Ecological Economics and Applied Problem Solving

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Ecological Economics and Applied Problem Solving
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What is Economics?

• The allocation of scarce resources among
  alternative desirable ends
• What are the desirable ends?
• What are the scarce resources?
• What is the nature of these scarce resources?
• How do we allocate?

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Transdisciplinarity

• We are dealing with the issues at the interface
  of two highly complex and interconnected systems
• Cant be understood from perspective of one
  discipline alone.
• Specific problem must determine appropriate
  methodologies, not vice versa.

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I. What are the Desirable Ends?
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Desirable Ends

• A high quality of life for this and future
  generations, which requires
• Ecologically sustainable scale
• Just distribution of resources within and between
  generations
• Efficient use of resources

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• II. What are the scarce resources?

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First law of thermodynamics

• Matter energy cannot be created or destroyed
• We cannot create something from nothing, nor
  nothing from something
• All economic production requires natural capital
• Continuous physical growth of the economy is
  impossible

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Second law of thermodynamics

• Entropy never decreases in an isolated system
• Things fall apart, wear out, become waste
• Irreversible, evolutionary, qualitative change
• There is only a finite stock of accumulated low
  entropy
• The ultimate limit to the physical size of the
  economic system is the low entropy provided by
  solar energy

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What is scarcer, natural or manmade capital?
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Conclusions

• The ultimate scarce resource is a finite supply
  of low entropy matter/energy
• It will not increase in response to price
  increases
• Natural capital has become the scarcest resource

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III. What are the market relevant characteristics
of scarce resources?
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Three important characteristics

• Ecosystem goods vs. ecosystem services
• Excludability can it be owned?
• If not, the market wont provide it
• Rivalness does it wear out when we use it?
• If not, the market shouldnt provide it

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Ecosystem goods

• Raw materials ecosystem structure
• Production material transformation
• Used up, not worn out use depletion
• Rate of flow can generally be controlled
• Characterized by risk

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Ecosystem services

• Structure generates function ecosystem services
• Not transformed into what it produces
• Spontaneously restored
• Rate of use cannot be controlled
• Characterized by uncertainty and ignorance

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So What?

• Raw material extraction depletes ecosystem
  services
• Waste output depletes ecosystem services
• Services from nature include life support
  functions
• We cannot treat ecosystem goods and services
  independently

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So How do We Allocate?
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When do markets work?
Excludable
Non-Excludable
Open Access Regime Oceanic fisheries,
timberetc. from unprotected forests, waste
absorption capacity
Market Good land, oil, timber, captured fish,
waste absorptioncapacity?
Rival
Potential market good but inefficient patented
information, e.g. energy efficiency, pollution
control tech.
Pure Public Good Information, most ecosystem
services, e.g. climate stability, coastline
protection, life support functions, etc.
Non-rival
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Macro-allocation
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Allocation of non-market goods

• Requires participatory democratic decision making
  process
• Just distribution therefore applies to political
  power as well as resources

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Case Study Conversion of Mangrove Ecosystems to
Shrimp Aquaculture
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Site location
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Project design

• Case study
• Developed in close collaboration with local
  partners
• NGOs ELAC, PRRM, Tambuyog, ISANet, APEX
• Local Government
• Community representatives
• Local University
• Multiple disciplines represented

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Desirable ends
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Quality of life

• For who?
• Local
• Indigenous community
• Tagabinet villagers
• Coastal fishing communities
• National seafood supply
• Global carbon sequestration, biodiversity
  preservation

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Scale and distribution

• 70 of mangroves in Philippines lost
• Intact mangroves provide public goods, common
  resources for community
• Shrimp aquaculture benefits owners and American
  consumers

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Working with Stakeholders

• Framing the problem
• Local knowledge
• Stakeholder values

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Scarce resources from ecosystem

• Ecosystem goods
• Building materials
• Food
• Ecosystem services
• Coastline protection
• Waste absorption
• Nursery

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from conversion

• Shrimp and fish for 3-5 years
• Less protein than intact ecosystem
• Massive waste output
• Irreversible(?) destruction of ecosystem

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Synthesis and Communication
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Leads to Action

• Press conference on site, with owners, community
  members, local government, representatives of
  federal government
• Illegal dikes torn down by community members

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and efficient allocation
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Useful Resource

• Applied Problem Solving in Ecological Economics
• Farley, Erickson and Daly, Island Press