The ecosystem approach: Its use and abuse

2013

vi "We are coming to realize, in part through the process of losing them, that environmental assets are key determinants of the quality of life in most societies. These assets-forests, clean water, clean air, species, rivers, seas, and many more-are not like physical or financial assets : they are alive and have dynamics, requirements, imperatives of their own. Recognizing this and recognizing that they provide for the essential infrastructure for human existence is a key step on the road to building an economic framework that can contribute to the development of sustainable policies."

Ecological Economics, 2020

Our environment and economy are at a crossroads. This paper attempts a cohesive narrative on how human evolved behavior, money, energy, economy and the environment fit together. Humans strive for the same emotional state of our successful ancestors. In a resource rich environment, we coordinate in groups, corporations and nations, to maximize financial surplus, tethered to energy, tethered to carbon. At global scales, the emergent result of this combination is a mindless, energy hungry, CO2 emitting Superorganism. Under this dynamic we are now behaviorally 'growth constrained' and will use any means possible to avoid facing this reality. The farther we kick the can, the larger the disconnect between our financial and physical reality becomes. The moment of this recalibration will be a watershed time for our culture, but could also be the birth of a new 'systems economics'. and resultant different ways of living. The next 30 years are the time to apply all we've learned during the past 30 years. We've arrived at a species level conversation. "The real problem of humanity is the following: we have paleolithic emotions; medieval institutions; and god-like technology."-E.O. Wilson "We live in a world where there is more and more information, and less and less meaning."-Jean Baudrillard "Not everything that is faced can be changed, but nothing can be changed until it is faced."-James Baldwin 1. Overview Despite decades of warnings, agreements, and activism, human energy consumption, emissions, and atmospheric CO2 concentrations all hit new records in 2018 (Quéré et al., 2018). If the global economy continues to grow at about 3.0% per year, we will consume as much energy and materials in the next ∼30 years as we did cumulatively in the past 10,000. Is such a scenario inevitable? Is such a scenario pos-sible? Simultaneously, we get daily reminders the global economy isn't working as it used to (Stokes, 2017) such as rising wealth and income inequality, heavy reliance on debt and government guarantees, populist political movements, increasing apathy, tension and violence, and ecological decay. To avoid facing the consequences of our biophysical reality, we're now obtaining growth in increasingly unsustainable ways. The developed world is using finance to enable the extraction of things we couldn't otherwise afford to extract to produce things we otherwise couldn't afford to consume. With this backdrop, what sort of future economic systems are now feasible? What choreography would allow them to come about? In the fullness of the Anthropocene, what does a hard look at the relationships between ecosystems and economic systems in the broadest sense suggest about our collective future? Ecological economics was ahead of its time in recognizing the fundamental importance of nature's services and the biophysical underpinnings of human economies. Can it now assemble a blueprint for a 'reconstruction' to guide a way forward? Before articulating prescriptions, we first need a comprehensive diagnosis of the patient. In 2019, we are beyond a piecemeal listing of what's wrong. A coherent description of the global economy requires a systems view: describing the parts, the processes, how the parts and processes interact, and what these interactions imply about future possibilities. This paper provides a brief overview of the relationships between human behavior, the economy and Earth's environment. It articulates how a social species self-organizing around surplus has metabolically morphed into a single, mindless, energy-hungry "Superorganism." Lastly, it provides an assessment of our constraints and opportunities, and suggests how a more sapient economic system might develop.

Mediterranean Journal of Social Sciences, 2019

The paper attempts to synthesize the analytical nucleus of classical political economy and modern ecological economics. In essence this means making a connection between social issues of income distribution, accumulation of capital and economic growth with biophysical limits to economic development. We first model a simple growing system of production and explore its potential to maintain sustainability when using a single natural resource. Taking into consideration the laws of thermodynamics we show that the long-term sustainability of such a simple system is unlikely. When the model is extended to incorporate a wider range of inputs used and commodities produced, such complexity accompanied by knowledge-based structural changes provides necessary conditions for the long-run sustainability of a growing economic system. Since input-output complexity results from the division of labour on the one hand and from intentional R&D policies on the other, this conclusion also brings forward some policy implications regarding income distribution in the society.

Ecological Economics, 1990

Rethinking economics, 2017

Comparative economics-the description and underlying explanation of human and nonhuman variations on the relationship between life and its environment seeks to discover how and to what extent the limitations that apply to some living systems can be overcome in others, including our own economy. It is founded on four phenomena, which collectively explain how life and its economic structures arise, how diversity of form and function come about, and how change occurs. These phenomena are self-organization, emergence (new properties and entities formed when parts combine), selection and adaptation, and feedback between living things and their surroundings. The systems of life vary in patterns of inheritance, the units among which selection takes place, resources, and size; these variables, in turn, affect patterns of history, adaptability, and innovation. Beneath the variation, all living systems are subject to local competition, cooperation, and evolution. Ten distinctive institutions and capacities have been thought to be unique to modern humans: cultural (non-genetic) inheritance of information and adaptations; cooperation among genetically unrelated individuals; markets in which enforceable contracts determine the quantities and prices of goods and services; utility, emergent goals and values informed by stable preferences; intentionality, deliberate action toward a predetermined goal; innovation by designing devices and institutions without historical precedents; symbolic thought; extrasomal extension, work performed beyond internal metabolism; and unsustainable exploitation of resources. These traits and capacities, which confer unprecedented power and reach, occur widely outside the human realm and have evolved independently in many organisms and ecosystems. They accelerate but do not fundamentally alter adaptation and innovation, and reduce but do not eliminate 123 106 G. J. Vermeij the constraints under which life in a finite world has persisted for three and a half billion years. Future civilization on Earth is therefore unlikely to forge an entirely new world order. Policies and predictions that are inconsistent with these universal realities are likely to fail. In particular: (1) local competition will remain necessary for successful adaptation and innovation; (2) an information-based economy will not replace an energy-based one, and energy use is unlikely to decline; and (3) redundancy of production in multiple sites must not be sacrificed through free trade and elimination of subsidies to achieve greater economic efficiency. Human survival requires that we work with nature, not against it.

The Economics of Nature and the Nature of Economics

Like any field of scientific inquiry, ecological economics has evolved along several different fronts. One important element is an understanding of the history of the field, which is characterized by interwoven strands from ecology, physics, the physiocratic and classical schools of economics, and other fields in the social and natural social sciences. Another important area is the relation of neoclassical economics to ecological economics. Part of the impetus behind the creation of the International Society for Ecological Economics was the growing recognition that, by itself, neoclassical economics could not fully explain the sources of depletion and degradation, nor could it provide a reliable compass for future development. A third broad strand of work is the empirical analysis of energy and material flows within and between economic and environmental systems. This work ranges widely, from the construction of sustainability indicators to land use models. This book covers some of the important recent developments in the theory, concepts and empirical applications of ecological economics and sustainable development. It contains contributions from some of the leading scholars in the field of ecological economics. The book is divided into two parts. Part I, The Nature of Economics, includes chapters on the contribution of classical economics to ecological economics, valuation in ecological economics, the role of communication in the discourse on sustainable development, and a classification system for theories and methods in ecological economics. Part II, The Economics of Nature, includes chapters on alternatives to the growth paradigm, case studies of sustainable development and critical reviews of the environmental Kuznets curve, green national accounting, indicators of natural resource scarcity, and alternatives to gross domestic product.

2005

In September 1987 twenty people came together at the Santa Fe Institute to talk about "the economy as an evolving, complex system." Ten were theoretical economists, invited by Kenneth J. Arrow, and ten were physicists, biologists and computer scientists, invited by Philip W. Anderson. The meeting was motivated by the hope that new ideas bubbling in the natural sciences, loosely tied together under the rubric of "the sciences of complexity," might stimulate new ways of thinking about economic problems. For ten days, economists and natural scientists took turns talking about their respective worlds and methodologies. While physicists grappled with general equilibrium analysis and noncooperative game theory, economists tried to make sense of spin glass models, Boolean networks, and genetic algorithms. The meeting left two legacies. The first was a volume of essays, The Economy as an Evolving Complex System, edited by Arrow, Anderson and David Pines. The other was the founding, in 1988, of the Economics Program at the Santa Fe Institute, the Institute's first resident research program. The Program's mission was to encourage the understanding of economic phenomena from a complexity perspective, which involved the development of theory as well as tools for modeling and for empirical analysis. To this end, since 1988, the Program has brought researchers to Santa Fe, sponsored research projects, held several workshops each year, and published several dozen working papers. And since 1994, it has held an annual summer school for economics graduate students. This volume, The Economy as an Evolving Complex System II, represents the proceedings of an August, 1996 workshop sponsored by the SFI Economics Program. The intention of this workshop was to take stock, to ask: What has a complexity perspective contributed to economics in the past decade? In contrast to the 1987 workshop, almost all of the presentations addressed economic problems, and most presenters were economists by training. In addition, while some of the work presented was conceived or carried out at the Institute, some of the participants had no previous relation with SFI-research related to the complexity perspective is under active development now in a number of different institutes and university departments. But just what is the complexity perspective in economics? That is not an easy question to

One of the key concepts of science of complexity, self-organization, was formulated for the first time in economics by Adam Smith, with the metaphor of the "invisible hand". Arthur and Herbert Simon and are bound by a double red thread: on the one hand, they are a challenge to the orthodoxy of classical and neoclassical economic science and, on the other hand, they are the result of a personal approach to the search for a highly multidisciplinary matrix. Friedrich August von Hayek is one of the last representatives of the Viennese school of economics, whose focus can be found in the individual decision-making contextualized in the institutional historical framework of a complex society. What qualifies Hayekian analysis is the study of the spontaneity of the results that emerge from relationships between individuals. Price system, cultural heritage, language, morality, currency: all these phenomena are not the result of a deliberate action of some central authority, but the product of the interaction of many uncoordinated individual actions Which, however, give rise to spontaneous phenomena of organized complexity, or rather self-organizing systems.Understanding how spontaneous self-organizing phenomena work, Hayek points out, it is then important to influence their dynamics through interventions on social institutions, in turn the fruits of the historical process of individual interaction. In the 1980s, some economists developed a vision of the economic system based on increasing returns, ie on positive feedback mechanisms for increasing profits, unevenly declining unit costs and technological lock-in, all phenomena characterizing in particular the knowledge-based sectors. According to this theory, economic systems are dissipative structures and, as such, characterized by instability, irreversibility, discontinuities, sudden qualitative changes, such as speculative ups and downs, monopolies, which the conventional economy based on declining yields is not Able to explain. For example, in the face of rising returns, technology always monopolizes the market at the expense of others, giving rise to c.d. lock-in. The dominant version will be the one that at the initial stages of the competition has been able to attract the most volume of demand and it is no surprise that it is the best: in other words, events with little probability can confine the economic system to one of the many distant points From balance and this point may not be the best. The technology dominates until it is spotted by a new one and the process reboots. Growing yield theory is not intended to replace traditional economic theory but to complete it. It is particularly useful for economic and industrial policy decisions as it definitely proves the existence of sectors with different economic behaviors: those which are driven by declining yields (eg agricultural and commodity) and those dominated by rising returns (Typically knowledge-intensive ones).

Information Economics and Policy, 1998

The paper reviews that limitations of the neo-classical economics paradigm in dealing with information: focus on individual rationality, static view of the world, unduly parsimonious characterization of the world of cognition. Then it sketches the contours of an alternative paradigm built on selective rationality, imperfect mental representations, cognitive structures as filters, and an adoption/adaptation dynamics: selection mechanisms adopting certain representations, rationales and conventions, but rules and patterns also adapting to the evolving milieu. The new evolutionary cognitive paradigm is shown to be pregnant with new insights into the structure and functioning of modern economies but also likely to generate some reformulation in our policy prescriptions Classification code: Introduction An economic system is a set of conversations, rationales, protocols, conventions, organizations and institutions providing the coordination and the orientation maps to ensure a viable process of production, allocation and distribution of goods, services and information for a population. It can also be defined as the communication system that underpins this process of coordination of production and exchange.