and potentially drastic ones, such as ocean acidification, sea level rise, increased
flooding or, by contrast, desertification, and so on.
Meanwhile, the challenge with complex systems is that they often have delays in
their feedback structures, depending on the available stocks of resources that can be
used, like credit, for a certain amount of time. In addition, the effects on one
resource or biophysical process are typically linked with other natural cycles and
may lead to accelerated feedback loops that have nothing to do with the original
human activities. This means that problems often only become visible or tangible
when it is no longer easy to put a halt to the damage they are causing. The linear
causality image of a kettle removed from a stove when it whistles is utterly misleading. MIT professor John Sterman and Harvard education expert Linda
Booth-Sweeney explain this “wrong mental model” in the context of climate
change. It assumes, they argue, that it will only
require short delays in all the links in a long causal chain, stretching from the detection of
adverse climate impacts to the decision to implement mitigation policies to emissions
reductions to changes in atmospheric GHG [Greenhouse Gas] concentrations to radiative
forcing to surface warming and finally to climate impacts, including changes in ice cover,
sea level, weather patterns, agricultural productivity, the distribution of species, extinction
rates, and the incidence of diseases, among others. None of these conditions hold: there are
long delays in every link of the chain (Sterman/Sweeney 2007: 214).
None of this can be captured by exchange value or market prices. The governance of nature requires multidimensional evidence instead of the typical monetized
cost–benefit analyses that are popular in policymaking. In those natural protection
measures, investment in education, extent of social welfare, etc., are judged by
quantifying their value in monetary terms. Equipped with those numbers one can
calculate when it is ‘economic’ to implement them. There are no general standards
as to how this conversion should be done, so it is down to the ethical judgments and
mind-set of the—often economics-trained—policy advisor: what is the monetary
value of a human life? How much should saving thousands of lives a year through
tougher pollution standards therefore be allowed to cost? When is it too expensive?
Whose competitiveness might be impacted by the higher costs of production?
When it comes to presenting the ‘evidence,’ numerical equations radiate the aura
of objectivity. But digging into what twenty-first century science tells us about
nature renders equations unsuitable for sound economic governance. Ecological
economists like Daly therefore demand a precautionary approach that starts from
the premise that certain functions of nature—some of its laws—cannot be duplicated by humans but are essential to the continuation of human prosperity on this
planet, at least for the foreseeable future. They determine the quantity of and rate at
which nature develops the low entropy resources that humans use. For example, the
humus in fertile soil that takes up to 2000 years to form, and the fossil fuels that
started forming 300 to 400 million year ago. Likewise the way that high entropy
waste in the form of emissions, chemicals and heat can be absorbed by plants, soil,
water, and so on.
Sustainability economics will need to embed the exchange value loop model in
the real world, argues Daly. During his time from 1988 to 1994 as a senior
86
3 Why the Mainstream Economic Paradigm Cannot Inform …
flooding or, by contrast, desertification, and so on.
Meanwhile, the challenge with complex systems is that they often have delays in
their feedback structures, depending on the available stocks of resources that can be
used, like credit, for a certain amount of time. In addition, the effects on one
resource or biophysical process are typically linked with other natural cycles and
may lead to accelerated feedback loops that have nothing to do with the original
human activities. This means that problems often only become visible or tangible
when it is no longer easy to put a halt to the damage they are causing. The linear
causality image of a kettle removed from a stove when it whistles is utterly misleading. MIT professor John Sterman and Harvard education expert Linda
Booth-Sweeney explain this “wrong mental model” in the context of climate
change. It assumes, they argue, that it will only
require short delays in all the links in a long causal chain, stretching from the detection of
adverse climate impacts to the decision to implement mitigation policies to emissions
reductions to changes in atmospheric GHG [Greenhouse Gas] concentrations to radiative
forcing to surface warming and finally to climate impacts, including changes in ice cover,
sea level, weather patterns, agricultural productivity, the distribution of species, extinction
rates, and the incidence of diseases, among others. None of these conditions hold: there are
long delays in every link of the chain (Sterman/Sweeney 2007: 214).
None of this can be captured by exchange value or market prices. The governance of nature requires multidimensional evidence instead of the typical monetized
cost–benefit analyses that are popular in policymaking. In those natural protection
measures, investment in education, extent of social welfare, etc., are judged by
quantifying their value in monetary terms. Equipped with those numbers one can
calculate when it is ‘economic’ to implement them. There are no general standards
as to how this conversion should be done, so it is down to the ethical judgments and
mind-set of the—often economics-trained—policy advisor: what is the monetary
value of a human life? How much should saving thousands of lives a year through
tougher pollution standards therefore be allowed to cost? When is it too expensive?
Whose competitiveness might be impacted by the higher costs of production?
When it comes to presenting the ‘evidence,’ numerical equations radiate the aura
of objectivity. But digging into what twenty-first century science tells us about
nature renders equations unsuitable for sound economic governance. Ecological
economists like Daly therefore demand a precautionary approach that starts from
the premise that certain functions of nature—some of its laws—cannot be duplicated by humans but are essential to the continuation of human prosperity on this
planet, at least for the foreseeable future. They determine the quantity of and rate at
which nature develops the low entropy resources that humans use. For example, the
humus in fertile soil that takes up to 2000 years to form, and the fossil fuels that
started forming 300 to 400 million year ago. Likewise the way that high entropy
waste in the form of emissions, chemicals and heat can be absorbed by plants, soil,
water, and so on.
Sustainability economics will need to embed the exchange value loop model in
the real world, argues Daly. During his time from 1988 to 1994 as a senior
86
3 Why the Mainstream Economic Paradigm Cannot Inform …