How should economists think about biodiversity?
economist.com
economist.com
The (600 page) report, including 100 page abriged version that appears highly readable at a glance: https://www.gov.uk/government/publications/final-report-the-...
It’s a shame this is getting posted in the middle of the night for much of the western world. IMO this is one of the most crucial things our society must address currently. The inability to properly value natural capitol is a root cause of so many problems. If this report gives a framework for (among other things) properly assessing negative externalities than we can’t afford to ignore it.
The stark fact is that economic growth as we know it today will come to an end at some point on a finite planet like ours. For those who want an extremely meticulous and data driven analysis of the same I recommend reading Vaclav Smils work. I’m just sharing what I learned.
There are many websites that calculate your “earth footprint”. Ie how many earths are needed if everyone lived the same as you. My earth footprint was 4 earths ! All 8 billion of us cannot live like Americans or even Europeans. And then there is climate change. There’s no known cheap energy substitutes on the horizon. Tesla’s are for now completely coal powered. The amount hydro carbons consumed is still increasing every year. For things like making steel, fertilizer or cement we cannot even begin to design good scalable solar powered methods. Solar plants have a very low load factor. It often only generates 30 % of its installed capacity. So you need to over build by 3x of what you need. Assuming we also need solar power for cars we are talking about building 10x the capacity of all existing energy infrastructure and not to talk about storage.
The existing energy grid is crumbling in many places and we are talking about trillions of dollars in spending to build new high voltage DC transmission to make solar scalable.
The world population will be 10-12 billion by 2100. Its hard to imagine how everyone will have a first world lifestyle without completely trashing the planet.
What kind of metric even is that? What does it even mean, Google doesn't say anything.
When I clicked on "How do you feel" about my Earth footprint, it presents me only with the choices: Shocked, Inspired, Helpless, Intrigued, Worried, Embarrassed and Confused. Nice propaganda, but I feel okay about myself. If this is in any way accurate and what I'm doing is too much for the climate to handle then I officially don't care about the climate. I'm not going to just roll over and die for the greater good, sorry.
As a bonus, I throw in a recently fired MA official, saying that most emissions come from residential heating and they need to "break our will" for doing that: https://www.youtube.com/watch?v=muxVGmgykA4
If your lifestyle needs 2 earths that point will be hit for the whole earth pretty soon.
Wars are the most likely outcome. The first world will have to maintain their living standards by force and keep out the climate refugees.
> Wars are the most likely outcome.
Yes, that should go without saying. Not cooperation, but endless wars between nations over scarce resources. Or being subjegated by the world elites and basically soviet style communism. Millions starved to death, because one commissar decided that one particular country eats too much and it's bad for the climate. Assuming any of this is true, which I'm told it is.
I went back and adjusted the responses to get 1 earth level, and the result is ridiculous. There’s zero chance we’ll convince 7+ billion people to be zero-waste vegans who live crammed into a tiny apartment and essentially never travel anywhere. And I don’t think we need to! Even assuming their math is correct (of which I’m highly suspect), why should we accept that the solution is to roll over and die (as you nicely put it) rather than improve agricultural methods, energy generation efficiency and sustainability, transportation efficiency, policies that fail to discourage inefficiency, etc, etc, etc. It’s such a thoughtless and uninspired (and uninspiring) take.
edit: ok, after poking around a bit more it seems their proposed solutions are more inline with common sense than it appeared initially. But wow what a terrible way to communicate and inspire people.
The global annual population growth rate is plummeting. Many countries are well below replacement rates for fertility. While poorer countries lag behind, the world's population is going to peak then decline.
> The stark fact is that economic growth as we know it today will come to an end at some point on a finite planet like ours.
Maybe, but that is a long long way off. Economic growth comes not just from resource extraction, but making greater use of resources than we did before. A raspberry pi zero costs a few dollars and is made with grams of plastic, sand and copper. Only 50 years ago a multi room sized company using tons of metal, requiring a huge amount of energy to run, would have been less powerful.
This does not mean we won't damage the earth. What is means is we need to try harder not to do so.
You can make your car more fuel efficient but there cannot be a car that doesn’t use fuel. There are physical limits to efficiency and how much work can be extracted. Efficient isn’t infinite.
We need to scale current high living standards 10x from 1.5 billion to 10 billion while having no discernible impact on the biosphere.
Already 70 % of ice free land is shaped by humans for crops or grazing.
Inspite of all this a billion people still living in crippling poverty often going hungry.
The scale of the problem is seriously under estimated.
This is a bit of a no true scotsman argument. Everything is improving. Look at the past 100 years.
Agricultural output has been skyrocketing. Transport of people are cargo has become vastly more efficient, cheaper and safer. Healthcare is barley recognisable today than it did 100 years ago. Look at solar compared to 20 years ago. And while you discount IT, it has had a huge improvement on every single industry.
It doesn’t take much energy to extract this energy. In the case of solar or nuclear it takes a lot more energy to extract it safely and at scale.
You can read about the EROEI of shale, solar etc vs oil. We have fought against it using efficiency but efficiency too has limits.
If we didn’t discover oil / coal none of these changes you mentioned would have happened.
That there will be constant continuous and infinite improvement on a finite planet is far from clear. We can decline, or even go into stagnation for centuries until some major breakthrough.
There was a time when progress was so quick that people assumed flying cars were around the corner and we would all be living in space like the Jetsons. Again energy costs come into play.
> This is a bit of a no true scotsman argument. Everything is improving. Look at the past 100 years.
No, it isn't. Computational efficiency has improved by more than 10 orders of magnitude since its inception (arbitrarily taken to be the early 1950s).
Agricultural output: less than 1 OM. Transport efficiency: less than 3 OM. Healthcare: less than 1 OM. Solar (presumed PV; compared to electricity production from fossil fuels): less than 1 OM.
Industrial gains from IT: the growth economist Robert Solow famously quipped "you can see computers everywhere except in the productivity statistics". That was a few decades ago, but we are still well short of 1 OM improvement.
None of your examples comes within 8 orders of magnitude of the rate of improvement of computing efficiency since the 1950s. The comparison stands.
Ride-sharing, house-sharing, computerized car-navigation, self-driving cars, online banking, online shopping, Wikipedia, online directories of product/service providers, etc are all existing or emerging technologies that didn't exist 30 years and massively increase how effectively people can collectively utilize existing resources.
There’s plenty of fresh water too it’s just a logistics problem of transporting it from Siberia to all over the earth. It’s simply not feasible.
Energy is not cheap enough to transport food to everywhere it’s needed while also not taking enough away from anyone else by force.
That means we need to live in much more efficient denser setups with mass transport to reduce logistics costs in general. It also means some redistribution of energy and hence wealth.
No, it's a political problem. Much harder to solve.
assume there's no environment. ok, so human life can no longer be supported on earth. So there's no one to trade with to exchange money for useful goods and services like oxygen and radiation shielding. The value of money is obviously zero in the limit where the environment no longer exists.
Can the analogy be adapted to measure the lifecycle cost of running an ISS terms of physical resources. E.g. what's the minimum size that a self sufficient earth bound country would have to be in order to throw off enough surplus labour and resources to launch and maintain an artificial ISS habitat for 6 people? Would a hypothetical self sufficient New Zealand with 5 million people suffice?
Here's an attempt:
Apparently ISS cost $100b over 10 years. Call it $10b / year. World GDP is around $90t / year. So ISS costs 1/9000th of world GDP. Under extreme conditions, a human nation can direct maybe 1/3 of national GDP to external government projects (e.g. WW2 total war scenario). So maybe we could have a society of 3 * 1/9000 = 1/3000 of world GDP that could sustain itself and an artificial ISS ecosystem for 6 people.
1/3000 of earth human population is about 2.5 million people say.
So a healthy resource rich earth environment + labour of country of 2.5 million people under total war rationing conditions could sustain artificial ISS environment able to support 6 people.
Still, that gives some relief to the absurd notion that drives all economics that only human labour and capital have value, and that resources are infinite and free. Then, that "rational" economic considerations should drive our policies (instead of common, democratic deliberation around our competing wants and wishes, impossible to subsume into any sort of rational calculation).
Should we want to consume as much as possible as fast as we can, then disappear from the face of a scorched Earth? Or should we change radically our ways to make human life sustainable on the long term? This isn't a matter of reason, only of collective preference, that can only be decided through debate. The only thing open to calculation is what the future will be, if we do this, or that. But what future we want isn't a rational matter, and shouldn't be dictated by "those in the know", or even worse, "those in power" (irk).
We can't survive without other life on earth, and life on earth dies without enough biodiversity.
What is "enough" though? 30%, 50%, 90%? And how much are we willing to spend to hit each of those targets. We're obviously not going to spend "infinite" economic resources to protect biodiversity and we've long since accepted that we are willing to sacrifice a bit of 'nature' for a bit of 'comfort' and that won't change. We're now negotiating how much we are willing to give up to save how much of nature, and that is, demonstrably, a very difficult problem.
Your framing takes acquiring economic resources (a.k.a. the destruction of natural resources) for granted, assuming that we're losing, or giving up, something by opting to not destroy some portion of the natural environment for economic gain. Aren't we losing, or giving up, something every time we choose to gain economic resources by destroying part of the natural environment?
Logically, both framings are valid, but they don't appear wholly equivalent to me. Perhaps I'm missing something, but economic resources seem far more fungible than natural resources, which seems to imply that the latter framing may be more appropriate.
This difference, highlighted here, in this essentially ephemeral internet-space, may seem to occupy the border between semantic and pedantic, but I think it will take on a fundamental role in determining humanity's future prospects. How we define our relationship to the earth determines how we live. Your framing of the economic/environmental calculus seems to represent the status quo, but I don't think it represents a sustainable future for humanity. If/how/when the status quo shifts, I have no idea, but it does seem (from my limited vantage point, anyway) that more and more people are developing sympathy for the notion that modern society doesn't optimize for human well-being.
https://users.wfu.edu/palmitar/Law&Valuation/Papers/1999/Leg...
https://www.npr.org/transcripts/835571843?t=1614155200666 is a pretty good walk-through at how to arrive at a number
Otherwise the required remediations are whimsical and the justice delivered at best a sham. Typically, the sum requested as is currently often the case for oil spills, are far inferior to the actual remediation cost.
Finally, as other comments mention, it would also be good to know when the cost would be infinite or near infinite, to have a clear understanding of our limits and in those cases privilege using a criminal justice framework over a civil one.
Yours sincerely, someone who works adjacent to those in the environment space.
How big is the negative externality relative to other things we care about? Pigovian tax or another regulation? How much tax to disincentive the negative externality without killing industry? Where exactly should that tax be applied in the vertical chain? How do we do it with minimal bureaucratic overhead? How do we do it in a way that can be enforced and isn't open to abuse?
These are questions that the specific domain expert (e.g ecologist) isn't equipped to answer, although they should be heavily consulted with.
Economists aren't a monolith. As the other poster in this thread mentioned, there's such a discipline called ecological economics.
Besides, even if all of them do have a terrible understanding of ecology and the importance of biodiversity, that's the reason we need a multi-disciplinary team to tackle the issue. Ecologists by themselves won't know how to align incentives or create practical policies, and economists without ecologists will be lost.
Would climatologists be able to design an effective emissions trading scheme by themselves without working with an economist/policymaker?
In my opinion, when it comes to ecological concerns, effectively aligning private incentives with the public good is a question for ecological economists * , not just (plain old) economists or ecologists. Ecological economists, though fewer in number and typically relegated to more liminal realms of the field than mainstream economists, utilize a relatively more wholistic approach that carries with it a different set of limitations. If humanity is going to successfully address the monstrous environmental challenges it faces in the 21st century, I suspect it will be accomplished by asking different questions than those (mainstream) environmental economists are prepared to answer.
* as well as other scientists and social scientists (e.g. environmental sociologists)
Exactly. Economists are impulsive and bend to the whim of fashion far too much, they will make up theories to suit their agenda and justify it with arcane sounding jargon, which is clear to see every time they speak. When you can actually read through the BS the IMF, Federal Reserve and ECB and all other central banks are nothing more than crooks with better tailors then your average thief.
When you understand how things like derivatives like CDO, MBS or (re)Hypothecation work and how they create massive risks in the financial system (2008) you soon realize this is the biggest con in Human History.
And that the IMF and World bank have so much more influence than perhaps the UN or G20 combined. And ALL OF THEM are guilty of of crimes against Humanity.
No, the World needs to realize this cohort has vested interests in keeping the World as it is is, which protects them and their class and often lends itself to depraved things that rely on Human exploitation, slave labour in the developing World, environmental disasters for resource/mineral extraction which lends itself to human trafficking and sex trafficking of minors for all to see: Jeffery Epstein was just the most high profile case.
Those Qanon imbeciles were filled with too much of Trump's BS tasting kool-aid to realize he was Jeffery Epstein's close friend who was tried and convicted for being a sex offender of children, and that Trump was implicated in that trial of molesting young children as he was part of their class.
The fact that most people still honestly think these people have any merit, let alone would be put in a compromising position to exposing them to crimes like that let alone ecocide, is the real problem.
No, the World has to move on from this suicidal fiat based ponzi scheme we call 'the traditional' fiat based economy, and it's priests (economists) in reality this what bitcoiners like me really want the most: for average people to lose complete confidence in the monetary system that keeps Humanity from flourishing with boom and bust models that entrench thier wealth more deeply with every passing crisis and makes reform entirely impossible since it's so entrenched, and would sooner destroy the World, itself and everyone within in before it reformed itself. Most don't even realize how much more sustainable our network and system is and actively seeks and creates renewable energy sources that would otherwise be impossible due to 'economists' opinion on value creation. We create auxiliary systems and wealth creation with out excess energy (gardens or plant nurseries are the most common), whereas the fiat system will burn off it's excess gasses in plain sight and then send countries to war based on this tired notion that securing oil makes us 'safe' and charges 4+ gallon in the US when oil in ~$60/barrel, it's so absurd...
Being an environmental activist for nearly 20 years, with a background in reformative and sustainable Ag (biodynamic), and a biology degree and nearly 10 years in fintech I can say with absolute confidence NO ONE should be able to make these violations on our environment justifiable: economists, politicians, Nation-State or otherwise. And these environmental violations (Ecocide) should come with at least lengthy prison time or penalty of death, not fines that simply add up to a cost of doing business which they never pay taxes on.
I wish public outrage and cancel culture seen on social media for the most feckless and pointless of things would be directed for environmental causes, because if they only understood the calamity and chaos the ensues by poisoning our ecosystems and how it can have domino effects in precipitating mass extinction events (like we're currently experiencing) they would stop with this BS pro-noun and divisive hateful SJW tirades and mob mentality and put their energy into an actual cause with meaning that may give them purpose in life: something I'm certain every single one of the lack.
If you're going to put a dollar cost on irreversibly damaging the ecosystem, it's going to be one you can't afford. Not in a thousand years.
Doesn't work. You're essentially saying to assign the value of infinity. Then if there is a one in a trillion chance of ecosystem damage, you have to refuse even if the alternate is to definitely lose a billion lives. Can't be infinity.
At this point you're at the old joke. Man asks a woman if she would have sex with him for a hundred billion dollars. She thinks about it a while and then concedes that yes, she would. The man then asks the woman if she would have sex with him for five dollars. She's offended. She says, what kind of woman do you think I am? The man replies that they've already established that and now they're just negotiating on the price.
You can't just use an astronomical number. It has to be as accurate as possible because it's being traded off against other real things of significant importance. If the number is too low, bad things happen. But if the number is too high, different bad things happen.
"Astronomical" is the cost of putting ecosystems on an irreversible, downward spiral.
Your question is like asking "How hard do I need to hit with the hammer on this puzzle to have the pieces fall in place?"
If we measure out the cost of avoiding total environmental collapse - which also implies human extinction - and we put a finite number on it, we've said 'the survival of human life on earth is worth this much and not more'.
It's really hard for me to get my head around the idea that we would find a dollar value that has any meaning that would properly describe the limit of how much humans value their own survival. I wouldn't know where to start, what to measure, or what to exclude. I'd personally be loath to excluding anything, as a fan of existence.
I'm not convinced I'm right to think putting a dollar value on existence is folly -- but I can't conceptualize what it would mean.
to win a game you have to play that game.
Species went extinct before money was invented.
Well, if the entire ecosystem collapses humanity is guaranteed to die - unless we figure out how to eat acid and breathe toxic air. That's 7-8 billion lives.
With that happening, "pricing" things will also have to account for whether the actions will lead to some sort of ecosystems lasting longer. The really long term will do amazing things with compounding...
Is there such a thing as a change that can't be reversed in a thousand year ? Just think of a scenario in which we stop consuming carbon and plastic overnight for a thousand year.
By the way, the way economists think has been deeply influenced by John Von Neumanm who has also had a deep influence on computer science (assuming that's your thing) so you may find some interesting overlap.
https://www.penguin.co.uk/books/306/306792/licence-to-be-bad...