On Prosperity Without Growth and ecological economics

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On the train I was listening to a podcast by Tim Jackson about his latest book “Prosperity without Growth”. I read the book few months ago and found it full of insights and great ideas that are still lingering in my mind. It analyzes the dilemma of “growth” and his linkage with material consumption on a planet that is running out of resources and putting too much carbon into the atmosphere. In the second part shows some possible pathways for a sustainable future where we have “decoupled”, i.e. broken the link between prosperity and material throughput.  I promised myself I would read it again, so a refresh by listening to a podcast on the LSE website was more than welcome.

:: Consumerism ::
During the presentation he shows a graph with two trends over the last years in the UK. One line shows a drastic increase in personal debt; the other shows a sharp decline in household savings.

(Source: graph as shown in the Report Prosperity without Growth, p 22, data from www.statistics.gov.uk)

Jackson explains:  “ So what’s going on here?  People are borrowing more money and liquidating their savings because they have been persuaded that they should spend money they don’t have, on goods they don’t need, to create impressions that won’t last on people who won’t care about it”.

I find it simply superb.

@SustainBTH 

::Ecosystem services and natural capital::

Jackson also suggested an economic model where ecosystem services are taken into account in the model as THE vital component. An estimate of the value of such services and assets tells us that this value exceeds the monetary value of our conventional economy. I believe that Jackson refers to a famous article by Costanza et al 1997, “The value of world’s ecosystem services and natural capital”.

My reflection on Costanza et al. and a follow-up article that came soon after that to clarify some figures: authors of the article provide a monetary value to the world’s ecosystems.  In a later article, they though make very clear that the total absolute value of such services nature provides is infinite. What is the value of services like photosynthesis, water purification, or biodiversity? The argument they use is that we are using such services anyways and the monetary value they have calculated can help us to figure out / calculate some marginal values.

::Putting a price-tag on Nature?::
An intuition that comes to my mind: can we think of a model for pricing such assets and ecosystem services (as upstream as possible) in marginal values up to a certain point, and after that point draw a line with ecological thresholds? What does it mean “in marginal values up to a certain point”? An idea of environmental economics is to give a price tag to the environment in terms of resource extraction, green taxes on pollution, etc. The school of thought of ecological economics argues that such green taxes are good but not enough, because you can still price a scarce resource but use it over the safe threshold (examples can be pollution from fertilizers, extraction of fossil fuels, overharvesting, etc). So the need, for ecological economics, is to draw a line where an ecological constraint is. Still, the idea of the marginal value of ecosystem services can be helpful for it informs us on what does it cost to extract a little bit more of that resource (so here is the idea of the marginal value) always keeping in mind that there is a limit we can’t exceed (absolute values). These limits can be informed by the state-of-the-art research we have with publications like the Millennium Ecosystem Assessment (MEA 2005) or the more recent Planetary Boundaries from the Stockholm Resilience Centre.

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3 thoughts on “On Prosperity Without Growth and ecological economics

    inafutureage said:
    November 27, 2010 at 4:47 pm

    Jackson recently edited a volume on Sustainable Consumption, that you might enjoy as well. I found Donnella Meadows’ Thinking in Systems to be a good complement to Jackson’s thesis in PWG.

    eccemarco responded:
    November 27, 2010 at 4:59 pm

    Synchronicity! I was reading just last week some pages of Donella Meadows’s book Thinking in Systems and there seems to be so many possible connections with the implications for sustainability. Especially, at my job the students are now analyzing some tools/concepts for social change and one of them explored lately was Donella M’s idea of the leverage points. Surely worth to be explored more with its link to sustainability. Thanks!

    victor branagan said:
    December 3, 2010 at 2:16 pm

    Hi Marco,
    Jackson makes his point very well in the Ted Talk, we are using this as an introduction to an economics course we are running here in the New Year. The financial crisis here in Ireland is making people sit up and listen to alternative views, which is heartening. It sometimes takes a crisis to present new opportunities!
    I must get to read ‘Thinking in Systems’ as her writing is very accessible and very relevant.
    thanks for posting,

    victor

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