FST JOURNAL

The secret roof garden of the Birmingham Library – for urban areas, one of the key recommendations is a focus on gardening and the provision of more green space

 

It is almost inevitable that this will become part of standard economic analysis as it has a very strong theoretical backing and the foundations are solid. To properly discuss welfare or wellbeing requires a focus on assets – those stocks on the basis of which our lives depend.

Inclusive wealth sits very comfortably with GDP because these two measures are designed to serve different purposes. GDP was invented to give a sense of the extent of economic activity for short-run macro-economic management. It would be a mistake to use it to discuss economic success over the long run.

Carrying capacity

The bedrock of the review is the finding from earth sciences that humanity’s total demand for nature’s goods and services vastly exceeds the earth’s capacity to continue to supply them on a sustainable basis. So this is a firefighting situation. It is vital to find ways to cut the gap between capacity and consumption to zero, i.e. to create a balance. If sustainable development means anything, that balance must then be maintained for the long term. Nature has to be considered as a series of assets that have to be managed responsibly.

The entire language we use for economic analysis must place nature at the centre. Inclusive wealth is just one part of that new approach which will involve wholesale recalculation and re-estimation.

Then there is the question of reforming the institutions that support these activities, at local, national and international levels.

Citizens live in local surroundings and our activities are, in large part, confined to that. So at the local level, at least for urban areas, one of the key recommendations is a focus on gardening and for the provision of much more green space: it is good for our health, quite apart from the fact that it rejuvenates nature in the local environment. Another task for the citizen is to lobby local and national government to include natural capital in their investment and other policy decisions. 

At the national level, subsidies for nature should be removed immediately. In fact, nature is often not zero-priced, it is commonly negatively priced because its use is subsidised. We are actually paying ourselves to degrade nature at present.

Then, at the international level, it is high time there was an international institution charged with monitoring and managing the global commons, such as the open oceans. Such an institution could raise vast sums of money to protect the oceans.

Biodiversity is one of the characteristics of ecosystems. It poses the question: is the portfolio of assets diverse, or is it concentrated on just a few things? Now, ecosystems differ greatly in size. My mouth is an ecosystem but so are the oceans. Yet it is possible to adopt a consistent way of thinking about these assets at various levels of scale. Doing so forces an holistic approach because it looks at the whole of the biosphere, but considers it in its component parts which are all interrelated.

So the review was not just about measuring carbon. Biomass was not considered as a unit of account either. Instead, the focus was on ecosystem functions.

Now, I have a background in economics. My experience of very, very large-scale global models is that they can be very misleading and result in mistakes. Ecologists, on the other hand, tend to study the small scale. Of course, small scale in terms of the planet could mean the Amazon rainforest. Yet, studying samples and how the various elements interact with one another means considering them as integrated systems. It is not a great idea to strive for a mega-model of the biosphere. Starting with the various components of ecosystems, it is evident how at every stage those small systems are related to one another. That way, an overall view can be built up, rather than trying to impose a top-down approach.

How should that work in economic terms? Obviously, countries should be compensated for protecting them, because they constitute global public goods with everybody enjoying the benefits and these countries will be bearing the entire responsibility of protecting them. Some subsidies are therefore required for this. To be clear though, in this context ‘subsidy’ is actually a payment for ecosystem services, such as is already commonly used in countries like Costa Rica and China, at the local level.

Focussing on consumption, though, avoids the question of population growth. Regardless of one’s views on the general topic, there are things that we should be doing. Globally, over 200 million women of reproductive age have an unmet need for family planning: they do not have the equipment, the knowledge or the facilities. Yet nothing is being done about it. Of all the foreign aid going from OECD countries, less than 1% goes to family planning. Now, everyone says that women’s empowerment is extremely important but that will not happen if they do not have control over their own bodies. To give another example: people say that these issues can be tackled through education. However, after all the years of investment in education, the World Bank reports that a third of women aged 15–24 in the poorest countries are still illiterate. There is a good deal we can do right now.

Grassroots strategy

What could we do in the UK? Well, let’s start at a grassroots level, with every child having nature study as compulsory. Introduce this at primary school level, but revisit it right through to tertiary education.

We already have the Three Rs as the basis of our education system, so let’s add a fourth, which is nature studies. Love for nature can only arise if people actually handle nature though: mucking around in soil, examining what is there, the fungus and the earthworms and so forth. That could be the beginning of a real cultural revolution.