Planning for the eco-economy.

• Author: Brown, Lester R.
• Position: Ecology

"Building an eco-economy ... will alter how we light our homes, what we eat, where we live, how we use our leisure time, and how many children we have. It will give us a world where we are a part of nature, instead of estranged from it."

TODAY'S GLOBAL ECONOMY has been shaped by market forces, not by the principles of ecology. Accordingly, by failing to reflect the full costs of goods and services, the market provides misleading information to economic decisionmakers at all levels. This has created a distorted economy that is out of sync with the Earth's ecosystem--an economy that is destroying its natural support systems.

The market does not recognize basic ecological concepts of sustainable yield nor does it respect the balances of nature. For example, it pays no attention to the growing imbalance between carbon emissions and nature's capacity to fix or to the role of burning fossil fuels in creating the imbalance. For most economists, a rise in carbon dioxide ([CO.sub.2]) levels is of little concern. For an ecologist, such a rise--driven by the use of fossil fuels--is a signal to shift to other energy sources in order to avoid rising temperatures, melting ice, and rising sea levels.

An eco-economy is one that satisfies today's needs without jeopardizing the prospects of future generations to meet theirs. Ecologists understand the ecological processes that support life on Earth. They understand the fundamental role of photosynthesis, the concept of sustainable yield, nutrient cycles, the hydrological cycle, the sensitive role of climate, and the intricate relationship between the plant and animal kingdoms. They know that Earth's ecosystems supply services as well as goods and that the former are often more valuable than the latter.

A sustainable economy respects the sustainable yield of the ecosystems on which it depends: fisheries, forests, rangelands, and croplands. A particular fishery can sustain a catch of a certain size, but if the demands on it exceed the sustainable yield by even the smallest amount--say, two percent a year--the fish stocks will begin to shrink and will eventually disappear. As long as the harvest does not exceed the sustainable yield, it can continue in perpetuity. The same is true for forests and rangelands.

Nature also relies on balances. These include those between soil erosion and new soil formation, carbon emissions and carbon fixation, and trees dying and regenerating.

Nature depends on cycles to maintain life. In nature, there are no linear flow-throughs, no situations where raw materials go in one end and garbage comes out the other. In nature, one organism's waste is another's sustenance. Nutrients are continuously cycled. This system works. The challenge is to emulate it in the design of the economy.

Ecologists appreciate the role of photosynthesis, the process by which plants convert solar energy into the biochemical energy that supports life on Earth. Anything that reduces the photosynthetic product--such as desertification, the paving of productive land, or the acidification of bodies of water by acid rain--will also reduce the productivity of the planet in the most fundamental sense.

Despite this long-standing body of ecological knowledge, national governments have expanded economic activity with little regard for sustainable yields or the fragile balances in nature. Over the last half-century, the sevenfold expansion of the global economy has pushed the demand on local ecosystems beyond the sustainable yield in country after country. The fivefold growth in the world fish catch since 1950 has pushed the demand of most oceanic fisheries past their ability to produce fish sustainably. The sixfold growth in the worldwide demand for paper is shrinking the planet's forests. The doubling of herds of cattle and flocks of sheep and goats since 1950 is damaging rangelands, converting them to desert.

An ecologist not only recognizes that the services provided by ecosystems may sometimes be worth more than the goods, but that the value of services needs to be calculated and incorporated into market signals if they are to be protected. Although calculating services is not a simple matter, any reasonable estimate is far better than assuming that the costs are zero, as is now the case. For example, a forest in the upper reaches of a watershed may provide services such as flood control and the recycling of rainfall inland that are several times more valuable than its timber yield. Unfortunately for the environment, market signals do not reflect this, because the loggers who are cutting the trees do not bear the costs of the reduction in services. National economic policies and corporate strategies are based largely on market signals. The clearcutting of a forest may be profitable for a logging firm, but it is economically costly to society.

Another major failure of the market to provide reliable information comes when governments subsidize the depletion of resources or environmentally destructive activities. For instance, over several decades, the U.S. Forest Service used taxpayer money to build roads into national forests so that logging companies could clearcut them. This not only artificially lowered the costs of lumber and paper, it led to flooding, soil erosion, and the silting of streams and rivers. In the Pacific Northwest, it destroyed highly productive salmon fisheries. All of this destruction was underwritten by taxpayers.

In a world where the demands of the economy are pressing against the limits of natural systems, relying on distorted market signals to guide investment decisions is a recipe for disaster. Historically, when the supply of fish was inadequate, the price would rise, encouraging investment in additional fishing trawlers. When there were more fish in the sea than people could ever hope to catch, the market worked well. Today, with the fish catch often exceeding the sustainable yield, investing in more trawlers in response to higher prices will simply accelerate the collapse of these fisheries.

A similar situation exists with other natural systems, such as aquifers, forests, and rangelands. Once the climbing demand for water surpasses the sustainable yield of aquifers, the water tables begin to fall and wells go dry. The market says drill deeper wells. Farmers engage in a competitive orgy of well-drilling, chasing the water table downward. On the North China Plain, where 25% of the country's grain is produced, this process is under way. In Hebei Province, data for 1999 show 36,000 wells, mostly shallower ones, being abandoned during the year as 55,000 new, much-deeper ones were drilled. In Shandong Province, 31,000 shallow wells were abandoned and 68,000 deeper ones were drilled.

In an eco-economy, by definition one that respects...