Eco-Economy

This is an entirely different commentary on economics than we are used to from the last few months of economic chaos. This is a message about the need to integrate ecology into economics, on a large scale, in order to ensure an economy and a planet that both continue to thrive.

I've pulled information from the book "Eco-Economy: Building an Economy for the Earth" by Lester Brown. This is an extremely insightful book. I typically wouldn't recommend a book until I've finished it, but I've gained so much from just the first few chapters, I knew I had to get the word out.

Brown asserts that the economy is not and cannot be sustainable unless it operates with ecology and sustainability in mind. One of the best things he does to illustrate this is use the analogy of an endowment. It's particularly effective to me since I have some background in finance, and as I've been using it to explain sustainability to those unfamiliar with the concept, they all seem to appreciate this perspective.

So here it is: Basically, the earth's resources are like an endowment. Let's say you were going to live out the rest of your days funded by this endowment, which bears interest. You would need to take care not to deplete your principal, so that you may continue to generate an income living off the interest it yields. If you plan poorly, you will starve in the future as you shiver in a rotting box beneath the freeway. Honestly, how much are you looking forward to that?

So, the point is this, the earth can produce an array of resources for us to employ to our benefit in all areas of life. But, if we drain it dry and pollute it (or say, load up on Enron stock in our endowment) then we are screwing ourselves out of having a habitable planet.

Here is an excerpt from the first chapter:
"Transforming our environmentally destructive economy into one that can sustain progress depends on a Copernican shift in our economic mindset, a recognition that the economy is part of the earth's ecosystem and can sustain progress only if it is restructured so that it is compatible with it. The preeminent challenge for our generation is to design an eco-economy, one that respects the principles of ecology...It will have to be designed with an understanding of basic ecological concepts such as sustainable yield, carrying capacity, nutrient cycles, the hydrological cycle, and the climate system...In simplest terms, our fossil-fuel-based, automobile-centered, throwaway economy is not a viable model for the world. The alternative is a solar/hydrogen energy economy, an urban transport system that is centered on advanced-design public rail systems and that relies more on the bicycle and less on the automobile, and a comprehensive reuse/recycle economy. And we need to stabilize population as soon as possible. How do we achieve this economic transformation when all economic decisionmakers—whether political leaders, corporate planners, investment bankers, or individual consumers—are guided by market signals, not the principles of ecological sustainability? ...Everyone making economic decisions relies on market signals for guidance. The problem is that the market often fails to tell the ecological truth. It regularly underprices products and services by failing to incorporate the environmental costs of providing them...

We can build an eco-economy with existing technologies. It is economically feasible if we can get the market to tell us the full cost of the products and services that we buy. The question is not how much will it cost to make this transformation but how much it will cost if we fail to do it. Øystein Dahle, retired Vice President of Esso for Norway and the North Sea, observes, "Socialism collapsed because it did not allow prices to tell the economic truth. Capitalism may collapse because it does not allow prices to tell the ecological truth."

...Building an eco-economy is exciting and satisfying. It means we can live in a world where energy comes from wind turbines instead of coal mines, where recycling industries replace mining industries, and where cities are designed for people, not for cars. And perhaps most important of all, we will have the satisfaction of building an economy that will support, not undermine, future generations."

Brown's book is actually online here: http://www.earth-policy.org/Books/Eco_contents.htm

Read it read it read it.