Ecological Economics:creating a sustainable and

desirable futureRobert CostanzaGordon and Lulie Gund Professor of Ecological Economics and Director, Gund Institute of Ecological EconomicsRubenstein School of Environment and Natural ResourcesThe University of VermontBurlington, VT 05405 www.uvm.edu/giee

Practical Problem SolvingRequires the Integration of:

• Visiona. How the world worksb. How we would like the world to be

• Tools and Analysisappropriate to the vision

• Implementationappropriate to the vision

Full World Full World AnthroposphereAnthroposphere

MarcImhoffBiosphericSciencesBranch

NASA

OIL AND GAS LIQUIDS 2004 ScenarioUpdated by Colin J. Campbell, 2004-05-15

Net Energy from Oil and Gas Liquids

Now

Atmosphere

Source: Stern review on the economics of climate change, 2006

What is “theeconomy” andwhat is it for?

Labor

Land

EconomicProcess

GoodsandServices

CulturalNorms andPolicy

IndividualUtility/welfare

Consumption(based on fixedpreferences)

Improvement

Education, Training,Research

Building

Investment(decisions about, taxesgovernment spending,education,science andtechnologypolicy, etc., basedon existing propertyrights regimes)

Property rights

Private Public

GNP

Manufacturedcapital

”Empty World" Model of the Economy

Perf

ect

Subs

titut

abilit

yBe

twee

n Fa

ctor

s

EmptyWorldEnergy

Planning?

Alabama Power’s motto:“Always on”

“With Electricity pricesat least 15% below thenational average, whynot?

Human Capital EconomicProductionProcess

GoodsandServices

EvolvingCulturalNorms andPolicy

Well Being(Individual andCommunity)

Consumption(based on changing,adaptingpreferences)

Education, training,research.

BuildingInvestment(decisions about, taxescommunity spending,education, science andtechnology policy, etc., basedon complex propertyrights regimes)

Individual Public

GNP

Wastes

Common

Ecologicalservices/amenities

having, being

- having,- being

negative impacts on all forms of capital

being, doing, relating

Restoration,Conservation Natural Capital

ManufacturedCapital

having

positive impacts on human capital capacity

doing, relatingComplex propertyrights regimes

SolarEnergy

SocialCapital

Lim

ited

Subs

titut

abilit

yBe

twee

n Ca

pita

l For

ms

“Full World” Model of the Ecological Economic System

Waste heat

Institutionalrules, norms, etc.

Materially closed earth system

From: Costanza, R., J. C. Cumberland, H. E. Daly, R. Goodland, and R. Norgaard. 1997. AnIntroduction to Ecological Economics. St. Lucie Press, Boca Raton, 275 pp.

Ecological Economics

Integrated Questions/Goals:• Ecologically Sustainable Scale • Socially Fair Distribution • Economically Efficient Allocation

Methods:• Transdisciplinary Dialogue • Problem (rather than tools) Focus • Integrated Science (balanced synthesis & analysis) • Effective and adaptive Institutions

oikos = “house”logy = “study or knowledge”nomics = “management”

Literally: management of the house(earth) based on study and knowledge ofsame

See: Costanza, R., J. C. Cumberland, H. E. Daly, R. Goodland, and R. Norgaard. 1997. An Introduction toEcological Economics. St. Lucie Press, Boca Raton, 275 pp.

Some key questions:•What are humanity’s shared goals?•What is quality of life (QoL) and how dowe achieve and sustain it?•How do natural, social, built and humancapital contribute to QoL?•How do cultures evolve?•What drives human behavior?•How do we manage human affairs toachieve our shared goals?

HumanNeedsSubsistenceReproductionSecurityAffectionUnderstandingParticipationLeisureSpiritualityCreativityIdentityFreedom

SubjectiveWell-Being(happiness,utility, welfare)for individualsand/or groups

Quality of Life

Opportunitiesto meet humanneeds, now andin the future(Built, Human,Social, andNatural Capitaland time)

PolicyEnvision-ing, evolv-ing socialnorms

How

Needs

are

Met

How

Need

Fulfillment

is Perceived

Quality of Life (QOL) as the interaction of human needs and thesubjective perception of their fulfillment, as mediated by the

opportunities available to meet the needs.

From: Costanza, R., B. Fisher, S. Ali, C. Beer, L. Bond, R. Boumans, N. L. Danigelis, J. Dickinson, C. Elliott, J. Farley, D. E. Gayer, L.MacDonald Glenn, T. Hudspeth, D. Mahoney, L. McCahill, B. McIntosh, B. Reed, S. A. T. Rizvi, D. M. Rizzo, T. Simpatico, and R. Snapp.2006. Quality of Life: An Approach Integrating Opportunities, Human Needs, and Subjective Well-Being. Ecological Economics 61: 267-276

The key isdeveloping a

betterunderstanding

of theopportunities

to create asustainable

future with ahigh quality of

life

More realistic vision of human behavior

• Multiple motivations (personality types, culture, etc.)• Limited knowledge and “rationality”• Evolving preferences• Satisfaction based on relative, rather than absolute, consumption, plus a host of “non-consumption” factors• Central role of emotions in decision- making and evading social traps• Embedded in multiscale, complex, adaptive, systems

Phineas Gage

Well-being vs. GNPConvergence zone

Observed Life Satisfaction versus Predicted Life Satisfaction

R2 = 0.7241

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

Predicted Life Satisfaction

Ob

se

rv

ed

L

ife

S

atis

fa

ctio

n

Ghana

China PhilippinesNigeria India

Bangladesh

LS = .78*HDI + .26*NCI + ?

From: Vemuri, A. W. and R. Costanza. 2006. The Role of Human, Social, Built, and Natural Capital inExplaining Life Satisfaction at the Country Level: Toward a National Well-Being Index (NWI). EcologicalEconomics (in press).

Predicted Life Satisfaction (LS)

Life Satisfaction Human Development Index(Index of Built and

Human Capital)

Natural Capital Index(based on value of

Ecosystem Services

No Social Capital Index

Goal

BasicFramework

Non-environmentallyadjusted measures

Environmentallyadjusted measures

AppropriateValuationMethods

___________

Marketed

value ofmarketed goods

and servicesproduced and

consumed in aneconomy

GNP(Gross National

Product)

GDP(Gross Domestic

Product)

NNP(Net National Product)

NNP’(Net National Product

including non-produced assetts)

Market values

EconomicIncomeWeak

Sustainability

1 + non-marketed goods

and servicesconsumption

ENNP(Environmental NetNational Product)

SEEA(System of

EnvironmentalEconomic Accounts)

1 + Willingnessto Pay BasedValues (see

Table 2)

___________

StrongSustainability

2 + preserveessential natural

capital

SNI(Sustainable National

Income)

SEEA(System of

EnvironmentalEconomic Accounts)

2 + ReplacementCosts,+

ProductionValues

Economic Welfare

value of the wefareeffects of income and

other factors(including

distribution,household work, loss

of natural capitaletc.)

MEW(Measure of Economic

Welfare)

ISEW(Index of SustainableEconomic Welfare)

3 +ConstructedPreferences

HumanWelfare

assessment ofthe degree towhich human

needs arefulfilled

HDI(Human

Development Index)

HNA(Human NeedsAssessment)

4 +ConsensusBuildingDialogue

A range of goals for national accounting and their corresponding frameworks,measures, and valuation methods

from: Costanza, R., S. Farber, B. Castaneda and M. Grasso. 2000. Green national accounting: goals and methods. Chapter in: Cleveland, C. J., D. I. Stern and R. Costanza (eds.) The nature of economics and the economics of nature. Edward Elgar Publishing, Cheltenham, England (in press)

From: Costanza, R., S. Farber, B. Castaneda and M. Grasso. 2001. Green national accounting: goals and methods. Pp. 262-282 in:Cleveland, C. J., D. I. Stern and R. Costanza (eds.) The economics of nature and the nature of economics. Edward Elgar Publishing,Cheltenham, England

Column A: Personal Consumption ExpendituresColumn B: Income DistributionColumn C: Personal Consumption Adjusted for Income InequalityColumn D: Value of Household LaborColumn E: Value of Volunteer WorkColumn F: Services of Household CapitalColumn G: Services Highways and StreetColumn H: Cost of CrimeColumn I: Cost of Family BreakdownColumn J: Loss of Leisure TimeColumn K: Cost of UnderemploymentColumn L: Cost of Consumer DurablesColumn M: Cost of CommutingColumn N: Cost of Household Pollution AbatementColumn O: Cost of Automobile AccidentsColumn P: Cost of Water PollutionColumn Q: Cost of Air PollutionColumn R: Cost of Noise PollutionColumn S: Loss of WetlandsColumn T: Loss of FarmlandColumn U: Depletion of Nonrenewable ResourcesColumn V: Long-Term Environmental DamageColumn W: Cost of Ozone DepletionColumn X: Loss of Forest CoverColumn Y: Net Capital InvestmentColumn Z: Net Foreign Lending and Borrowing

Genuine Progress Indicator (or ISEW) by Column

Additions

Subtractions

Built CapitalHuman CapitalSocial CapitalNatural Capital

US

40

90

140

1940 1960 1980 2000

UK

40

90

140

1940 1960 1980 2000

Germany

40

90

140

1940 1960 1980 2000

Austria

40

90

140

1940 1960 1980 2000

Netherlands

40

90

140

1940 1960 1980 2000

Sweden

40

90

140

1940 1960 1980 2000

Chile

40

90

140

190

240

1940 1960 1980 2000

Indices of ISEW(Index of SustainableEconomic Welfare)

and GDP(1970 = 100)

Gross Production vs. Genuine Progress for the US, 1950 to 2002 (source: Redefining Progress - http://www.rprogress.org)

TrumanEisenhower

Kennedy

Johnson

Reagan

G. H. W.Bush

NixonFord

Carter

ClintonG. W.Bush

The Commons“ refers to all the gifts we inherit or create together. Thisnotion of the commons designates a set of assets that havetwo characteristics:

they’re all gifts, andthey’re all shared.

A gift is something we receive, as opposed to something weearn.A shared gift is one we receive as members of a community,as opposed to individually.Examples of such gifts include air, water, ecosystems,languages, music, holidays, money, law, mathematics, parks,the Internet, and much more”.

Peter Barnes, Capitalism 3.0

Ecosystem Services: the benefitshumans derive from ecosystems

Sea-viewing Wide Field-of-View Sensor (SeaWiFS)data on marine and terrestrial plant productivity

Biosphere

Picture taken by an automatic camera located at an electrical generating facility on the Gulf Intracoastal Waterway(GIWW) where the Route I-510 bridge crosses the GIWW. This is close to where the Mississippi River GulfOutlet (MRGO) enters the GIWW. The shot clearly shows the storm surge, estimated to be 18-20 ft. in height..

1839187019932020

Past and Projected Wetland Loss in the Mississippi Delta (1839 to 2020)

NEW ORLEANS

Coastal Louisiana

History of coastal Louisiana wetland gain and loss over the last 6000 years, showing historicalnet rates of gain of approximately 3 km2/year over the period from 6000 years ago until about100 years ago, followed by a net loss of approximately 65 km2/yr since then.

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

-7000 -6000 -5000 -4000 -3000 -2000 -1000 0 1000

Years Before Present

Wetl

an

d A

rea (

sq

km

) 3 sq km/yr

Net wetland gain

65 sq km/yr

Net wetland loss

Global Storm Tracks 1980 - 2006

Figure 1. Typical hurricane swath showing GDP and wetland area used in theanalysis.

!

TDi = e" # gi

$1 # wi

$2 #GDPi

!

"TDi = e# $ gi

% 1 $ (wi &1)% 2 & wi

% 2( ) $GDPi

Predicted total damages from storm i

Avoided cost from a change of 1 ha of coastal wetlands for storm i

The value of coastal wetlands for hurricane protectionln (TDi /GDP i)= ! + "1 ln(gi) + " 2ln(wi) + ui (1)

Where:

TDi = total damages from storm i (in constant 2004 $US);

GDPi = Gross Domestic Product in the swath of storm i (in constant 2004 $US). The

swath was considered to be 100 km wide by 100 km inland.

gi = maximum wind speed of storm i (in m/sec)

wi = area of herbaceous wetlands in the storm swath (in ha).

ui = error

Figure 2. Observed vs. predicted relative damages (TD/GDP) for each of thehurricanes used in the analysis.

0.0001

0.0010

0.0100

0.1000

1.0000

0.0001 0.0010 0.0100 0.1000 1.0000 10.0000TD/GDP observed

TD

/GD

P p

red

icte

d

Opal 2005

Jeanne 2004 Andrew 1992

Fran 1996

Katrina 2005

Allen 1980

Hugo 1989

Isabel 2003

Elena 1985

Erin 1995

Bill 2003

Allison 1989

Charley 1998

Isidore2002

Dennis 1999

Alberto 1994

Bob 1991

Gloria 1985

Gaston 2004

Keith 1988

Jerry 1989

Irene 1999Danny 1997

Chantal 1989

Allison 2001

Floyd 1999

Bret 1999

Emilly 1993

Alicia 1983

Frances 2004

Lili 2002Bonnie 1998

Charley 2004

Ivan 2004

R2 = 0.60

Figure 3. Area of coastal wetlands (A) in the average hurricane swath vs. theestimated marginal value per ha (MVsw) and (B) in the entire state vs. the totalvalue (TVs) of coastal wetlands for storm protection.

$100

$1,000

$10,000

$100,000

$1,000,000

1,000 10,000 100,000 1,000,000

Area of coastal wetlands in average swath (ha)

An

nu

al exp

ecte

d m

arg

inal valu

e p

er a

verag

e s

wath

MV

sw

($/h

a/y

r)

North Carolina Texas

Florida

Louisiana

South Carolina

New York

Rhode Island

Delaware

ConnecticutAlabamaPennsylvania

New Hampshire

Massachusetts

Mississippi

Virginia

GeorgiaNew Jersey

Maryland

Maine

y = 0.0093xR2 = 0.5788

$10

$100

$1,000

$10,000

$100,000

1,000 10,000 100,000 1,000,000 10,000,000

Total Area of Coastal Wetlands (ha)

To

tal A

nn

ual V

alu

e o

f C

oasta

l W

etl

an

ds (

TV

s M

illio

n$

/yr)

Louisiana

Florida

Texaas

New York

Delaware

North Carolina

South Carolina

Rhode Island

Connecticut

Alabama

PennsylvaniaNew Hampshire

Massachusetts

Mississippi

Virginia

Georgia

New Jersey

Maryland

Maine

A B

•A loss of 1 ha of wetland in the model corresponded toan average $33,000 (median = $5,000) increase in stormdamage from specific storms.

•Taking into account the annual probability of hits byhurricanes of varying intensities, the annual value ofcoastal wetlands ranged from $250 to $51,000/ha/yr, witha mean of $8,240/ha/yr (median = $3,230/ha/yr)

• Coastal wetlands in the US were estimated to currentlyprovide $23.2 Billion/yr in storm protection services.

2nd most cited article inthe last 10 years in theEcology/Environmentarea according to theISI Web of Science.

NATURE |VOL 387 | 15 MAY 1997 253

article

The value of the world’s ecosystemservices and natural capitalRobert Costanza*†, Ralph d’Arge‡, Rudolf de Groot§, Stephen Farberk, Monica Grasso†, Bruce Hannon¶,Karin Limburg#I, Shahid Naeem**, Robert V. O’Neill††, Jose Paruelo‡‡, Robert G. Raskin§§, Paul Suttonkk& Marjan van den Belt¶¶* Center for Environmental and Estuarine Studies, Zoology Department, and † Insitute for Ecological Economics, University ofMaryland, Box 38, Solomons,Maryland 20688, USA‡ Economics Department (emeritus), University of Wyoming, Laramie, Wyoming 82070, USA§ Center for Environment and Climate Studies, Wageningen Agricultural University, PO Box 9101, 6700 HB Wageninengen,The NetherlandskGraduate School of Public and International Affairs, University of Pittsburgh, Pittsburgh, Pennsylvania 15260, USA¶ Geography Department and NCSA, University of Illinois, Urbana, Illinois 61801, USA# Institute of Ecosystem Studies, Millbrook, New York, USA** Department of Ecology, Evolution and Behavior, University of Minnesota, St Paul, Minnesota 55108, USA†† Environmental Sciences Division, Oak Ridge National Laboratory, Oak Ridge, Tennessee 37831, USA‡‡ Department of Ecology, Faculty of Agronomy, University of Buenos Aires, Av. San Martin 4453, 1417 Buenos Aires,Argentina§§ Jet Propulsion Laboratory, Pasadena, California 91109, USAkkNational Center for Geographic Information and Analysis, Department of Geography, University of California at SantaBarbara, Santa Barbara, California 93106,USA¶¶ Ecological Economics Research and Applications Inc., PO Box 1589, Solomons, Maryland 20688, USA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The services of ecological systems and the natural capital stocksthat produce them are critical to the functioning of theEarth’s life-support system. They contribute to human welfare, both directly and indirectly, and therefore representpart of the total economic value of the planet.We have estimated the current economic value of 17 ecosystem servicesfor 16 biomes, based on published studies and a few original calculations. For the entire biosphere, the value (most ofwhich is outside the market) is estimated to be in the range of US$16–54 trillion (1012) per year, with an average ofUS$33trillion per year. Because of the nature of the uncertainties, thismust be considered a minimum estimate. Globalgross national product total is around US$18 trillion per year.

Summary of global values of annual ecosystem services (From: Costanza et al. 1997)

Value

per ha

($/ha/yr)

577

252 4052

22832 19004 6075 1610

804

969 2007

302 232

14785 9990

19580 8498

92

Global

Flow Value

(e12 $/yr)

20.9

8.4 12.6

4.1 3.8 0.3 4.3

12.3

4.7 3.8 0.9 0.9 4.9 1.6 3.2 1.7

0.1

33.3

Biome

Marine

Open OceanCoastal

Estuaries Seagrass/Algae Beds Coral Reefs Shelf

Terrestrial

ForestTropical Temperate/Boreal

Grass/RangelandsWetlands

Tidal Marsh/Mangroves Swamps/Floodplains

Lakes/RiversDesertTundraIce/RockCroplandUrban

Total

Area

(e6 ha)

36,302

33,200 3,102

180 200 62

2,660

15,323

4,855 1,900 2,955 3,898

330 165 165 200

1,925 743

1,640 1,400

332

51,625

Problems with the Nature paper(as listed in the paper itself)1. Incomplete (not all biomes studied well - some not at all)2. Distortions in current prices are carried through the analysis3. Most estimates based on current willingness-to-pay or proxies4. Probably underestimates changes in supply and demand curves

as ecoservices become more limiting5. Assumes smooth responses (no thresholds or discontinuties)6. Assumes spatial homogeneity of services within biomes7. Partial equilibrium framework8. Not necessarily based on sustainable use levels9. Does not fully include “infrastructure” value of ecosystems10. Difficulties and imprecision of making inter-country

comparisons11. Discounting (for the few cases where we needed to convert from

stock to flow values)12. Static snapshot; no dynamic interactions

Solving any of these problems (except perhaps 6 whichcould go either way) will lead to larger values

http://www.nj.gov/dep/dsr/naturalcap/

Degradation of ecosystem servicesoften causes significant harm to

human well-being

– The total economic valueassociated with managingecosystems more sustainably isoften higher than the valueassociated with conversion

– Conversion may still occurbecause private economicbenefits are often greater forthe converted system

(From: Balmford, A., A. Bruner, P. Cooper, R. Costanza, S. Farber, R. E. Green, M.Jenkins, P. Jefferiss, V. Jessamy, J. Madden, K. Munro, N. Myers, S. Naeem, J. Paavola,M. Rayment, S. Rosendo, J. Roughgarden, K. Trumper, and R. K. Turner 2002.Economic reasons for conserving wild nature. Science 297: 950-953)

Costs of expanding andmaintaining the current global reservenetwork to one covering 15% of theterrestrial biosphere and 30% of themarine biosphere

Benefits (Net value* of ecosystemservices from the global reservenetwork)

*Net value is the difference between the value ofservices in a “wild” state and the value in themost likely human-dominated alternative

=

=

Economic Reasons for Conserving Wild Nature

$US 45 Billion/yr

$US 4,400-5,200 Billion/yr

Benefit/Cost Ratio = 100:1

From: R. Putnam, Bowling Alone: The Collapse and Revival of AmericanCommunity NewYork: Simon and Schuster, 2000).

Social Capital index by State

• Can be used as a Consensus Building Tool in an Open, Participatory Process

• Multi-scale in time and space

• Acknowledges Uncertainty and Limited Predictability

• Acknowledges Values of Stakeholders

• Multiple Modeling Approaches, Cross- Calibration, and Integration

• Evolutionary Approach Acknowledges History, Limited Optimization, and the Co-Evolution Human Culture and Biology and the Rest of Nature

Integrated Modelingof Humans Embeddedin Ecological Systems

Project GoalsOutcome 1. A suite of dynamic ecological economic

computer models specifically aimed at integratingour understanding of ecosystem functioning,ecosystem services, and human well-being across arange of spatial scales.

Outcome 2. Development and application of newvaluation techniques adapted to the public goodsnature of most ecosystem services and integratedwith the modeling work

Outcome 3. Web-based delivery of the integratedmodels & results to a broad range of potential users.

Ecosystem services: Dynamics, Modeling and Valuation to Facilitate Conservation

Project funded by the Gordon and Betty Moore Foundationhttp://www.uvm.edu/giee/?Page=events/ecosystemconference/index.html

Major Accomplishments:

•Global network of collaborators (> 100, 14 countries)•Collaborative development of models (MIMES)including biophysical dynamics and valuation•Initial results and ongoing applications at calibrationsites (Global, Vermont, Amazon, PNW, Mexico, Marine)•Web sites for collaboration, education, and model delivery•Publication of results in multiple venues•Commitments for applications to multiple sites aroundthe world

Collaborative Model Development

EcoServices classified according to spatial characteristics1. Global-Non Proximal (does not depend on proximity)

1&2. Climate RegulationCarbon sequestration (NEP)Carbon storage

17. Cultural/Existence value2. Local Proximal(depends on proximity)

3. Disturbance Regulation/ Storm protection9. Waste Treatment10. Pollination11. Biological Control12. Habitat/Refugia

3. Directional Flow-Related: flow from point of production to point of use4. Water regulation/flood protection5. Water supply6. Sediment regulation/Erosion control8. Nutrient regulation

4. In situ (point of use)7. Soil formation13. Food production/Non-timber forest products14. Raw materials

5. User movement related: flow of people to unique natural features15. Genetic resources16. Recreation potential17. Cultural/Aesthetic

LocationBiosphere

Earth Surfaces

NutrientCycling

Hydrosphere Lithosphere Atmosphere

Anthroposphere

Cultures

Biodiversity

EcosystemServices

Water by

Reservoir

Geological Carbon

Ores

Earth Energy

Gasses

ExchangesBetweenLocations

Social Capital

Human Capital

Economie

MIMESMulti-scale Integrated Models of Ecosystem Services

MIMES Multiscale Integrated Models of Ecosystem Services)

Location: from local to globalBiosphere

Anthroposphere

Hydrosphere

Atmosphere

EcosystemServices

Lithosphere

Earth Surfaces

Ability to select specific areas to model at variable spatial andtemporal resolution, in their global and regional context

A range ofcalibrationsites used byproject partnersto test modelapplicability andperformance.These include inthe first phase:Amazon, Pacificnorthwest,Winoskiwatershed,Vermont, andGlobal

Three complementary and synergistic ways to include humansin models and modeling:

1. As “stakeholders” and active participants in the model conceptualization,development, construction, testing, scenario development, and implementationprocesses.

2. As “players” of the models where the model is used as both a decision aidand as a research tool to better understand human behavior in complexvaluation and decision processes.

3. As “agents” programmed into the model based on better understanding oftheir goals and behavior gleaned through 1 and 2.

Land use

Soildrainage

type

Waterregulation

Land Use

Soil Drainage type

Water Regulation

Oceans

Ecosystems (% Area)

Croplands Wetlands

Urban

Forests

Tundra

1990 economic production in $ PPP by country

Agriculture

Households

Tourism

Transportation

Fisheries

Research

Ecosystem Services

Climate Regulation

Biological Regulation

Natural Hazard Mitigation

Cultural Heritage

Genetic Information

Inorganic Resources

Next Steps:1. Further development and testing of MIMES

2. Application to a large number of sites around theworld in support of conservation, PES systems,carbon trading, national accounting, etc. incollaboration with local partners (including those inthe Moore portfolio)

3. make MIMES the most widely used and trustedsystem for ecosystem service modeling andevaluation in the world

1

10

100

1000

10000

100000

-5 -4 -3 -2 -1 0 1 2 3 4 5 6 7

Temperature Anomaly (ºC) Human Population (billions) GWP index (1960=1) Fraction land (x10) Water Withdrawls (1000km3) CO2 (d260ppm/20) Methane (d400ppb/180) SE Asian

Monsoon (-d18O+5))

Ye

ars

be

fore

Pre

se

nt

(Lo

g s

ca

le)

5

50

500

5000

50000

Agriculture

Roman Empire

Biologially modern humans orgainzed in small hunter/ gather bands

Greece

Egypt

Start of Great Acceleration

WWII

WWI

Industrial Revolution

paleo-Indian migration to Americas

Maize bred first Sumerian cities

first Peruvian cities

Vikings visit NA

"Black death"Columbus

Collapse of Maya

Pilgrims land

HumanPopulation

(Billions)GWPIndex

(1960=1)TempAnomaly

(ºC)

2006

2001

1996

1956

1906

1506

1006

3006 BC

8006BC

48006BC

88006BC

AD

BC2006

LittleIce

Age

FractionForest (x10)

FractionCropland(x10)

WaterWith-drawals

Olmecs at peak

Writing

Hsia

ShangChouHan

Tang

Sung

Ming

Ch'ingTokugawaShogunate

AztecsIncas

Printing press

Domestication of Cereals, Sheep, and Goats

Potery

Iron Age starts

Paper

Windmills

Mechanical LoomAmerican Revolution

Internal Combustion Engine

ENIAC

Internet

AppleII

Google

TelevisionFraction 3 Largest Polities(x10)

CO2

Methane

SE AsianMonsoon

Collapse of Soviet Union

Methane

Kyoto Climate treaty entered into force

Collapse of Enron

Hurricane Katrina destroys New Orleans

35,000 die in European heat wave

1788-95 ENSO

Mt. Pinatubo eruption

Peak of British Empire

Peak of Mongol Empire

Peak of Islamic Caliphate

Peak of Roman Empire

Domestication of Dogs

Sedentism

migration of modern humans out of Africa

Integrated

History and future

Of

People on

EarthFrom: Costanza, R. L. Graumlich, W.Steffen, C. Crumley, J. Dearing, K.Hibbard, R. Leemans, C. Redman, andD. Schimel. 2007. Sustainability orCollapse: What Can We Learn fromIntegrating the History of Humans andthe Rest of Nature? Ambio 36:522-527

Lisbon Principles of Sustainable Governance:

1. Responsibility 2. Scale-Matching 3. Precaution4. Adaptive Management 5. Full Cost Allocation 6. Participation

From: Costanza, R. F. Andrade, P. Antunes, M. van den Belt, D. Boersma, D. F. Boesch, F. Catarino, S. Hanna,K. Limburg, B. Low, M. Molitor, G. Pereira, S. Rayner, R. Santos, J. Wilson, M. Young. 1998. Principles forsustainable governance of the oceans. Science 281:198-199.

Adaptive Institutions Consistent with the Vision

Making the market tell the truthIn general, privatization is NOT the answer, because most ecosystemservices are public goods. But we do need to adjust marketincentives to send the right signals to the market. These methodsinclude:

•Full cost accounting (i.e. www.trucost.org, www.earthinc.org•Ecological tax reform (tax bads not goods, remove perversesubsidies)•Ecosystem service payments (a la Costa Rica)•Impact fees for development tied to real impacts•Environmental Assurance bonds to incorporate uncertainty aboutimpacts (i.e. the Precautionary Polluter Pays Principle - 4P)•Expand the “Commons Sector”

See:Bernow, S., R. Costanza, H. Daly, et. Al.. 1998. Ecological tax reform. BioScience 48:193-196.

Costanza, R. and L. Cornwell. 1992. The 4P approach to dealing with scientific uncertainty. Environment34:12-20,42.

THE NEWCOMMONSSECTORGlobal• Earth Atmospheric Trust

National• American Permanent Fund• Children’s start-up trust• Universal health insurance• Copyright royalty fund• Spectrum trust• Commons tax credit…

Regional• Regional watershed trusts• Regional airshed trusts• Mississippi basin trust• Buffalo commons• Vermont Common Asset Trust… Local• Land trusts• Municipal wi-fi• Community gardens• Farmers’ markets• Public spaces• Car-free zones• Time banks…

www.earthinc.org

Source: Stern review on the economics of climate change, 2006

Creating An Earth Atmospheric Trust:A system to stop global warming and reduce povertyPeter Barnes, Robert Costanza, Paul Hawken, David Orr, Elinor Ostrom,Alvaro Umaña, and Oran Young. Science (Feb 8, 2008, in press)

1) Set up a global cap and trade system for greenhouse gas emissions – all greenhouse gasemissions from all sources.2) Auction off all emission permits – and allow trading of permits3) Gradually reduce the cap to follow the 450 ppm target (or better). The price of permitswill go up and total revenues will increase as the cap is reduced.4) Deposit the revenues into a trust fund, managed by trustees appointed with long terms and amandate to protect the asset (the climate and atmosphere)5) Return a fraction of the revenues to everyone on earth on a per capita basis. Thisamount will be insignificant to the rich, and much smaller than their per capita contribution to the fund, butwill be enough to lift all the world’s poor out of poverty.6) Use the remainder of the revenues to enhance and restore the asset. They could beused to fund renewable energy projects, research and development on renewable energy, payments forecosystem services such as carbon sequestration, etc.

Special features and cautions1) Do not allow revenues to go into the general fund of any government2) Appoint trustees based on their qualifications and understanding of the purposes and details of the trust, nottheir political affiliations3) Make all operations and transactions of the trust transparent by posting them open access on the internet4) Make trustees accountable for their actions and decisions and subject to removal if they are not managingthe trust for the benefit of the beneficiaries (all current and future people)

Thank YouPapers mentioned in this talk available at:

www.uvm.edu/giee/publicationsSign on to the Earth Atmospheric Trust at:

www.earthinc.org