A New Universally Acceptable, Ecologically Conscious, Sustainable,
By Colleen Slebzak
Problems With The Current Economic System Set In Place
Locally, Nationally, and Globally
To become sustainable, local, national, and global economies need to make some changes. I feel as if mainstream economics and economists fail to see the connection between a true sustainable economic system and a healthy ecosystem. I feel as if a re-design of all economic systems are in order, as the ones that are used currently today are outdated- based on a time when there was an abundant amount of natural resources, smaller populations, and less consumption (this time was not that long ago, just before the industrial revolution in the 1950’s). Economists should embody certain principals and solutions when re-designing the system…
Principals to Embody When Re-Designing The System
In The Sustainable Business Blog, (in “The Guardian“ online news cast/Blog), the author highlights five critical changes that should be made to economies around the world in the 21st century. These changes should be universally implemented in, not only local economies, but national economies as well, as they concern the world as a whole. The five changes are:
Regenerate natural carbon sinks; “as one example, the holistic management of the world’s vast grasslands- the second largest carbon sink after the oceans… must be scaled up to regenerate the world’s 5bn hectors of grasslands from gradual, carbon releasing desertification and the catastrophic human consequence of this which include famine and war.”
Learn from nature; “we need to re-imagine products and services, business models, supply chains-indeed entire local and regional economies-and the global economic system, using nature’s holistic design principles that we know lead to resiliency.”
Economy of sufficiency; “we need an economy of sufficiency that does not demand exponential growth of material output from finite resources on a planet that is fixed in scale. Our emerging recognition of boundaries has already begun to stimulate a creative response like never before in the history of humanity.” Our resources are fixed, and the human economy must operate with limits and boundaries.
The re-examination of the finance sector; “finance in particular is in for a period of fundamental re-examination that will reveal its confusion of means and ends. On a finite planet under stress, the goal of compounding financial returns on a now massive stock of financial capital is a design principle that is deeply flawed.” A system based on limited resources is hardly sustainable.
Capitalism must mature; “after more than two centuries of childhood and adolescence, capitalism in the developed world must now mature. Such maturity will entail connecting the dots between the need to bend the exponential curves of physical growth- from carbon emissions, to resource use, to population itself- all the way to the exponential abstract growth derived from compound interest itself. When Einstein said that compound interest is the most powerful force in the universe, he was apparently both joking and serious.”
-The Sustainable Business Blog
I will elaborate on the latter 3 in this Blog.
The 5 critical changes highlighted in The Sustainable Business Blog, I consider to be principles economists should apply/or at least consider (universally-in all economies), when re-designing their new economic system.
In Building a Sustainable and Desirable Economy-in-Society-in-Nature, the authors echo the aforementioned concepts; by stating, “balancing and investing in all the dimensions of our wealth to achieve sustainable well-being requires that:
We live within planetary boundaries-within the capacity of our finite planet to provide the resources needed for this and future generations; (vi)
That these resources are distributed fairly within this generation, between generations, and between humans and other species; and that (vi)
We use these finite resources as efficiently as possible to produce sustainable human well-being, recognizing its dependence on the well-being of the rest of nature. (vi).
-Building a Sustainable and Desirable Economy-in-Society-in-Nature
The authors went on to say, “we have never had a greater global capacity, understanding, material abundance, and opportunities to achieve these objectives [as we do today]. This includes scientific knowledge, communications, technology, resources, productive potential, and the ability to feed everyone on earth” (vi). The world is now more aware then ever, that our natural resources are limited. The world also has the capacity now more then ever, to change this pattern, and aim the new economy (universally designed towards sustainability and the ecosystem), in the right direction.
The authors also said; “to make a transition to a just and sustainable world will require:
A change in worldview is in order; “a fundamental change of worldview to one that recognizes that we live on a finite planet and sustainable, well-being requires far more than material consumption;” (vii);
“Replacing the present goal of limitless growth with goals of material sufficiency, equitable distribution, and sustainable human well-being; and” (vii);
“A complete redesign of the world economy that preserves natural systems essential to life and well-being and balances natural, social, human, and built assets” (vii).
-Building a Sustainable and Desirable Economy-in-Society-in-Nature
I too, echo the views of the aforementioned concepts. We need to respect ecological limits, by re-examining renewable resource stocks, redirecting technology towards a sustainable solutions, and aim to stabilize the population (-I could highlight many more concepts that coincide with the aforementioned; however, due to time constraints I will refrain).
Possible Solutions: con’t.
To build a more efficient economy, we need to form an adaptive management policy. In Building a Sustainable and Desirable Economy-in-Society-in-Nature, the authors raised valid points as to building a more sustainable economy- points/concepts that all economies could apply.
The authors listed a set of principles that when put together, formed an “invisible collection of basic guidelines governing the use of common natural and social capital assets“ (30). 6 principles were highlighted and they are as follows:
Responsibility. “Access to common asset resources carries attendant responsibilities to use them in an ecologically sustainable, economically efficient, and socially fair manner. Individual and corporate responsibilities and incentives should be aligned with each other and with broad social and ecological goals” (30). Incentives for eco-friendly practices, and strict penalties for violators (bankruptcy/forfeiting authority), should be mandated.
Scale matching. “Problems of managing natural and social capital assets are rarely confined to a single scale. Decision-making should (1) be assigned to institutional levels that maximize ecological input, (2) ensure the flow of information between institutional levels [and include all concerned/affected in the decision-making processes], (3) take ownership and actors into account, and (4) internalize social costs [external and hidden,] and benefits [as they should]. Productive scales of governance will be those that have the most relevant information, can respond quickly and efficiently, and are able to integrate across scale boundaries” (30-31).
Precaution. “In the face of uncertainty about potentially irreversible impacts to natural and social capital assets, decisions concerning their use should err on the side of caution. The burden of proof should shift to those whose activities potentially damage natural and social capital” (31). Again, forcing violators (of non-sustainable/questionable practices), to internalize costs and take responsibility for their negative ecological actions -also internalizing the hidden costs associated with these practices on the environment, workers (injuries/civil right infractions), etc..
Adoptive management. “Given that some level of uncertainty always exists in common asset management, decision makers should continuously gather and integrate appropriate ecological, social, and economic information with the goal of adaptive improvement” (31).
Full Cost Allocation. “all of the internal net on the costs and benefits, including social and ecological, of alternative decisions concerning the use of natural and social capital should be identified and allocated, to the [greatest] extent possible” (31).
Participation. “All stakeholders should be engaged in the formulation and implementation of decisions concerning natural and social capital assets. Full stakeholder awareness and participation contributes to be credible, accepted rules that identify and assign the corresponding responsibilities appropriately” (31). Even if one does not write the rules (the corporation goes by), they are still responsible if they “get in bed together”/ do business with one another.
-Building a Sustainable and Desirable Economy-in-Society-in-Nature
Education should be widespread (as you will see in my final project), and responsibility/internalization of questionable ecological practices should be strictly enforced. Changing the goals of the economic system would create a noticeable (positive) systems change.
More Ways To Change The Current Economic System:
“Economic policy has focused almost entirely on promoting continuous growth in the GDP. Economic growth often translates into more, instead of better consumption, excessive material and fossil fuel use, and increased waist. The culture of consumerism has developed, in part at least, as a means of enhancing consumption driven economic growth” (Building a Sustainable and Desirable Economy-in-Society-in-Nature 52). To withdrawal incentives for excessive material consumption would be a step in the right direction, and to even penalize these acts- would be an even bigger step. To promote alternative resources (renewable energy), promote quality over quantity in our economic capitals, and incentives aimed towards recyclable materials; in turn, would promote sustainability. These guidelines would be universally acceptable in all of the world’s economic structures- as they concern the world as a whole.
“To realize the transition to the new economic system we envision, it is necessary to greatly expand the commons sector of the economy, the sector responsible for managing existing common assets and creating new ones” (Building a Sustainable and Desirable Economy-in-Society-in-Nature 52). The authors went on to give a few examples of how to expand the common sector. They said, “one option for expanding and managing the commons sector is to create common asset trusts, at various scales. Trusts, such as the Alaska Permanent Fund and Regional Land Trust, can propertize the commons without privatizing them” (Building a Sustainable and Desirable Economy-in-Society-in-Nature 52). I feel as if more research and education in sustainability could only further human’s technology towards sustainability. To internalize principles of sustainability, and promote those who seek it, is an area of expansion that is critical.
“A lasting prosperity requires much closer attention to the ecological limits of economic activity. Identifying and imposing stricter resource and emission [caps are] … vital for a sustainable economy. The contraction and convergence model developed for climate regulated emissions should be applied more generally.”(Building a Sustainable and Desirable Economy-in-Society-in-Nature 58). This model developed for climate can be a universally acceptable model to control environmental emission caps in other areas of concern. “Effective mechanisms for imposing caps on these material flows should be set in place. Once established, these limits need to be built into the macro-economic frameworks” (Building a Sustainable and Desirable Economy-in-Society-in-Nature 58). Policies should limit resource use more extensively, and apply a cap system that is strictly enforced- in all economies around the globe- universally.
The economic systems of most nations are based on a time when natural resources were abundant, population sizes were moderate, and consumption levels were low. A complete re-design of the economic system, not just in the US, but in nations around the world is in order. A universally acceptable system would include: the regeneration of carbon sinks worldwide, education from nature, and economy of sufficiency, the re-examination of the finance sector, and a maturing of capitalism values. Economists need to see the connection between a sustainable economy and a healthy ecosystem. In recent times, a realization of our boundaries of our natural, finite resources has manifested. Now more than ever, the human race has the technology and awareness to change current economic values; gearing them towards sustainability. Education in sustainability should be widespread and mandated (especially those who define the economic system), and responsibility/internalization of questionable ecological practices should be strictly enforced; addressing both, hidden and external associated costs. A change in economic policy is in order- a universally acceptable system (in all economies worldwide), that aims to withdrawal incentives geared towards over consumption (promoting quantity over quality, the use of fossil fuels, and produces high waste yields). Expanding the common sector of the economy-to endorse those who research sustainable solutions- should also be a universally acceptable practice (in the re-design of national economies), around the world. Global economies should also apply a cap system that is strictly enforced for all finite resources that are an indispensable part of the nation’s economy.
We all share one planet; therefore, our economies and what we value as capital should be ecologically based. These are just a few ways we can better improve our economic system, with a comprehensive, universal re-design that works in line with our ecosystem- geared toward sustainability.