“A great book which should wake up humankind!” –Klaus Schwab, World Economic Forum
Chapter 4. The Shape of the Eco-Economy: Introduction
In March 2000, at a briefing on State of the World 2000 for World Bank staff, I noted that proposed projects should help build an economy that is environmentally sustainable, not one that self-destructs. In response, someone said that the Bank always does an environmental assessment of its projects. But that's the problem, I replied. Environmental scientists are assessing the effects of projects after economists have decided which investments to make. At best, the scientists can suggest steps to ameliorate the environmental damage from the projects selected by economists.
What are the odds that an economist not trained in ecology will independently design projects that collectively will build an economy that is environmentally sustainable? Not very high. The same could be said of all leading economic decisionmakers—corporate planners, government policymakers, and investment bankers.
As noted in Chapter 1, an economy is sustainable only if it respects the principles of ecology. These principles are as real as those of aerodynamics. If an aircraft is to fly, it has to satisfy certain principles of thrust and lift. So, too, if an economy is to sustain progress, it must satisfy the basic principles of ecology. If it does not, it will decline and eventually collapse. There is no middle ground. An economy is either sustainable or it is not.
Today's global economy has been shaped by market forces, not by the principles of ecology. Unfortunately, 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 carbon, much less to the role of burning fossil fuels in creating the imbalance. For most economists, a rise in carbon dioxide (CO2) 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 level.
An eco-economy is one that satisfies our needs without jeopardizing the prospects of future generations to meet their needs, as the Brundtland Commission pointed out nearly 15 years ago. The purpose of this chapter is to provide a sense of what an eco-economy will look like. It also offers some sense of the scope of this change. It is not a trivial undertaking.1
1. World Commission on Environment and Development, Our Common Future (Oxford: Oxford University Press, 1987).
Copyright © 2001 Earth Policy Institute