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Multiple “ways of knowing”
• Western science is just one way of
understanding the world
• Growing recognition of the need for western
science to interface, when possible, with other
approaches to human understanding of the
world around us*
• How we as a society view “nature” has
significant implications for how we try to solve
crises like biodiversity loss and climate change
How do humans value “nature”
*Review January 12 lecture on Traditional Ecological Knowledge
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Western science
US: “Frontier mentality” of westward expansion; “manifest destiny”
A WEIRD* world view
*Western, Educated, Industrialized, Rich and Democratic
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Nature is something to be conquered
Science was (and is) an “engine of
progress”
J o h n P a tric k H e m in g w a y re v is its B im in i, a n o ld s to m p in g g ro u n d o f h is g ra n d fa th e r, E rn e s t. P u b lis h e d in S p o rt F is h in g M a g a z in e , A p ril 2 0 1 3
https://miro.medium.com/max/3332/1*qBhLNuSbkPRhPqYkssMp0g.jpeg
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1960’s: Rachel Carson, Aldo Leopold
and others sounded alarm about
human impacts on nature
“Old school” (1960s-early 2000s) view
was very one directional
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Humans impact the environment
Environmental (“natural”) disasters are a threat but
largely not influenced by humans (hurricanes,
etc)
Didn’t incorporate the possibility of feedback loops
Meant we either viewed “nature” as a threat or
something over which humans had dominion and
therefore some responsibility to protect
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Coupled Human-Natural Systems
(CHN or CHANS view)
• Idea that social and natural systems are
inseparable and linked via feedback loops
Jackson et al. 2001. Science
h ttp s://w w w .e -e d u catio n .p su .e d u /e arth 1 3 1 /site s/w w w .e -e d u catio n .p su .e d u .e arth 1 3 1 /file s/M o d 1 /C N H _ m e d iu m C o m p le xity_ M o d 1 _ 2 _ sm all.jp g
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Human
Behaviors
Community
Structure
Stressors
Stewardship
Human
Outcomes
Individuals
Institutions
Societies
Ecosystem
Function
Local
Regional
Large Marine Ecosystems
• CHANS approach emphasizes:
• The intrinsic value of nature (value
independent of human judgement)
• Or, viewed nature as a resource that has
instrumental value, usually in economic terms
($$)
Biophysical Domain
Human Domain
Valuing nature
Adapted from Collins et al. 2011. Frontiers in Ecology and the
Environment
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Intrinsic vs instrumental value
How does the value of nature fit within
main steam economic theory?
Video Link 1
https://www.youtube.com/watch?v=5Zgo99rVQOw
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Circular Flow Model
(Traditional Economic Theory)
Working labor &
capital
Components of the Economy
• Production = transformation of inputs into goods and services
Goods, services, &
incomes
– Done using labor (efforts by workers, i.e. jobs) and capital (machinery, factories,
equipment, tools, transportation, etc.
• Consumption = use of goods and services, paid for with income
Payments &
services
Taxes, working
labor, &
capital
Taxes, goods,
& services
Income &
services
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Players in the Economy
Types of Property
• Firms = (companies that produce goods and services for
consumers)
• Households (Consumers) = use goods and services, pay
using income
• Governments = receive money in taxes and provide goods
and services in return (highways, parks, defense, health
care, etc).
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Fish are Common Property
Cars are Private Property
Yellowstone NP is Public Property
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Circular Flow of Income
The U.S. Economy (Costs and Benefits)
• Gross National Product
(GNP) most widely used
index of a society’s
economic well-being.
• Similar to Gross Domestic
Product (GDP), but also
includes income inflow and
payment outflow to assets
abroad
• Defined as value of all the
goods and services
produced in an economy
Video Link 2
https://www.youtube.com/watch?v=JacbmD0dMrA&spfreload=10
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Traditional Economic
Accounting
What does GNP/GDP measure?
How do we measure economic activity and an
economy’s “health”?
• Gross National Product (GNP) – Goods and
Services produced by citizens of a nation
regardless of where they are
Video Link 3
• Gross Domestic Product (GDP) – Goods and
Services produced in a nation regardless of
citizenship
Honda Factory
GNP
USA
Japan
GDP
http://www.youtube.com/watch?v=yUiU_xRPwMc
Lincoln, Alabama
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Can Economic Growth ever benefit
Nature?
Reforestation and GDP
• Countries with larger economies tend
to be better at sewage treatment,
have money for conservation, etc.
http://www.economist.com/
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Island of Hispaniola
Environmental Cost: Is Economic Growth (high GDP) bad for
the Environment?
•
DR has “healthier
economy” than Haiti
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To produce 11.7 trillion dollars of GNP:
• 100 x 1015 BTUs of fossil fuels
• 140 million metric tons of copper,
lead and other metals
• 170 million metric tons of wood
products
• Consumed 630 million metric tons
of food.
• Eroded 20 million metric tons of soil
• 5,900 million metric tons of CO2
• 214 million metric tons of MSW
• 1.5 million metric tons of hazardous
chemical waste.
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Valuing the Environment as a
resource
The Economic System
Production and Consumption of Goods and Services
Why is the environment overlooked?
• Market Failures – when the price of goods
and services do not reflect the true costs
(externalities) of producing and consuming
them
• Utility = happiness or satisfaction
derived from using goods and services
• Economic growth = increase in market
value of goods and services produced
by an economy over time; scaled to
population size as per capita income
Circular model means positive feedbacks
and (in theory) is a self sustaining cycle
based on consumption
Big assumption!
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Externalities (“True Cost”)
Especially in the US, true costs are often
incurred through penalties and litigation…
BP Horizon Oil Spill cost the company $54 Billion in
clean-up costs and fines*
• An externality is a side benefit or negative
consequence of an economic activity that
affects others without being reflected in the
cost of the goods and services being provided
*Equivalent to three years profits
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Two
competing
theories
for how to
prevent
overuse of
natural
resources
• Libertarian/Lassez-faire/Free trade:
– Knowledge of connections and
impacts is too imperfect or too
costly to quantify
– Need to let markets figure it out
(those affected by externalities
transfer cost to those producing
it)
• Regulatory
– Too easy to avoid responsibility,
and affected don’t have power
– Need to use mutually agreedupon taxation and regulation to
prevent externalities from
happening
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The tragedy
of the
Commons
Term originated in 1832 with political
economist William Forster Lloyd, who
saw damage to common (i.e. not
publicly owned) pastures in England:
each human is guided by their own self
interest at the detriment to all
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The tragedy
of the
Commons
• Reintroduced in a 1968 essay in
Science by economist Garret
Hardin
• Basic idea is that people will tend
to use up a shared resource, in fear
that others will use it up first
• Problem is, if everyone does this,
nothing is left
• Often used as an argument for the
privatization of resources
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Examples
• Resource consumption:
– Forests
– Fish
– Etc.
• Disposal of wastes
– Greenhouse gases that
cause climate change
– Air and water pollution
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Used by some (libertarian/laissez-faire) economists
to argue for privatization of resources
Hardin’s Theories Challenged by Nobel
economist Elinor Ostrom (and others)
• Argued that solutions can be achieved through
communication and mutual agreement on self
regulation
• Competing theory with libertarian view that
free markets can be used to solve all problems
Video Link 4
https://www.youtube.com/watch?v=ptLQSzdNNd8
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Elinor Ostrom
Alternate view by Elinor Ostrom
Video Link 5
Video Link 6
https://www.youtube.com/watch?v=lwaNZgY9PCQ
https://www.youtube.com/watch?v=BDEAgmklNyE
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Second law of thermodynamics and
Conservation of Matter
Ecological view of the U.S. Economy:
The second law of Thermodynamics revisited
• Entropy (disorder) never decreases, only increases, unless work (and
energy) is applied- no process of conversion is ever 100% efficient
• Economic production is a work process that uses energy to convert
natural resources into goods and services
• Matter is never destroyed, just converted (Conservation of Matter):
anything left over from production (or after product is disposed) return
to the environment after exiting the economic cycle
• The economy is in reality not a closed-loop system, but requires
constant input of energy and materials output of materials: the
environmental implications of this are not considered in traditional
macroeconomics theory
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Unintended consequences of viewing
economy as “closed loop”
Wealth vs income
• Income = a flow of money, for example wages and
salaries from jobs
• Wealth = current total value of a stock of assets, for
example savings in an account, property, etc.
• Wealth can create income through capital =
resources which enable the production of more
resources
• Natural capital = world’s stock of natural resources
and the ecosystem services that they provide- don’t
have to be used up to have value
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A.Assumes that the only “cost” to resource use is
extraction, and that as resource availability
declines, will be corrected by market (i.e. rarer
materials will cost more)
- Some resources (like oil or old growth forests)
take very long time to form, and are not
“renewable” over scale of human life-times. Yet they
typically are not considered as “wealth”
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Ecosystem Services
Unintended consequences of
viewing economy as “closed loop”
- Values that people derive, directly and indirectly, from
ecosystem functions.
A.Assumes that the only “cost” to resource use
is extraction, and that as resource availability
declines, will be corrected by market (i.e. rarer
materials will cost more)
-
–
–
–
–
–
–
–
B. Value of ecosystem services provided by
natural resource is generally not considered
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Chemical composition of the atmosphere
Climate control
Nutrient recycling
Soil formation
Pollination
Habitat for biodiversity
Regulation of hydrologic cycle
And which need to be paid for if they
disappear….
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Valuing Nature:
Constanza et al. (1997): Nature
Measure these
as forms of
Ecosystem
services
• Services concentrated in the most biologically productive
regions
– Coastal zone of the ocean
– Wetlands & estuaries
– Tropical rain forests
• Ecosystem service values: $33 Trillion
• Gross World Product: $18 Trillion
• Severe backlash among resource economists – no one
believed numbers could be this high
• Today ecosystem service valuation is quite common
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Valuing Nature
Ecosystem Services or “Natural
Capital”
• Direct Market Valuation – the use of the
free market to place a value (price) on
environmental goods and services
Oyster Reef Services
Value at Restaurant
& Fish Market
Video Link 7
Fish
Production
Dockside Value
https://www.youtube.com/watch?v=kUnM05Mpiyw
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What do we do when no market
exists for a good or service?
What do We do When no Market
Exists for a Good or Service?
Non-market valuation approaches are
used:
Non-market valuation approaches are used:
1. Avoided or replacement costs: cost required to provide a service that are
avoided by maintaining a natural service
•
1. Avoided or replacement costs: cost required to provide a service that
are avoided by maintaining a natural service
Oyster Reef Services
Replacement costs of
N removal
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One acre of salt marsh:
– Would cost up to $90,000 to restore 1 acre of salt marsh once it is destroyed, but
potentially even more to replace services that it provides
– Provides filtration that would need to be replaced by treatment facility
– Buffers storm surges that would need to be replaced with concrete structures
– Supports larval fish and shellfish that would need to be grown elsewhere
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What do we do when no market
exists for a good or service?
Replacement costs
Non-market valuation approaches are used:
2. Travel cost methods: recreational value inferred from how
much people are willing to pay to travel to use a good or
service
Video Link 8
Travel Costs for
recreational anglers
https://www.youtube.com/watch?v=iTW05vFILXY
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What do we do when no market exists for a good or service?
Travel cost estimation of ecosystem services
3. Hedonic pricing: using prices of goods with vs.
without a service to infer service value (cost)
Video Link 9
Vs.
For example, value associated with a living shoreline
https://www.youtube.com/watch?v=AjcQpzIBu1I
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What do we do when no market exists for a good or service?
Hedonic pricing
Non-market valuation approaches are used:
Video Link 10
4. Contingent valuation: how much are people willing to pay
or to accept for improving or deteriorating the environment
Usually determined using surveys: “stated preference”
method
https://www.youtube.com/watch?v=LkXVCQam5kw
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For example, Willingness to Pay (WTP) for better water quality
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Early example: Value of birds in Mono
Lake
•
Example: Value of birds in Mono
Lake
Loomis, J. 1987. “Balancing Public Trust Resources of Mono lake and Los Angeles' Water
Right: An Economic Approach,” Water Resources Research 23:8: 1449-1456.
• The Situation The State of California Water
Resources Control Board was faced with a decision
about how much water to allocate to Los Angeles
from sources flowing into Mono Lake. The
reduced water flows to the lake were affecting
food supplies for nesting and migratory birds. One
of the first contingent valuation studies to
measure the use and non-use values that citizens
have for public trust resources was a survey of
California households regarding willingness to pay
for increased water flows into Mono Lake.
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Example: Value of birds in Mono
Lake
Example: Value of birds in Mono
Lake
• The Results
• The average willingness to pay per household was
estimated to be $13 per month, or $156 per year.
When multiplied by the number of households in
California, the total benefits exceeded the $26 million
cost of replacing the water supply by a factor of
50. One impact of the survey results was to change the
nature of the debate over Mono Lake from "fish or
people" to one that recognized that people care about
fish and birds, as well as about inexpensive water
supplies for Los Angeles.
• The Study
• The initial academic study asked California
households, in a mail survey, whether they would pay
more on their water bill for higher cost replacement
water supplies, so that natural flows could once again
go into Mono Lake. They were told that, according to
biologists, the higher flows to the lake were needed to
maintain food supplies for nesting and migratory birds.
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Measuring ecosystem services
Video Link 11
http://www.youtube.com/watch?v=-Jw9dPYVT_Y
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Nature’s Contribution to People
• Takes a linked relational approach which
integrates how societies interact with non-human
elements of nature, and specifically how humans
perceive “nature” as part of societal well-being
• In last 5 years, relational value has emerged
(alongside intrinsic and instrumental values) as a
third category of value of nature
• Emerged from the International Panel on
Biodiversity and Ecosystem Services (IPBES)
• Utility of approach is still being debated
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• A grove of trees holds sacred value to a culture, much
more so than any other grove of trees
• A pluralistic view of the world recognizes that this
relationship between people and nature has value, even
if we do not belong to that culture
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Is GDP a sustainable metric of
economic health?
The
Lorenz
curve
Video Link 12
• A graphical representation
that shows the distribution
of income or wealth
• Developed by Max Lorenz in
1905
• Shows the proportion of
overall wealth or income as
a function of increasing
number of people
• With perfect equality
(everyone has same
income) this is a 1:1
relationship
https://www.youtube.com/watch?v=gX21IO16S-k
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Inequality measured as Gini
coefficient, based on Lorenz Curve
The Lorenz curve
Gini = A/ A+B
Video Link 13
https://www.youtube.com/watch?v=q3-MA4JvWO0
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https://visualign.files.wordpress.com/2011/09/lorenzcurve.png
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Inequality measured as Gini coefficient
(or index):
Higher coefficient, greater inequality
https://www.theguardian.com/inequality/datablog/2017/apr/26/inequality-index-where-are-the-worlds-most-unequal-countries
https://qph.ec.quoracdn.net/main-qimg-677f205cc0a236f332c5c7b19ea1d8b2
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Income inequality in China is
skyrocketing
Resource Gap within the US
Xie, Y. and X. Zhou. 2014. Income inequality in today’s China. Proc. Nat. Acad. Sci 111:6928.
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Why is high income inequality
“unsustainable”
Why is high income inequality
“unsustainable?”
(besides being unfair)
• Income inequality correlated with higher rates of
homicide, imprisonment, infant mortality and
teenage births
• Disappearance of middle class can lead to demise of
businesses through market collapse
• Slows overall economic growth
• Increases inequality in political power
https://hbr.org/2014/01/income-inequality-is-a-sustainability-issue-2
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GDP vs Well Being
Video Link 14
https://www.youtube.com/watch?v=EqJcNnijmdQ
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