“The Ecological Economics and the development in South America”
‘The Ecologica Economía y el desarrollo in Latin America “(2009)
by WALTER Pengue
Agronomist and master in environmental and territorial policies for the University of Buenos Aires (Argentina).
Doctor in agroecology from the University of Cordoba (Spain).
Assistant Professor of Landscape Ecology and Environment Group, GEPAMA, UBA.
Member of the Scientific Committee on Natural Resources Management
for the United Nations Environment Program (UNEP).
Founder member of the Iberoamerican Network of Ecological Economics (REDIBEE),
the International Society for Ecological Economics (ISEE)
author of numerous publications in the field of ecological economics and sustainable agriculture.
REVOLUTION OF THE SUSTAINABILITY
WE DEVOUR THE WORLD
We all see clearly that we are experiencing a crisis. Some authors call it “civilization crisis”. My opinion is that the human species is now literally devouring the planet. Since the industrial revolution, human require resources ever more intense. Of course, the consumption of goods and services is essential to meet human needs but above a certain threshold, it becomes consumerism.
This has created a phase difference between the demands of economic growth and the capacity of nature. The economic system can not function without resources. Yet orthodox economists usually forget to ask where these resources come from. Taking a step back, it is clear that market prices hide values of resources extracted from ecosystems.
Today, the financial system is disconnected from its own economic reality. Currency amounts in financial circulation already goes over 50 times the actual global GDP. From the point of view of stability, which is serious is that 98% of this financial bicycle traveling at infinite speed as the speed of light while the reproduction of goods and services, the 2% remaining, are progressing as snail’s pace despite the technological advances.
Between 1950 and 2007, water consumption has tripled, fossil fuels increased fivefold, meat increased by 550%, carbon dioxide emissions increased by 400%, global GDP increased by 716%, world trade increased by 1.568%, global advertising costs increased by 965%, the number of tourists out of their borders increased by 2.860%, the number of cars increased from 53 million in 1950 to 565 million in 2002 and paper consumption jumped by 423% between 1961 and 2002 in the latter case. Significant efficiency gains are quickly absorbed by the increase of consumption.
Aristote used the chrematistic concept (from greek “khrêma” : wealth, possessions) in the sense that we give today to the economy. For this philosopher, chrematistic is a set of strategies that allowed them to accumulate more and more money, and therefore power, to impose its decisions, even the most questionable.
Aristote chrematistic was, of course, a reprehensible behavior against nature, which dehumanized those who implemented them. Aristote conceived the risk that the chrematistic free itself from the economy and is not more to the satisfaction of needs but unlimited enrichment.
It had the potential to confuse the means (money) and end in itself. It is clear that when we talk about economy in the world today, we talk about chrematistic. We are far from the original and interesting definition linked to the economy as resource management or home environment.
GROWTH WITHOUT DEVELOPMENT
Economies of “developing countries” grow but their development never happens. Only the GDP rises since their commodity exports increase: soybeans, meat, biofuels, minerals etc … These natural resources are extracted at the lowest possible price, which causes the degradation of the natural environment, social and culture of these countries. It is therefore important to distinguish what the growth is and what development is. In terms of growth, cancer cells also grow and eventually kill an entire organization. We do not know how to identify the social actors in their specific functions based on the development of the common good. As Eduardo Galeano says, “underdevelopment is not a stage of development but its consequence.”
Every day, millions of people are thrown overboard from this model totally irrational and sooner or later they will react to the sudden pressure, not only economic but also environmental, they suffer. Climate change will make this position even more obvious.
Ecological economics is a discipline that deals with the management of sustainability. It is not just to put a price on a property or a specific natural resource. It aims to understand holistically and fully what it is and what happens to this resource.
We design production systems as flows of energy and materials. It’s like imagining a large box where resources (raw materials and energy) enter, turn and stand. Do we want to know what happens in this case, to how effectively these resources are used and how to achieve the purported sustainability?
The aim is not only to find an academic answer but really put in the hands of public policy makers, all the instruments that will enable them to face the conflicts over resource use (WATER – SOIL – BIODIVERSITY) required by local populations and markets.
Ecological economics adopts systems theory to understand the ecological processes and integrates the study of physical and biological limits due to economic growth. She studied companies as living organisms with features such as energy capture, use of resources and energy of nature and the disposal of their waste (social metabolism). These metabolisms, urban, rural or industrial work in different ways, in different stages from the energy capture to disposal.
Ecological economics analyzes the flow of energy and materials to give them real value to natural resources and nature itself as a major provider of environmental services.
Among the ecological services we find for example the water cycle. For example, imagine what happens if the water cycle is altered on the terrestrial scale. It may occur huge droughts and entire ecosystems may disappear. Yet we do not value water as it should, even for access to drinking water. Before the arrival of the capitalist system, many communities could take water along the rivers. Today, we must clean up the water before drinking it and in addition we pretend to make them pay the claims of these communities, whereas previously they had so unpolluted. Who should take charge of this situation? Who should pay? These communities?
Another important aspect is the cycle of nutrients in the soil that we are altering now. We have altered the nitrogen cycle. This causes problems in agriculture, food production. Recently, an economist stated that globally, the GDP of agriculture was insignificant because it represented only 3% of global GDP. And if the 3% disappeared, what would happen ? The answer is very simple: we would have nothing to eat. We can not analyze the value of foods based on their share of world GDP.
Many ecosystem services are linked to biodiversity. What is happening to pollinators, for example ? Pollinators are small insects, birds and other animals that occupy different flowers to pollinate. Currently, we are facing a global crisis of pollinators due to huge amounts of agrochemical agents that we inject into the system. This decline of pollinators greatly affects the production in various regions of the world. This means less food for all. If flowers are not fertilized, there are no seeds and if there are no seeds, there is no food.
All this can not be properly taken into account in the context of important ecological services that humanity must manage and protect. It is not that these services are paid but we have to recognize the invaluable services that the earth provides us free and we are not aware.
VARIETY OF SERVICES
Ecosystem services are the huge profits made by humans with ecosystem functions. They include the maintenance of the gaseous composition of the atmosphere, the climate balance, the control of the hydrologic cycle that provides fresh water, waste disposal and recycling of nutrients, production and preservation of soils and the maintenance of soil fertility, the control of pests that attack crops and spread of human diseases, the pollination of crops and the maintaining of a huge gene pool where humanity has learned the elements that form the basis of its development, such as seeds, pets, medicines and industrial products.
What is an externality? This is a ecological cost not included in the accounts of companies or industries. Many companies call themselves as “successful” in their production because they do not include in their accounts the caused damages. I cause damages, discharge me about another company or the environment and does not assume the load. This is an externality. This may simply be to take water at 20°C in a river and to poor it again at 45°, affecting fish from this river and fishing businesses downstream. When I do not take this to my office, I cause an externality.
Ecological economics postulates the “internalization of externalities”. This is not a pun. What we want is that those who cause these externalities count and incorporate them into their own expense. And this may contribute to fully change the production process. Nowadays, there are hundreds of totally outdated and inefficient production processes in environmental terms.
At the same time, there are alternative technologies that are not used only for reasons of cost. We must work together with public policy makers so that they encourage themselves the entrepreneurs to reduce externalities. It should also duly inform the general public of these new technologies and the need to implement.
We can consider the externalities at the local, regional and global scale. In general, developed countries have improved eco-efficiency in recent years. However, this calculation does not take into account what these companies make in other parts of the world. Many of these firms locate part of their environmental liabilities in “developing economies”. As these countries wish to attract investment funds, their leaders agree to import ecological damage without consulting their own people.
This is how many transnational companies transfer in our territories polluting technologies they would not use in their country of origin.
A chief economist of the World Bank (everyone knows the case of L. Summers) issued a few years ago, recommendation, filtered and published by The Economist, to implement the ambiental liability (externality) in jurisdictions where economic compensation caused by the loss of life or disease resulting impact of foreign contaminating companies that involve the lowest marginal cost.
In ecological economics, also known as “new indicators” are needed to guide a paradigm shift. An example of these indicators is the ecological footprint, which aims to raise awareness on the use of natural resources. Measuring the ecological footprint is the number of hectares needed to meet the basic needs of a person and to manage waste and pollution.
Currently, the average global ecological footprint is 3 hectares per person. With a world population of almost 7 billion, the surface of the whole earth is not enough to meet the basic needs of humanity. The yield increase food production does not resolve the problem. What we need to change is the paradigm of consumption and production companies.
While in India and in many “developing” countries every average person consumes the energy equivalent of 2,000 kilocalories per day, this figure varies between 20,000 and 100,000 kcal in developed countries. This consumption is very high and converted into hectares, it is over 10 hectares in the United States, for example, against 1 hectare in India, Kenya and Morocco.
Other related indices are the water footprint (the amount needed to produce a given well water) and carbon footprint (which measures the CO2 emissions generated along the production chain of a product or a service). Both indices will assume increasing importance in international debates related to climate change and the global water crisis.
Taxes, subsidies, indirect instruments of regulation of economic systems are also an alternative, a workaround used to partially regulate the use of resources.
If the technical indicators are adequate and the contamination damages clearly measurable, to establish a tax on a specific production, that could even help to implement this production, is a positive step. However, if the tax applies only to collect additional income on a polluting activity, it will not fit.
On another side, the application of subsidies for clean technologies is also an interesting way to promote. For example, in the basin of the river Plata, the allocation of subsidies to agricultural production according to sustainable management practices such as the use of terraces. Farmers benefit from these grants to implement these practices and recover the investment in two or three years, thanks to increased productivity in their fields. This results in an increase in the income of the farmer at the individual level, and the State collects more taxes.
Other instruments that appear in the medium term is the integration in the accounts of the above externalities. Ecological economists speak of calculation of “intangibles”, which takes into account the value of natural resources in the production process.
For example, during the debate on global trade flows of products, it is important to take into account the virtual water imports, that is to say the amount of water used to obtain a product. A country that imports this product considers the use that is made of this water as a no cost and do not include in its accounts.
In the same way, we can speak of “virtual ground”, that is to say the amount of nutrients that pass in soybeans, meat, wood and all the products that the soil serves as a resource base. To date, we consider it as a zero cost. Yet, in the end, we must replace nutrients through mineral fertilizers that you pay 1500 USD per tonne. How can we export nutrients at zero cost and then pay such prices to recover ? This relationship should be reviewed in the medium term in the discussions we have at the UN.
We also talk a lot of replacing GDP (Gross Domestic Product) by another type of indicators. This has to do with the green accounting. Countries will have to establish some sort of “green” inventory related to the protection of “intangible” through forms of production among the most sustainable new technologies and primitive technologies abandoned but allow a more efficient use of resources.
For this, we need to stop looking at problems with a single endpoint, as is the case for GDP and to start reading the reality in a quite different way where economics, social, ecological and cultural are fully considered in an integrated manner. These multi systems are the icing on the cake of ecological economics.
Ecological economics was considered as a “flagship” in the discussion on the use of natural resources at the PNUMA (UNEP) during the debate on the need for conversion to a “Green Economy”. First, we must understand that economic systems depend exclusively on nature to continue to operate. Then, we must reconsider the issue of environmental services and externalities. Finally, we must develop a mode of production and sustainable and equitable distribution of benefits.
The problem is that currently, groups of companies that pollute the most use the term “sustainable” (also called “supportable” Ndt). Sustainability has become a “way to” but never a final goal. We can clearly see that the man is a parasite species on a finite planet. This species must be able to control its direction, totally abusive today. These guidelines are not going to the economy, but a paradigm shift but in a socio-environmental vision that abandons anthropocentrism. In the meantime, the “sustainable development” will continue to be a front for many organizations, businesses and ministries that proclaim “sustainable”.
In recent centuries, Humanity has gone through three major technological revolutions.
The first was the Industrial Revolution, which allowed unprecedented expansion of the production of material goods and access to areas and resources on extremely distant planet.
Then more recently, we discussed the technological revolution with the advent of biotechnology, nanotechnology, new materials technology and communications, which allow rapid flow of information and new ways of appropriating nature.
The third, the revolution of the first stage of the twenty-first century will be the revolution of sustainability. To continue to inhabit the earth, man would have to call on all his knowledge to carry out research, in all directions, modes of coexistence with nature.
See also: Sociedad Internacional de Economía Ecologica (ISEE), Red Iberoamericana de Economía Ecologica (REDIBEE)