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by John D. Liu


This is not how it works…

“If the world is a table with four legs (US, Eurozone, China/India, and the Arab world), right now, all four legs are shaky”, said Thomas Freidman, New York Times columnist after listening to discussions at the Davos World Economic Forum in January. Old capitalism, many exclaimed, is dead. What has led us to this crisis point?

Studying the Earth’s ecosystems is fascinating and can show us the way to sustainability if we are willing to act on the evidence before our eyes. When we consciously observe nature – the tides, atmosphere, movement of clouds, river systems, microbial communities, living soils, plants and animals – evolutionary logic is revealed. Nature is always adapting to changing conditions and seeking equilibrium. Everything has a purpose, nothing is lost, nothing is wasted, and nothing is extraneous. We know that the Earth’s naturally functioning ecosystems are the basis of life on Earth, providing air, water, soil fertility, raw materials and energy. It is also clear that the global economy does not recognise that the production and consumption of all goods and services depends entirely on the ongoing functionality of these ecosystems, and, as a result, fails to value it correctly. This is not surprising for a system that was founded on feudal privilege, military force, colonisation and slavery. While our stock market screens and bank accounts claim we have generated wealth, in reality, we have enriched a small minority of people while impoverishing a much larger majority of people on Earth, and destroyed ecological function over huge portions of the planet.

Now nature is warning us to stop and think.

We currently face numerous challenges, including human-induced climate change, biodiversity loss, large-scale deforestation, desertification, hunger, economic crisis, social instability, migration, armed conflict, political revolution and war. Commenting on this “litany of sins”, Lester R. Brown, founder of the Earth Policy Institute and author of Plan B 4.0, recently said, “We must go beyond lifestyle changes and change the system, or civilisation will end”. In the face of such urgency, many of the assumptions that our civilisation has grown up with are thrown into question. Even the founder of that bastion of capitalist thought, the Davos World Economic Forum, Professor Klaus Schwab, recently declared: “Capitalism, in its current form, no longer fits the world around us”.

From the study of natural ecosystems comes an economic answer that goes to the fundamental question of ‘what is wealth?’. Although everything that is produced and consumed comes from the bounty of the Earth, according to current economic thinking, the value of ecological function is zero. We now calculate the economy and money as the sum total of production and consumption of goods and services. By valuing products and services without recognising the ecological function from which they are derived, we have created a perverse incentive to degrade the Earth’s ecosystems. Carbon trading schemes barely scratch the surface of appropriately valuing nature. They continue to suggest that money is derived from production and consumption but offer a small proportion of that money to provide incentives for slightly less polluting behaviour. The Economics of Ecosystems and Biodiversity (TEEB) is more comprehensive and tries to put prices on the various services provided by nature, but it too falls short of the ideal by incorporating the assumption that money in its present form is the starting point. We have collectively become Oscar Wilde’s cynic and ‘know the price of everything and the value of nothing’. We need to go much further.

In order to survive and become sustainable we need to devise a system where instead of personal gain, the intention of all human effort is aligned with nature. Where is it set in stone that human work must be self-serving? Aren’t the great achievements that humans have made based on our ability to work together? In fact there have already been two Nobel Prizes (John Nash and Elinor Ostrom) awarded for recognising that if an individual pursues their own interest to the point where it damages the collective interest, it is no longer in their own interest. This means that the interest of individuals and the interests of humanity can be seen to be the same. Shouldn’t we be basing our society, economy and civilisation on the highest possible understanding and principles?

Functional ecosystems can be shown to be more valuable than production and consumption. A pathway to sustainability appears if, instead of the economy being based on production and consumption of goods and services, it were based on ecosystem function. This would mean a fundamental transformation of human society. This development trajectory can be seen to address all of our most pressing problems. In an economy based on ecological function it would be economically disastrous to pollute. A functional economy would mean that conservation is not considered an expensive luxury, but the way to preserve wealth. It would also mean that restoration of degraded lands would be recognised as a means to increase wealth. Sequestering carbon would be a matter of course rather than an afterthought. A functional ecosystem-based economy would be much more fairly distributed, because those responsible for maintaining that function – currently those who suffer worst from the degradation inflicted by consumer capitalism – would be compensated for restoring and maintaining ecosystem functions.

Seen from this perspective, it is easy to recognise that the developed economies have imposed their will on the lesser-developed economies and just assumed that they had the right to do this. A study of the thoughts of many indigenous peoples shows that their perspectives are more highly civilised in being much more respecting of the value of functional ecosystems. Since all people are equal, the views of indigenous peoples are an integral part of human culture and a crucial guide for us in mapping a new path towards sustainability.

Now many people, especially those with vested interests in maintaining the current economic structure will ask; “do we really need to have fundamental and transformational change?” If you analyse the current economy objectively you find at least three reasons why it must change. First, as already noted, it is illogical to value the derivative goods and services without ascribing an appropriate value to the source of these goods and services (functional ecosystems). It creates a perverse incentive to degrade, and we can see the results in shrinking forests, expanding deserts, drained wetlands, disrupted dry-lands and coastal regions and oceans. This basic mistake must be corrected, and soon. Secondly, it is impossible to grow the economy infinitely from finite resources, yet in the current economic model creating and maintaining jobs for new members of the labor force requires infinite growth. Simple mathematics proves that this is impossible. Thirdly, the huge crimes that have been committed to establish this system make it fundamentally immoral. This can be seen every day and everywhere in the enormous disparity between the wealthy and the poor. With seven billion people on the Earth and a billion being added approximately every 12 years, we must find a way to address the economic disparity and create a path for sustainability, based on our understanding of the need to correctly value ecosystem function.

Humanity is exhibiting the behaviour of what in a natural system would be described as a parasite – we are consuming our host. When a host dies the parasite dies as well. This characterisation, while accurate given our current behaviour, seems dark. An alternative would be to seek what is humanity’s unique evolutionary niche and contribution to maintaining ecosystem function. This seems to be consciousness. We have developed the ability to think abstractly, to envision our own death, to consider time relatively and to communicate complex thoughts from generation to generation. So, if we are to be conscious beings rather than parasites, we need to consciously design a fair, sustainable economy and society. Acknowledging that functional ecosystems are the basis of all life and therefore basis of all wealth is the first step down a long path. Leaving the path of violence and inequality that we are on is fraught with difficulty, but is there really any other choice? Making functional ecosystems the engine of a new economics, positions all people’s efforts to benefit themselves, their families, human society and the Earth. The path that values ecosystem function as the basis of life and wealth is the one that leads to sustainability, less conflict, and ultimately, survival for the human race.

2 Responses to “Functional Ecosystems as the Engine of the Green Economy”

  1. Brent Verrill

    Well said Mr. Liu. I think I might go a bit further, or at least into more detail, and say… One place to start is with our currency system. The foundation of our economy is based upon currency. The abstraction of currency as “a medium of exchange” is lost on 99% of the population so that money is the end, not the means. We confuse “wealth” and “riches.” We need a currency system based on ecological truths and abundance rather than scarcity and ignoring ecologies. Governments and private central banks certainly won’t get us there. It’s time for us to think differently about money. Local currencies begin to touch at this, but I think it’s time to go further.

    Reply

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