From:_ JStuartD1 To:_ steadystaters@googlegroups.com

Subject:_ No Global Industry Is Profitable If Natural Capital Is Accounted For

Date:_ Wed, 24 Apr 2013 15:41 -0400 (EDT) (25/04/13 07:41 NZST)

On Grist.org - 17 Apr 2013 2:42 PM

None of the world’s top industries would be profitable if they paid for the natural capital they use

By David Roberts

The notion of “externalities” has become familiar in environmental circles. It refers to costs imposed by businesses that are not paid for by those businesses. For instance, industrial processes can put pollutants in the air that increase public health costs, but the public, not the polluting businesses, picks up the tab. In this way, businesses privatize profits and public-ize costs.

While the notion is incredibly useful, especially in folding ecological concerns into economics, I’ve always had my reservations about it. Environmentalists these days love speaking in the language of economics — it makes them sound Serious — but I worry that wrapping this notion in a bloodless technical term tends to have a narcotizing effect. It brings to mind incrementalism: boost a few taxes here, tighten a regulation there, and the industrial juggernaut can keep right on chugging. However, if we take the idea seriously, not just as an accounting phenomenon but as a deep description of current human practices, its implications are positively revolutionary.

To see what I mean, check out a recent report [80 page PDF] done by environmental consultancy Trucost on behalf of The Economics of Ecosystems and Biodiversity (TEEB) program sponsored by United Nations Environmental Program.
TEEB asked Trucost to tally up the total “unpriced natural capital” consumed by the world’s top industrial sectors. (“Natural capital” refers to ecological materials and services like, say, clean water or a stable atmosphere; “unpriced” means that businesses don’t pay to consume them.)

It’s a huge task; obviously, doing it required a specific methodology that built in a series of assumptions. (Plenty of details in the report.) But it serves as an important signpost pointing the way to the truth about externalities.

Here’s how those costs break down:

The majority of unpriced natural capital costs are from greenhouse gas emissions (38%), followed by water use (25%), land use (24%), air pollution (7%), land and water pollution (5%), and waste (1%).

So how much is that costing us? Trucost’s headline results are fairly stunning.

First, the total unpriced natural capital consumed by the more than 1,000 “global primary production and primary processing region-sectors” amounts to $7.3 trillion a year — 13 percent of 2009 global GDP.

(A “region-sector” is a particular industry in a particular region — say, wheat farming in East Asia.)

Second, surprising no one, coal is the enemy of the human race. Trucost compiled rankings, both of the top environmental impacts and of the top industrial culprits.

Here are the top five biggest environmental impacts and the region-sectors responsible for them:

UNEPClick to embiggen.

The biggest single environmental cost? Greenhouse gases from coal burning in China. The fifth biggest? Greenhouse gases from coal burning in North America. (This also shows what an unholy nightmare deforestation in South America is.)

Now, here are the top five industrial sectors ranked by total ecological damages imposed:

UNEPClick to embiggen.

It’s coal again! This time North American coal is up at number three.

Trucost’s third big finding is the coup de grace. Of the top 20 region-sectors ranked by environmental impacts, none would be profitable if environmental costs were fully integrated. Ponder that for a moment. None of the world’s top industrial sectors would be profitable if they were paying their full freight. None!

That amounts to an entire global industrial system built on sleight of hand. As legendary environmentalist Paul Hawken put it, “We are stealing the future, selling it in the present, and calling it GDP.”

This gets back to what I was saying at the top. The notion of “externalities” is so technical, such an economist’s term. Got a few unfortunate side effects, so just move some numbers from Column A to Column B, right?

But the UNEP report makes clear that what’s going on today is more than a few accounting oversights here and there. The distance between today’s industrial systems and truly sustainable industrial systems — systems that do not spend down stored natural capital but instead integrate into current energy and material flows — is not one of degree, but one of kind. What we need is not just better accounting, it is a new global industrial system, a new way of providing for human wellbeing, a new way of relating to our planet. We need a revolution.

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Posted by davd at 10:34 NZD

Updated: Monday, 29 April 2013 14:25 NZD

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I've visited-as-a-tourist or lived in 25 separate countries, on 46 occasions - David MacClement

Posted by davd at 08:51 NZD

Updated: Thursday, 4 April 2013 13:57 NZD

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For those who spent this year’s mild winter worrying about how incredibly hot the summer would be, recent damages to crops and homes should come as little surprise. Although the abnormally early spring delivered some benefits—such as one of the best blue crab seasons in a long time—they will be largely outweighed by the costs inflicted by the historic drought that is currently plaguing most of the United States, with particularly dire consequences in agricultural states.p>

The word “historic” is not an exaggeration: the 12 months running from June 2011 to June 2012 are the warmest on record, and more than two thirds of U.S. farms are in drought conditions, a magnitude that has not been experienced since 1956 and is nearing Dust Bowl-like proportions.

Amid fluctuating rain patterns and crop price speculation, one trend is already emerging: we can expect higher food prices worldwide starting next year, and perhaps as early as this autumn. The Climate Desk, a journalistic collaboration focused on climate change, recently published a helpful estimate of how some basic foods could be affected by 2013. For instance, a 20-ounce loaf of white bread would go from an average price of $1.81 to $1.96; a whole chicken would sell at $4.91, compared to the 2011 average of $4.52.

Overall, foods relying heavily on corn and soy for their production would experience a 3 to 5 percent price increase. That might seem like a relatively small share, but it can add up to a significant amount for the average U.S. family. Consequences could also be felt outside of the country. Although the droughts have not significantly affected rice and wheat (the main crops that were affected during the 2007 and 2010–11 food crises), U.S. corn and soy are imported by many countries worldwide, and substitution effects might cause these scarcities to put pressure on other food crops.

Among climate scientists, there is little doubt that the drought is linked to climate change. In discussions about recent wildfires in Colorado, most experts have talked in probabilities and scenarios, explaining that, even though it is hard to link one particular event to human-caused climate disruption, “this is what climate change looks like”: wildfires, heat waves, droughts, floods, and storms. These extreme weather events are becoming increasingly likely as climate change intensifies as a result of ever-rising greenhouse gas emissions.

In these “I-told-you-so” times, public opinion is already shifting quickly: more than 70 percent of Americans now believe that climate change is occurring. Although it’s not certain whether this belief will remain strong during, say, a randomly cold winter, we must wonder what the current drought tells us about how human societies will evolve amid a disrupted and unpredictable climate.

http://necsi.edu/research/social/img/fig1_crises.png

Though the roots of protests and revolts are often very deep,   high food prices have, at times, played a key role (Source: NECSI)

Take, for instance, the interesting link that was recently pointed out between extreme weather, food prices, and political instability. The New England Complex Systems Institute published a fairly convincing graph correlating the number of protests worldwide to fluctuations in the global food price index (see right). The analysis came after many comments from Middle East experts, who qualified the 2010 food crisis as the spark that ignited the Arab Spring.

What this tells us, if we didn’t know it already, is that our societies are more interdependent than ever, starting with our agricultural system. India, Thailand, and Vietnam export nearly 70 percent of the world’s rice. The United States alone accounts for more than 20 percent of global wheat exports, the rest being supplied by the EU-27, Russia, Canada, Australia, and a handful of other countries. And, quite relevantly in the current drought, the United States produces more than a third of the world’s corn and soy, both major sources of animal feed stock.

Of course, food-related crises and riots could be seen as healthy manifestations of a system’s effort to self-regulate: people eat fewer resource-intensive animal products, importers turn to other players for cheaper and more reliable supplies, and nations topple tyrants. But gradual change is generally stronger, and more sustainable, than brutal change. The problem is that even in relatively stable countries, with functioning democracies, this gradual change is sometimes hard to bring about.

In the case of the U.S. Midwest, for instance, farmers benefit from generous crop insurance funds to cover the losses in corn and soy, and these benefits have only increased under the latest Farm Bill. However, as the Institute for Agriculture and Trade Policy reports, “acknowledgement of increased risk for agriculture has not been coupled with any specific acknowledgement of its primary cause—climate change—or of farmers’ need to take steps to make their cropping systems more resilient to extreme weather.” In short, farmers are financially encouraged to do more of the same, despite rapidly deteriorating conditions, and at a hefty cost to taxpayers. In a particularly absurd move, some are now proposing to fund this year’s crop insurance by cutting into conservation programs.

It would be easy to marvel at the fact that an intensely exploited portion of U.S. land has been feeding much of the world for decades. In the face of unprecedented environmental change, however, it is also necessary to take an honest look at a system that distorts the global market, nurtures dependence, and creates vulnerability. Worldwatch’s Nourishing the Planet program recently highlighted 12 agricultural innovations to improve drought resilience. Ranging from agroforestry to rotating crops and “Meatless Mondays,” some of these innovations come from other countries, and all of them emphasize one thing: diversity. Diversity in plants, in farming practices, in protein sources, and, I would add, diversity in producing countries.

Both the European Union and the United States will have trouble maintaining their subsidies and insurances in the midst of climate disruptions and slow economic recovery, and cutting into conservation funds to pay the bill would be spectacularly misguided. Innovations gathered by Worldwatch tell a different story: as nations start looking elsewhere for new crops, concentrated, subsidized agricultural systems should start looking elsewhere for new ideas.

Antoine Ebel is a Climate and Energy intern at the Worldwatch Institute.

Posted by davd at 20:44 NZD

Updated: Saturday, 25 August 2012 21:17 NZD

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David MacClement's essay, 3 August 1995:
When there are Too Many People for Too Few Jobs

"What do people do with their time
(now that there's too few jobs for too large a number of people)"?

The usual answer seems to be a combination of life-long education and the creation of enough service-industry jobs to provide at least the semblance of busy-ness for the 50% more|` people wanting work, even if they don't get _paid_ enough to live as a full member of their society.
I don't think yhe 'ordinary joe', capable or skilful with his hands and strong when necessary, will be suitable for, or get significant satisfaction out of, such "people-skills" jobs, let alone be interested in success at academic study. We're talking here of what in all past ages was called: hard, satisfying work. There just won't be anything like enough work to go around, for the huge numbers of people wanting it [at recent world population|+ growth rates].

So what will people do with their time?

In the first place, when consumption is reduced by 50% and (slightly-higher-priced) longer-lasting equipment is bought, the money needed by each person is also reduced, perhaps by 40% (0.40) in constant dollars. So the same [national] salary-and-wages bill could be spread over 67% more people {1/(1 -0.40)}, as part of the change to sustainability. { If the present jobs were split up and redistributed among 'only' 50% more workers in ~25 years, this would imply a real wage rise of 33% (67% / 50%), or 1.15% per year increase http://www.wolframalpha.com/input/?i=%281%2B0.0115%29^25 }

Secondly, assuming such a neat answer doesn't apply to most of the excess people in the world, for example that the rich & powerful continue grabbing all they can, then most of the excess [people] will have to reduce their activities whether they wish to or not.
Are 'couch-potatoes' ([though] eating a lot less as well) a good thing?
[Should the nation's rulers supply] "Bread and circuses"?|~

Draft, paper found Ja.2012 prob. by IBM Selectric typewriter (typeball): http://en.wikipedia.org/wiki/IBM_Selectric_typewriter#Selectric_III

_Footnotes_:

_|*: Greenhithe, "B" in map: http://tinyurl.com/NthnBuswayToGreenhthWalk

_|^: Skil brand, portable circular saw http://en.wikipedia.org/wiki/Skil

_|`: pick "Region Search", World, 1995 then 2034, in: http://to.ly/bQyo
http://www.census.gov/population/international/data/idb/informationGateway.php
1995 5,703,456,064
2034 8,573,974,015 - 50% more than 1995.

_|+: World population: http://en.wikipedia.org/wiki/World_population

_|~: Bread and Circuses: http://en.wikipedia.org/wiki/Bread_and_circuses

Posted by davd at 18:07 NZT

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