROI, i.e. ‘Energy Return On Investment’. In the 1900s EROI was between 100:1 – 50:1. Energy from renewables and unconventional fossil fuels have much lower EROIs; for example the Tar Sands have a EROI of as little as only 3:1. An integrated audit of development that includes energy issues indicates that the current model of development has created dangerous vulnerabilities in its reliance on fossil fuel.

159Lt

One barrel of crude oil, containing 159 litres, is equivalent to the heavy manual labour of 12 people for one year.

VS4 million wind turbines could replace fossil fuels usage globally - 20 million cars are produced every year so it is technically possible.

Global fossil fuels subsidies amounted to $523 billion in 2011, up almost 30% on 2010 - this is six times more than subsidies to renewables, and up 30% from 2010.

THE BALANCE SHEET FOR GROSS GLOBAL PROSPERITY

Energy Return on Energy Investment EROI in the 1900s = 100:1 – 50:1EROI in the tarsands = 5:1 – 3:1EROI estimated to be necessary for ‘civilisation’ to sustain itself = 5:1All expansionary phases of the US economy occurred during times of low energy prices.

*

Energy use (kg of oil equivalent per capita)World = 1851USA = 7069EU = 3412Low Income countries = 363Percentage of total energy consumption that is based on fossil fuels  World = 80% USA = 83% EU = 75%Low income countries = 29%

JZ1122

The Earth’s ability to provide an accommodating environment is undermined by our activities. The Earth is our life-supporting system. Despite this basic fact, measured in biophysical terms, the planet is shrinking due to human interventions. Over the past forty years the Living Planet Index (an indicator of the state of biodiversity) has fallen by 30% in northern countries and fallen by 60% in the tropics. During this time there has been a doubling of demands on natural systems. Assessing the capacity of the ecological system to continue to provide favorable conditions for civilization must be part of an audit of development.

Ecological systems have thresholds that can lead to sudden collapse. Nine planetary boundaries are central to avoid crossing critical tipping points. Three boundaries have already been transgressed: climate change, the rate of biodiversity loss and the global nitrogen cycle.The Anthropocene is a new geological age

2/3 ecosystems are exploited beyond their capacity

BIODIVERSITY LOSSNITROGEN FLOWPHOSPHORUS FLOWCLIMATE CHANGEOZONE DEPLETIONATMOSPHERIC AEROSOL LOADOCEAN ACIDITYFRESHWATER CONSUMPTIONCHEMICAL POLLUTIONAGRICULTURAL LAND USE

PLANETARY BOUNDARIES

Biodiversity has been fallen by a rate of 30% in northern countries and 60% in the tropical world over the past 40 years.

97-98% of scientists agree climate change is caused by humankind

THE BALANCE SHEET FOR GROSS GLOBAL PROSPERITY

characterized by dynamics where our industrial patterns are a force dramatically effecting natural, biophysical and geological processes. The Earth is the foundation for substance, but an ecological audit indicates that the model of development is now so dysfunctional that human survival is at stake.

JZ1122

Introduction

A green economy (according to the UNEP) is one that results in: “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities”.

More simply, “a green economy is low-carbon, resource efficient, and socially inclusive”.

UNEP 2011

This sounds great! Are we finally going to see green economic policies put into practice?

Civil society responded to the ‘Green Economy’ proposals at Rio+20 with a plethora of critical responses:

• condemning what they claimed amounted to the corporate capture of the United Nations (Joint Civil Society Statement, 2012)

• condemning the UN’s ‘Natural Capital Declaration’ (Banktrack, 2012)

• condemning 20 years of Greenwash (Bruno, 2012)

• condemning the entire ‘green economy’ project (Nadal, 2012; Brand, 2012; Patel and Crook, 2012).

• The Indigenous People’s Global Conference on Rio+20 and Mother Earth issued a strongly worded ‘Kari-Oca 2 Declaration’ declaring the UNEP’s green economy as ‘a continuation of colonialism’ firmly reject-ing market-based solutions, REDD and intellectual property rights over genetic resources and traditional knowledge.

The project relies on two core concepts:

1) ‘natural capital’

2) ‘ecosystem services’

£1.8 bill ion

Natural Capital

The metaphor of ‘natural capital’ was first used by E.F. Schumacher in Small Is Beautiful (1973).

In the 1990s the World Business Council for Sustainable Development transformed the idea:

“...addressing the challenge of achieving global sustainability, we must apply the basic principles of business. This means running “Earth Incorporated” with a depreciation, amortization and maintenance account” Maurice Strong, WBCSD, 1994

Ecosystem Service

While the concept of an ‘ecosystem’ was first used in 1935 by Arthur Tansley.

The theory of ‘ecosystem services’ was not formalised until the publication of the United Nations 2005 Millennium Ecosystem Assessment.

Ecosystem Service

While the idea can be a useful learning tool, its reduction of ecology into services that are helpful to humans instrumentalises ecological relations.

This becomes a problem especially when ecosystem services are used as a component of market processes – as opposed to the context in which markets are enabled to exist.

Ecosystem Service

Larry Lohmann:

...with all ecosystem services markets, the first step [is] to simplify and quantify the ecological functions in question, so that standardized increments of “environmental improvement” could be traded for standardized bits of “environmental destruction”. 2011

e

cosy

stem

serv

ice m

arketsnature

naturalcapital

ecology

conceptions of human-natural

relations

economics ecosystem

science

ecosystem services

capitalism

In naming its programme the ‘green economy’ the UNEP implies a reframing of the entire economy along green lines. This will be done in ways that reflect specific policy prescriptions of environmental economics and ecological economics.

Since green economics is a field with radically different policy prescriptions to what is proposed, the naming of the new project creates severe confusion with contested definitions of the ‘green economy’.

The ‘green economy’ is not ‘green economics’?!

neo-classical / neo-liberal

environmental ecological green economics

eco-socialist

assumptionsvalue-neutral + composed of universal, unchanging laws

bringing the environment into economic theory

committed to steady state economics

local, social, political and qualitative

the market will always attempt to exploit the environment

attitude towards planet

a source of scarce resources for the economy

a source for scarce resources and a sink for pollution

the system in which the economy isembeddedas a subsystem

the context of human existance

the context of human existance

sees the environmental crisis as...

inconsequential concern oran opportunity

a result of market failure

a result of regulatory failure

a result of the dismal / denial of nature

a result of capitalism

principle concept efficiency of markets

scarcity + efficiency of markets

precautionary stance

quality commodity

policy impulse market market regulation / market

participatory politics

participatory politics

Economic Approaches to the Environment

Problems

1. Philosophical

2. Methodological

3. Political

1) Philosophical Problems

ecologicalsystem

Conceptions of human-natural relations: A hierarchy of systems

economicsystem

socialsystem

A. ecological supports

supports

A is the context for B and C.

A existed before and will exist after both B and C.

B and C must regulate their activities according to A’s dynamics, not vice versa.

is dependent on A & B

B. social

C. economic C

B

A

2) Methodological Problems

£280£280£260£220

Econopoly

Fig Treessparrows StarfishCanadian

Beaver

Ecology GAmes 2012

Here the global gross domestic product (GGDP) is illustrated as $63,000bn and the value provided by the Earth to the global economy is $50,800bn.

Costing the Earth by Information is Beautiful Studio (2011). London: The Prince’s Accounting for Sustainability.

3) Political Problems

£280£280£260£220

Econopoly

Fig Treessparrows StarfishCanadian

Beaver

Ecology GAmes 2012

Discursive confusion

!?

Conclusion

To press non-economic values into the framework of the economic Cal-culus… it is a procedure by which the higher is reduced to the level of the lower and the priceless is given a price. It can therefore never serve to clarify the situation and lead to an enlightened decision. All it can do is lead to self-deception or the deception of others; for to undertake to measure the immeasurable is absurd and constitutes but an elaborate method of moving from preconceived notions to foregone conclusions…The logical absurdity, however, is not the greatest fault of the undertak-ing: what is worse, and destructive of civilisation, is the pretence that everything has a price or, in other words, that money is the highest of all values.

E.F. Schumacher 1973, p. 27

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