Monday, 15 June 2009

Costing the Earth

personal note: The highlighteed white sentence below should worry people everywhere but especially in Australia and NZ. If you eat meat in those countries you are effectively munching your way through rainforests, dead orangutans, tigers, elephants, etc. Palm kernel is also imported into Australia to feed cattle.

see also

Rainforests destroyed and millions of animals killed to feed cows in Australia and New Zealand. Let's hope our friends in these countries will raise urgent objections. I would be interested to hear if anyone intends doing so.


Costing the Earth

Helen Harvey talks to some people who say we can't keep leaving the environment out of our economic calculations.

Taranaki Daily News New Zealand Last updated 21:04 15/06/2009


Continual growth versus finite resources - how does that work?

The world's economy is geared for continual growth. The world's resources are finite. You do the maths.

Some natural resources are already running out and others are damaged - think deforestation, fisheries depletion, air and water pollution, peak oil, climate change.

The constant push to grow the economy could end up costing the earth. Literally.

In New Zealand, more intense farming is having an effect on waterways and freshwater ecosystems. More than 90 per cent of the country's wetlands have been drained. Two out of the five species of whitebait are endangered, as are native longfin eels, which despite having the same ranking as kiwi, are commercially fished. Dams, such as the one at Patea, stop native fish migrating up the river. Rainforests in Malaysia are being decimated to provide, among other things, the palm kernel that Kiwi farmers feed to their cows.

And that list barely scratches the surface.

At least half of New Zealand's native fish species are on the threatened list because of impacts on streams from farming intensification, urban development and dams, Massey University environmental science/ecology senior lecturer Mike Joy says.

He is calling for a moratorium on commercial fishing of longfin eel.

"The reason the market is strong for it is because all the other eels in the world have gone extinct because they been overfished or they have the same pressures on fresh water [their habitat]. Here's an example where New Zealand is not learning from the rest of world and we're going to fish ours to extinction, too."

Commercial fishing isn't the only cause of the problem, he says. Other factors include the drainage of wetlands and swamps, river pollution, dams, weirs and culverts. But stopping the fishing is a start.

The iconic Kiwi whitebait is another species under threat.

"People all over the country take three months off work to go whitebaiting. If they have a good run, they can make a whole lot of money out of it - $100 a kilo. People make money out of endangered species."

And because of the intensification of farming in Southland and the West Coast wetlands are still being drained, Dr Joy says.

Wetlands are home to numerous fish and bird species and perform vital ecosystem services, such as improving water quality. They also help manage climate change. Peat bogs are year-round sinks of 2 to 5 tonnes of carbon per hectare, locking it up in their soil indefinitely.

And when it rains, wetlands reduce flood risks by absorbing water. Therefore, Dr Joy says, wetlands have an economic value - think of how much it costs to repair flood damage. But no one puts dollar values on intact ecosystems.

"Often the assumption is, if you take, say, a wetlands or a forest for farmland, the country is better off. Often that is not true - the opposite is true."

The same logic suggests building housing developments along the coast makes a community better off.

"But if you if leave [the area] alone, the ecosystems are still there to protect the lands from storms. But once you start developing those areas and get rid of dunes and protective areas, storms do a huge amount of damage inland.

"You could put a (dollar) value on the dunes that is way above what it is worth to turn [the land] into housing or farmland, because to leave it alone would protect the hinterland."

Hurricane Katrina is an example. About 1900 square miles of wetlands along the Louisiana coastline had been drained in the 100 years prior to the hurricane.

Had the wetlands been left intact, damage from the hurricane would have been considerably less. American ecological economist Robert Costanza has attempted to put a value on the hurricane protection provided by US coastal wetlands. He has estimated the storm-protection value of Florida's coastal wetlands at US$3190 per acre annually.

New Zealand Centre for Ecological Economics (NZCEE) principal ecological economist and deputy director Marjan van den Belt says, the services humanity get from ecosystems, which include natural resources such as oil and gas, are free.

"We don't put a number on those services. We don't consider it a capital, therefore it's not taken into account when we do decision-making."

Forests control erosion - that's a service provided by an ecosystem. If the forest is chopped down, especially on the steeper slopes, the soil ends up in the waterways, causing problems for the freshwater systems, she says.

"I personally think it is a good idea to take those impacts into account as well. [It] broadens the indicators you measure with to see if you are doing good or not good."

The current economic model is like driving a car and only looking at the speedometer and nothing else, such as where you are going or what's happening around you, Dr van den Belt says.

The economy is based on a neoclassical economic model that in principal calls for continuous growth. This growth is measured by GDP - gross domestic product.

And somewhere along the way, economic activity has become equated with well-being, so the wisdom is, the bigger the GDP, the better off society is supposed to be.

That might be a myth. Research done on people before a big lottery win and then again after, show that within a year, definitely within two years, the winners are back at the level of happiness they were before. People get used to things.

Economic growth is also touted as the only way to rid the world of poverty. But London's New Economics Foundation policy director Andrew Simms wrote in New Scientist magazine (October 18, 2008) that to get the world's poorest people on to an income of just US$3 per day would require 15 planets' worth of bio-capacity.

"In other words, we would have made Earth uninhabitable long before poverty is eradicated." He goes on to say: "It would take at least three Earths to sustain us if everyone had the lifestyle of people in the UK, five if we lived like Americans."

However, at the moment, growth is king and the call for economies to continue growing drowns out any concerns about the environment.

But another call is getting louder. The call to change the economic model to include effects on the environment. And the recession is seen by some as an opportunity to do that.

Earlier this year, United Nations Secretary-General Ban Ki-moon told the World Economic Forum in Switzerland that "climate change threatens all our goals for development and social progress . . . On the other hand, it also presents us with a gilt-edged opportunity. By tackling climate change head-on, we can solve many of our current troubles, including the threat of global recession."

The UN is calling for countries to adopt a Green New Deal. New Deal is what American President Franklin D. Roosevelt called the economic package he put together in the 1930s to haul the United States out of the Great Depression.

The Green New Deal aims to do the same thing, but with an emphasis on the environment.

The Chinese government has allocated about US$30.9 billion, out of a US$586 billion economic stimulus package to environmental projects. Time magazine, in its June 1, 2009, edition, says 30 years of "rapid, unchecked economic growth" has turned many of China's rivers into cesspools, lands into wastelands and "much of its air into grimy soup".

Closer to home, the New Zealand Government's initiative in last week's budget to provide $323 million over the next four years to insulate houses is a Green New Deal-type project.

Dr van den Belt says energy efficiency is a big one.

"Better insulated houses would help. There is economic activity associated with that and there are also certain savings when it comes to environmental impact. That's the type of thinking that needs to go on."

Erosion is a big problem and could be included in a New Zealand Green New Deal, she says.

"If you take away the natural vegetation and you build farms very close to the waterways, there is no vegetation that holds the soil in place and good rainfall washes the soil into the waterways."

The Green New Deal is a shift away from economic activity that is geared only towards growth. Instead, it is based around economic development.

Various names have been given to an economy that is not geared towards growth - steady state or zero growth are two of them.

There is a big debate among scientists around whether there has to be zero growth, Dr van den Belt says.

"If you start to value the ecosystems and the services you get from it and make it a legitimate part of your economy, it could actually grow."

Conventional economics says built capital, labour and land are the factors that produce goods and services. This is measured by GDP.

But what is left out of the equation is that economic activity is only possible because society is embedded in ecosystems, she says.

"So we prefer to look at the whole economy, which includes natural capital alongside built capital. If you really want to be serious, you can include social capital and human capital."

Ecosystem services, which at the moment are counted as free, are the natural capital component. It should be valued.

"It's outside the GDP way of looking at the world, but we still get those services. It'll be really terrible if we don't get those services anymore."

Wetlands, for example, take them away and society loses services such as water purifying and flood protection. Forests, especially those on slopes, perform erosion control. Now is a good time to look at new economic indicators, Dr van den Belt says.

"They need to do a major system overhaul and not just look at the speedometer, but look at other indicators as well."

At NZCEE, ecological economists are looking at different indicators. One of them, and there are several, is a genuine progress indicator, which looks at a number of things including social activities and environmental impact.

"It looks at the environment as a capital, as a resource. It looks at what kind of services we actually get for free from the environment."

Everyone is worried that changing the economic model will hamper their way of doing business, she says.

"In a way it will, it might become different. It's setting the container of how you can do business in a different way."