Green revolution in economics. . - Books - book review

Sierra, July-August, 2002 by Bob Schildgen

We need a revolution in economics as radical as the Copernican in physics, warns World-watch Institute founder Lester Brown in Eco-Economy: Building an Economy for the Earth, W. W. Norton, $15.95. (See "Power Lunch," page 28.) Commercial activity has long been the center of economists' attention, with nature left outside most calculations. But now that we have strained, drained, and poisoned the environment more severely and extensively than any time in history, says Brown, our economic universe must be turned inside out, so that we recognize that without the labor of nature at the center, an economy cannot survive. Emphasizing that an economy is sustainable "only if it respects the principles of ecology," Brown cites the environmental causes of the downfall of civilizations from ancient Sumeria to the Mayan empire to Easter Island, noting: "The Sumerians did not know that the New World even existed, much less that it would one day support flourishing civilizations.... The Mayans had no idea that Easter Island existed." The crucial difference between today's world and the past is that "each of these civilizations collapsed in isolation, with no effect on the others. But today, in an integrated global economy, a collapse in one country or region will affect all of us."

Finding hope in the fact that the Earth-centered approach is already developing, Brown discusses new, Earth-friendly technologies such as wind power that are proving profitable. He cites innovative economists, including a half-dozen Nobel Prize-winners, who assign value to "ecosystem services," making it possible to literally book swamps, prairies, and deserts as productive assets. Once nature has a line on an accounting sheet, it is easier to protect in a profit-centered society. If, for example, a forested region retains and filters water, economics can price its environmental service in terms of cost of water storage and purification systems.

Precisely this example is used in The New Economy of Nature: The Quest to Make Conservation Profitable, by Gretchen C. Daily and Katherine Ellison, Island Press, $25. Among the many applications of eco-economics explored by Stanford University research scientist Daily and Pulitzer Prize--winning journalist Ellison is that of cleaning New York City's water supply. Faced with the $8.5 billion cost of constructing a new water purification system, the city determined (after intense political debate) it would be cheaper to protect the vast upstate watershed. This meant allowing the ecosystem itself to do the purification--as it had before intense farming and development overloaded it. The city committed $1.5 billion to protecting land and constructing new storm sewers and septic systems, while also helping farmers limit effluent from their operations.

Eco-economic case studies in The New Economy range from discussions of emissions-trading schemes to assessing the value of uncultivated land as a refuge for native bees that perform multibillion-dollar crop pollination services. The new approach also demands payments for external costs. For example, a tax on polluting emissions is actually a fee to pay for using the atmosphere as a dump, because such use has definite costs in terms of health and environmental impacts.

Cradle to Cradle: Remaking the Way We Make Things, by William McDonough and Michael Braungart, North Point Press, $25, expands on McDonough's arguments in this issue (see "Power Lunch," page 28) that economic growth won't harm the environment if it imitates natural growth. In nature, everything is constantly recycled or even "upcycled," say McDonough, the audacious architect who designed the roof gardens for Chicago's city hall, and Braungart, a chemist and founder of the group that became Germany's Green Party. For them, environmental problems are essentially design problems. "Nature doesn't have a design problem. People do," they assert. From C[O.sub.2] to Palm Pilots, all production could be designed for total re-entry into the manufacturing cycle without damage. To prove their point, Cradle to Cradle is made from plastic resins and inorganic fillers, which the authors call "technical nutrients" that can be "broken down and circulated infinitely in industrial cycles--made and remade as `paper' or other products--without loss of quality or damage to our environment or ourselves."

Wild Solutions: How Biodiversity Is Money in the Bank, by Andrew Beattie and Paul R. Ehrlich, Yale University Press, $25.95, outlines yet another aspect of ecosystem accounting, by recognizing the value of solutions to technical and medical problems that may reside in the staggering diversity of Earth's estimated 5 to 10 million species, only 1.5 million of which have even been identified. Like Mark J. Plotkin in Medicine Quest, biologists Beattie and Ehrlich provide intriguing explanations of the role of natural substances in medicine, pest control, and even manufacturing. Explaining these "wild solutions," Beattie and Ehrlich enter mysterious microfaunal worlds of bacteria visible to the naked eye or fungi that generate such force in cracking a beetle's tough exoskeleton that one spore "could lift a school bus with ease" if it were the size of a hand. In the process, they create some inspiring and downright reverent descriptions of insect communities. Speculating on the evolution of a powerful antiseptic in ants' glands, they observe that "the research and development time has been approximately 60 million years, millions of prototypes have been tested, and the entire research and development program was free." This is a huge leap from merely pricing raw materials. In this model, values are assigned not to a commodity, but to something immaterial--nature's own scientific knowledge.