Functional Ecosystems as the Engine of the Green Economy

Functional Ecosystems as the Engine of the Green Economy

ConsumerismEconomicsSociety — by John D. Liu July 3, 2013

by John D. Liu

This is not how it works…

“If the world is a table with four legs (US, Eurozone, China/India, and the Arab world), right now, all four legs are shaky”, said Thomas Freidman, New York Times columnist after listening to discussions at the Davos World Economic Forum in January. Old capitalism, many exclaimed, is dead. What has led us to this crisis point?

Studying the Earth’s ecosystems is fascinating and can show us the way to sustainability if we are willing to act on the evidence before our eyes. When we consciously observe nature – the tides, atmosphere, movement of clouds, river systems, microbial communities, living soils, plants and animals – evolutionary logic is revealed. Nature is always adapting to changing conditions and seeking equilibrium. Everything has a purpose, nothing is lost, nothing is wasted, and nothing is extraneous. We know that the Earth’s naturally functioning ecosystems are the basis of life on Earth, providing air, water, soil fertility, raw materials and energy. It is also clear that the global economy does not recognise that the production and consumption of all goods and services depends entirely on the ongoing functionality of these ecosystems, and, as a result, fails to value it correctly. This is not surprising for a system that was founded on feudal privilege, military force, colonisation and slavery. While our stock market screens and bank accounts claim we have generated wealth, in reality, we have enriched a small minority of people while impoverishing a much larger majority of people on Earth, and destroyed ecological function over huge portions of the planet.

Now nature is warning us to stop and think.

We currently face numerous challenges, including human-induced climate change, biodiversity loss, large-scale deforestation, desertification, hunger, economic crisis, social instability, migration, armed conflict, political revolution and war. Commenting on this “litany of sins”, Lester R. Brown, founder of the Earth Policy Institute and author of Plan B 4.0, recently said, “We must go beyond lifestyle changes and change the system, or civilisation will end”. In the face of such urgency, many of the assumptions that our civilisation has grown up with are thrown into question. Even the founder of that bastion of capitalist thought, the Davos World Economic Forum, Professor Klaus Schwab, recently declared: “Capitalism, in its current form, no longer fits the world around us”.

From the study of natural ecosystems comes an economic answer that goes to the fundamental question of ‘what is wealth?’. Although everything that is produced and consumed comes from the bounty of the Earth, according to current economic thinking, the value of ecological function is zero. We now calculate the economy and money as the sum total of production and consumption of goods and services. By valuing products and services without recognising the ecological function from which they are derived, we have created a perverse incentive to degrade the Earth’s ecosystems.Carbon trading schemes barely scratch the surface of appropriately valuing nature. They continue to suggest that money is derived from production and consumption but offer a small proportion of that money to provide incentives for slightly less polluting behaviour. The Economics of Ecosystems and Biodiversity (TEEB) is more comprehensive and tries to put prices on the various services provided by nature, but it too falls short of the ideal by incorporating the assumption that money in its present form is the starting point. We have collectively become Oscar Wilde’s cynic and ‘know the price of everything and the value of nothing’. We need to go much further.

In order to survive and become sustainable we need to devise a system where instead of personal gain, the intention of all human effort is aligned with nature. Where is it set in stone that human work must be self-serving? Aren’t the great achievements that humans have made based on our ability to work together? In fact there have already been two Nobel Prizes (John Nash and Elinor Ostrom) awarded for recognising that if an individual pursues their own interest to the point where it damages the collective interest, it is no longer in their own interest. This means that the interest of individuals and the interests of humanity can be seen to be the same. Shouldn’t we be basing our society, economy and civilisation on the highest possible understanding and principles?

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