A River and Its Water: Reclaiming the Commons - Part 33
33rd of a series
Natural Capital and Ecosystem Services
“It’s the economy, stupid.”
- James Carville
Homo economicus: is a hypothetical person who “behaves in exact accordance with their rational self-interest [by seeking] to maximize utility as a consumer and economic profit as a producer.” The concept, which dates back to John Stuart Mill and the Utilitarian school of philosophy in the 19th century, is the foundation of modern economic theory. In this view, humans are ascendant, economics holds the key to happiness, and nature is a treasure chest to be exploited by humans, for humans. It’s what drove the Industrial Revolution and what continues to drive both modern capitalism and modern politics.
But even if you measure the value of the earth’s natural resources solely in economic terms, shouldn’t you at least look at the whole picture? Yet how often have you seen a corporate balance sheet that accounts for the true worth of those resources – of the benefits they provide and of the costs our activities impose on the ecosystem? “That’s a staggering omission,” write Amory and Hunter Lovins and Paul Hawken in A Road Map for Natural Capitalism. “The economy, after all, is embedded in the environment.”
How staggering? In their 1997 article, “The value of the world’s ecosystem services and natural capital,” Robert Costanza and his colleagues wrote, “The economies of the Earth would grind to a halt without the services of ecological life-support systems, so in one sense their total value to the economy is infinite.” The authors estimate the monetary value of these services is at least $33 trillion, which was almost twice the world’s gross domestic product. And that was 25 years ago.
Factoring in the real costs of these services would change literally everything. Over the last 50 years, the value of global GNP has increased dramatically – due largely to the “free” services nature provides. On the other hand, the value of the world’s total natural capital has declined significantly – due largely to the overuse, extraction, and pollution of the “free” goods nature provides.
For millennia human have turned to technology in an effort both to insulate themselves from the arbitrary forces of nature and to control those forces. But it’s hard to escape from an essentially closed system in which technology ultimately depends on the ecosystems it also degrades. Because of the pressures of both economic and population growth, we now annually “lose three to five trillion dollars’ worth of natural capital, roughly equivalent to the amount of money we lost in the financial crisis of 2008–2009.”
“Unfortunately,” note the Lovins and Hawken, “the cost of destroying ecosystem services becomes apparent only when the services start to break down. . . .What’s more, for most of these services, there is no known substitute at any price, and we can’t live without them.” Most of all, these resources belong to all of us – and to every living being whose life depends on them. Yet we continue to allow individuals, corporations, and governments to dig up the earth, pollute the air, and dam the rivers. Where did some of us get the power to divvy up and pass around the global commons that belongs to all of us?
Finally, while there are many reasons – from the ecological to the aesthetic – to protect nature and preserve the earth, the argument in this post is not about hugging trees or communing with druids. It is about the hard science of economics, appealing not to our altruism, but solely to our self-interest.