Design Insights on the Natural Capital Debate

Design Insights for the
Natural Capital Debate
Dr. Joanna Boehnert
EcoLabs UK
July 2015

Contents
1. EcoLabs + design theory
2. the design and the etymology of:
a. natural capital
b. ecosystem services
4. economic approaches to the environment
5. problems with natural capital
a. philosophical
b. methodological
c. political
6. strategies
7. conclusion

THE STEADY STATE ECONOMY
A Totem of Real Happiness
©2009AngelaMorelliforECO-LABS.org|Source:LifeinalandwithoutgrowthNewsScientistMagazineIssue2678

Cheap energy made industrial development
possible. One barrel of crude oil contains, in
energy terms, the equivalent to the heavy
manual labour of 12 people working for one year.
As easily accessible fossil fuel supplies diminish,
the era of cheap energy is ending. One way to
understand the consequences of energy scarcity
is by measuring EROI, i.e. ‘Energy Return On
Investment’. In the 1900s EROI was between
100:1 – 50:1. Energy from renewables and
unconventional fossil fuels have much lower
EROIs; for example the Tar Sands have a EROI of
as little as only 3:1. An integrated audit of
development that includes energy issues
indicates that the current model of development
has created dangerous vulnerabilities in its
reliance on fossil fuel.
159Lt
One barrel of crude oil, containing 159
litres, is equivalent to the heavy manual
labour of 12 people for one year.
VS4 million wind turbines could
replace fossil fuels usage globally -
20 million cars are produced every
year so it is technically possible.
Global fossil fuels subsidies amounted to $523
billion in 2011, up almost 30% on 2010 - this is
six times more than subsidies to renewables,
and up 30% from 2010.
THE BALANCE SHEET FOR
GROSS GLOBAL PROSPERITY
Energy Return on Energy Investment
EROI in the 1900s = 100:1 – 50:1
EROI in the tarsands = 5:1 – 3:1
EROI estimated to be necessary for ‘civilisation’
to sustain itself = 5:1
All expansionary phases of the US economy occurred
during times of low energy prices.
*
Energy use (kg of oil equivalent per capita)
World = 1851
USA = 7069
EU = 3412
Low Income countries = 363
Percentage of total energy consumption
that is based on fossil fuels
World = 80%
USA = 83%
EU = 75%
Low income countries = 29%
JZ1122

The Earth’s ability to provide an accommodating
environment is undermined by our activities.
The Earth is our life-supporting system. Despite
this basic fact, measured in biophysical terms,
the planet is shrinking due to human
interventions. Over the past forty years the Living
Planet Index (an indicator of the state of
biodiversity) has fallen by 30% in northern
countries and fallen by 60% in the tropics. During
this time there has been a doubling of demands
on natural systems. Assessing the capacity of the
ecological system to continue to provide
favorable conditions for civilization must be part
of an audit of development.
Ecological systems have thresholds that can
lead to sudden collapse. Nine planetary
boundaries are central to avoid crossing critical
tipping points. Three boundaries have already
been transgressed: climate change, the rate of
biodiversity loss and the global nitrogen cycle.
The Anthropocene is a new geological age
2/3 ecosystems are exploited
beyond their capacity
BIODIVERSITY LOSS
NITROGEN FLOW
PHOSPHORUS FLOW
CLIMATE CHANGE
OZONE DEPLETION
ATMOSPHERIC AEROSOL LOAD
OCEAN ACIDITY
FRESHWATER CONSUMPTION
CHEMICAL POLLUTION
AGRICULTURAL LAND USE
PLANETARY BOUNDARIES
Biodiversity has been fallen by a rate of 30%
in northern countries and 60% in the tropical
world over the past 40 years.
97-98% of scientists agree climate
change is caused by humankind
THE BALANCE SHEET FOR
GROSS GLOBAL PROSPERITY
characterized by dynamics where our industrial
patterns are a force dramatically effecting
natural, biophysical and geological processes.
The Earth is the foundation for substance, but
an ecological audit indicates that the model of
development is now so dysfunctional that
human survival is at stake.
JZ1122

Introduction
A green economy (according to the UNEP) is
one that results in:“improved human well-being
and social equity, while significantly reducing
environmental risks and ecological scarcities”.
More simply,“a green economy is low-carbon,
resource efficient, and socially inclusive”.
UNEP 2011

This sounds great! Are we finally
going to see green economic
policies put into practice?

Civil society responded to the ‘Green Economy’ proposals at Rio+20 with a plethora
of critical responses:
• condemning what they claimed amounted to the corporate capture
of the United Nations (Joint Civil Society Statement, 2012)
• condemning the UN’s ‘Natural Capital Declaration’ (Banktrack, 2012)
• condemning 20 years of Greenwash (Bruno, 2012)
• condemning the entire ‘green economy’ project (Nadal, 2012; Brand,
2012; Patel and Crook, 2012).
• The Indigenous People’s Global Conference on Rio+20 and Mother
Earth issued a strongly worded ‘Kari-Oca 2 Declaration’ declaring the
UNEP’s green economy as ‘a continuation of colonialism’ firmly reject-
ing market-based solutions, REDD and intellectual property rights over
genetic resources and traditional knowledge.

The project relies on two core concepts:
1) ‘natural capital’
2) ‘ecosystem services’
£1.8 billion

Natural Capital
The metaphor of ‘natural capital’ was first used
by E.F. Schumacher in Small Is Beautiful (1973).
In the 1990s the World Business Council for
Sustainable Development transformed the idea:
“...addressing the challenge of achieving global
sustainability, we must apply the basic principles of
business.This means running “Earth Incorporated” with
a depreciation, amortization and maintenance account”
Maurice Strong, WBCSD, 1994

Ecosystem Service
While the concept of an ‘ecosystem’ was first
used in 1935 by Arthur Tansley.
The theory of ‘ecosystem services’ was
not formalised until the publication of the
United Nations 2005 Millennium Ecosystem
Assessment.

Ecosystem Service
While the idea can be a useful learning tool, its
reduction of ecology into services that are helpful to
humans instrumentalises ecological relations.
This becomes a problem especially when ecosystem
services are used as a component of market processes
– as opposed to the context in which markets are
enabled to exist.

Ecosystem Service
Larry Lohmann:
...with all ecosystem services markets, the first step
[is] to simplify and quantify the ecological functions
in question, so that standardized increments of
“environmental improvement” could be traded for
standardized bits of “environmental destruction”.
2011

ecosystemservice
markets
nature
natural
capital
ecology
conceptions of
human-natural
relations
economics
eco
systemscience
ecosystem services
capitalism

In naming its programme the ‘green economy’ the
UNEP implies a reframing of the entire economy
along green lines. This will be done in ways that
reflect specific policy prescriptions of environmental
economics and ecological economics.

Since green economics is a field with radically
different policy prescriptions to what is proposed,
the naming of the new project creates severe
confusion with contested definitions of the
‘green economy’.
The ‘green economy’ is
not ‘green economics’?!

neo-classical /
neo-liberal
environmental ecological green
economics
eco-socialist
assumptions
value-neutral
+ composed
of universal,
unchanging laws
bringing the
environment
into economic
theory
committed to
steady state
economics
local, social,
political and
qualitative
the market will
always attempt
to exploit the
environment
attitude towards
planet
a source
of scarce
resources for
the economy
a source for
scarce resources
and a sink for
pollution
the system
in which the
economy is
embedded
as a subsystem
the context
of human
existance
the context
of human
existance
sees the
environmental
crisis as...
inconsequential
concern or
an opportunity
a result of
market failure
a result of
regulatory
failure
a result of
the dismal /
denial of
nature
a result of
capitalism
principle concept efficiency of
markets
scarcity +
efficiency of
markets
precautionary
stance
quality commodity
policy impulse market market regulation /
market
participatory
politics
participatory
politics
Economic Approaches to the Environment

Problems
1. Philosophical
2. Methodological
3. Political

ecological
system
Conceptions of human-natural relations:
A hierarchy of systems
economic
system
social
system
A. ecological
supports
supports
A is the context for B and C.
A existed before and will
exist after both B and C.
B and C must regulate their
activities according to A’s
dynamics, not vice versa.
is dependent on A & B
B. social
C. economic
C
B
A

2) Methodological Problems
£280£280£260£220
Econopoly
Fig Treessparrows Starﬁsh
Canadian
Beaver

Here the global gross domestic product (GGDP) is illustrated as $63,000bn and
the value provided by the Earth to the global economy is $50,800bn.
Costing the Earth by Information is Beautiful Studio (2011). London:The Prince’s Accounting for Sustainability.

3) Political Problems
£280£280
Fig Treesows Starﬁsh

Conclusion
To press non-economic values into the framework of the economic Cal-
culus… it is a procedure by which the higher is reduced to the level of
the lower and the priceless is given a price. It can therefore never serve
to clarify the situation and lead to an enlightened decision.All it can do
is lead to self-deception or the deception of others; for to undertake to
measure the immeasurable is absurd and constitutes but an elaborate
method of moving from preconceived notions to foregone conclusions…
The logical absurdity, however, is not the greatest fault of the undertak-
ing: what is worse, and destructive of civilisation, is the pretence that
everything has a price or, in other words, that money is the highest of all
values.
E.F. Schumacher 1973, p. 27

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Design Insights on the Natural Capital Debate

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